Selling spectrum outside Quebec ‘only option’: Quebecor

Quebecor Inc.'s chief financial officer told an investors conference Thursday that selling the spectrum it holds outside Quebec is the only thing the company can do with it. During the Scotiabank Telecom & Cable Conference in Toronto, Jean-François Pruneau was asked about what appeared to be a change in Quebecor's plans for spectrum in provinces outside of Quebec. There had been speculation Quebecor would take its Videotron mobile service — currently only in Quebec and parts of eastern Ontario — to other parts of the country, though Pruneau himself poured cold water on this idea during another investors conference held in September. "It's not a change of strategy or objective, but the phrasing is different," Pruneau said Thursday. "The one thing that we've always been clear , I believe, is that building out a new network from the ground up is out of question." He added: "Then, what are the options? Well, the options are pretty simple. Well, in fact, there's only one option. ... We're gonna sell. That's the only option." Pruneau said if Wind Mobile is the buyer, Quebecor could conceivable take cash, or shares or securities. If shares or securities are paid, that could form the basis of a partnership with Wind, he said. If an incumbent such as BCE Inc., Telus Corp. or Rogers Communication Inc. is the spectrum buyer, cash would be more likely, he added. Given the previous Conservative government's goal of promoting four carriers in every market — a plan the new Liberal government has not signalled it is changing — Pruneau said selling spectrum to an incumbent likely would be a "long-term process." Pruneau added that there are "creative ways to make something happen," citing the case in June when the government approved Rogers' purchase of Mobilicity and spectrum from Shaw Communications Inc., as it offloaded other spectrum to Wind. Manitoba Telecom Services Inc. and Saskatchewan Telecommunications Holding Corp. later bought the Manitoba and Saskatchewan portions of that spectrum, respectively, from Wind. Quebecor bought spectrum licences for British Columbia, Alberta and southern Ontario in the 700 MHz auction in February 2014, taking advantage of rules imposed by Industry Canada that limited the amount of spectrum that could be purchased by incumbents Bell, Rogers and Telus. In that auction, Quebecor spent $233.3 million on seven spectrum licences covering about 28 million people. Rogers spent $3.29 billion for 22 licences covering 33.4 million people, Telus spent $1.14 billion on 30 licences covering 33.5 million people and Bell spent $565.7 million on 31 licences covering 33.5 million people. In September, Pruneau said Quebecor has spent about $300 million on spectrum outside of Quebec, "and it's definitely worth more than that" now, noting the rapid growth in demand for wireless data. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

Selling spectrum outside Quebec ‘only option’: Quebecor

News | November 12, 2015

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