Eyes on Quebecor following 3500 MHz auction

As the dust settles on the results of the 3,500 MHz auction announced Thursday, much of the initial interest amongst analysts and industry watchers has centered not on the $7.31 billion spent by the so-called big three incumbents -- BCE Inc., Rogers Communications Inc, and Telus Corp. -- but rather on the roughly $830 million spent by Quebecor Inc. and on its purchases outside its home province of Quebec. Quebecor CEO Pierre Karl Péladeau has not been shy about stating his desire to purchase Shaw Communications Inc.'s Freedom Mobile assets should the Competition Bureau make them available as part of a potential approval of the company’s acquisition deal with Rogers. During a Friday morning call with analysts, Péladeau put it in plain terms. "The outcome of this auction is for us the first essential step towards the expansion of our telecom services outside our own home base of Quebec, into key markets of Ontario and western Canada," he said on the call, stressing that the nearly billion dollars the company spent is not about sitting on assets for speculation reasons. Several questions arise about just exactly what that roll out will look like. If Quebecor doesn't or can't pick up Shaw's wireless assets, can it make a viable national brand exclusively through the CRTC's new mobile virtual network operator (MVNO) framework? If Shaw's assets do become available, can Quebecor be a viable national brand with a purely wireless offering, without bundling it with wireline products as Shaw often did? Or can Quebecor bundle former Shaw wireless assets with third-party internet access wholesale wireline agreements? The first step, Péladeau said, is to negotiate the right type of network assets with the big three companies as an MVNO following the CRTC's decision to restrict mandated wireless network access to regional players with spectrum assets. On the call, Péladeau was confident this option could work on its own. "If, for whatever reason, was not possible, we will have the alternative to be an MVNO operator, with the experience we built in the past," he said. Péladeau added that the advent of open radio access network (RAN) technology would make it easier to deal with multiple providers in terms of network access. "We should highlight the fact that what is coming in is carrying more opportunity, and is more favourable than what we have been experiencing before in terms of capital intensity," he said. On the question of bundling wireline with wireless outside of Quebec, the Quebecor CEO hedged, saying that the prevalence of bundled service in the west "doesn't mean there is no room for a single product play," while also saying that bundling wireless services with third party internet access (TPIA) wireline internet was also "a possibility." Will Quebecor take its new -- and successful -- Fizz flanker brand national, or go with its more established Videotron brand? Péladeau wouldn't say. "This is something we will make public in due time," he said. Canaccord Genuity analyst Aravinda Galappatthige wrote in a Friday morning note that he believes Quebecor's spectrum spend "secures its lead position to acquire Shaw wireless if/when it's spun out of the proposed Rogers-Shaw, likely as a regulatory remedy." — Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Hannah Daley at hdaley@thewirereport.ca

Eyes on Quebecor following 3500 MHz auction

News | July 30, 2021

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Eyes on Quebecor following 3500 MHz auction

News | July 30, 2021

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