Quebecor roaming plan could point to national ambition: analyst

Quebecor Inc.’s Tuesday announcement of nationwide roaming at no charge for its Videotron wireless customers could allow the company to test the waters for a national mobile service, according to SeaBoard Group analyst Iain Grant. Grant said in a Tuesday phone interview that the company’s announcement that customers of its all-inclusive Canada plans would have coast-to-coast roaming privileges at no extra cost, starting May 13, could be an indicator of the company’s wider ambitions. Still, he said there are significant hurdles if Videotron wants to be a fourth national player. “It certainly would allow them to put their toe in the water for national service,” he said. “But the investment for national service is much greater than that of just the frequency, and greater than that of just the towers. You have to put up entire marketing engines.” Grant said that Videotron’s appeal as a wireless carrier in Quebec is tied to its offering as part of Quebecor’s bundles with Internet access, home-phone and TV service, and that the company would most likely need a partner to expand beyond its home province. The new roaming plan suggests a potential deal between Quebecor and Wind Mobile may be “getting closer, rather than further away,” Grant said. “Wind and Videotron make potentially great bedfellows,” he said. “They don't overlap in competitive intensity. Wind already has a marketing network in various parts of Western Canada, which Videotron has not. But the network that Wind has is very limited, so the ability of Videotron customers to roam across the country is an important ingredient.” Roaming agreements Quebecor has in place with other carriers could be temporary, Grant said, as the CRTC is still working on a final decision in its review of wholesale wireless services, which could end up instituting new price caps for wholesale domestic roaming. Grant added that the roaming agreement means Quebecor has less of a need for the spectrum on offer in the 2500 MHz auction, which began Tuesday. “You already have spectrum in 700 if you're Quebecor, nationwide,” he said, referring to the spectrum the company bought in Ontario, Alberta, and British Columbia in the 2014 auction. “You probably don't need to backfill it with a lot more 2500,” Grant said. In a Tuesday briefing note, Canaccord Genuity analyst Dvai Ghose said Videotron has a “limited appetite” for national wireless expansion and might not buy any 2500 MHz spectrum outside of Quebec and eastern Ontario. Representatives for Quebecor did not immediately respond to requests for comment on Tuesday. Desjardins Securities analyst Maher Yaghi said in a phone interview Tuesday that Quebecor’s roaming announcement has no connection to wider objectives to becoming a fourth national competitor. "This is just to make their product have the same features as the other companies selling plans in Quebec,” he said. “They were not terribly affected by roaming outside of Quebec because a lot of their customers stay in Quebec and do business in Quebec. This is just to make the product more comparable.” Yaghi said that if Quebecor launches a national network, the announcement will be “much more precise” in laying out the company’s plans. In June 2014, Industry Canada introduced caps on the prices companies could charge for domestic roaming and ended exclusivity agreements. Yaghi said the delay between the institution of the caps and Quebecor's announcement was probably related to the finer details of any deals it made with other carriers. "You have to make commercial agreements," he said. "Even though the government sets the policies, you still need to go back and forth and make sure the deal you're signing is what you need to get.” — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Quebecor roaming plan could point to national ambition: analyst

Broadcast | April 14, 2015

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Quebecor roaming plan could point to national ambition: analyst

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