Quebecor’s Freedom deal doesn’t change MVNO plans; CRTC framework is ‘first step’: Cogeco CEO

Cogeco Inc. president and CEO Philippe Jetté said that he would not speculate on his company’s next moves when asked by analysts if Quebecor Inc. would be a more willing partner to negotiate an MVNO deal with over legacy incumbent operators. “Let's first focus on the first necessary, first step, for us which is the CRTC to release the right framework for competition in Canada,” he said in a Thursday morning quarterly earnings call, referring to the awaited terms and conditions for the MVNO service and the negotiation of rates. “So until we've reached that milestone, I don't really want to speculate on what other things could happen.” Jetté said that Quebecor’s deal to purchase Shaw Communication Inc.’s wireless brand Freedom Mobile for $2.85 billion “is good for them” and competition in Canada “snd we'll see where that goes in the future.” “But for us… we are focused on our operating territories. So if and when you see activities for us, they will be in our operating territories,” he said. Jetté gave a similar response when asked if the company would participate in next year’s 3,800 MHz auction in a similar fashion as it did during the 3,500 MHz auction. Last year the company acquired 38 spectrum licences, for a total purchase price of $295 million. “Auctions don't come very often. But the first trigger for us is, as I said earlier, is the CRTC terms and conditions that we are going to learn about very soon. So that's the thing to watch for… I'm convinced that if we have good terms and conditions, not only Cogeco, but also other regional players will be able to emerge.” Net profits for Cogeco Inc. (the parent company which includes Cogeco media) increased by 3.3 per cent for a total of $108.5 million and its revenues increased by 16.3 per cent for a total of $754.8 million, for the three months that ended on May 31, 2022. Cogeco Communications Inc. (consisting of its Canadian and American broadband operations), saw revenues of $728.1 million and profits at $105.4 million, accounting for a 16.6 per cent, and 2.5 per cent, increase respectively. Its Canadian broadband services reached $362.1 million in revenues, a 2.5 per cent increase compared to this time last year. Growth was attributed to “last year's retroactive adjustment of $4.6 million recognized as a reduction of revenue during the third quarter of fiscal 2021 following the CRTC's decision on aggregated wholesale internet rates, within the Canadian broadband services segment,” according to Cogeco’s financial report. Its American broadband services saw a 30 per cent increase in revenue racking in $366 million. The high growth is due to the company’s Ohio broadband systems acquisition completed in Sept. 2021 and “organic revenue growth driven by the cumulative effect of high-speed internet service additions over the past year,” according to the report. The Canadian segment saw a decline of 9,148 customers, almost 2,000 more than it lost during last year’s third quarter, for a total of 1.98 million customers. Telephony saw a loss of 4,443 customers, comparable to last year’s third quarter losses, totalling 398,256. Internet service customers rose by 1,652 for a total of 922,695. During this time last year the company added more than 4,500 new customers in the internet division. The pandemic, which saw a lot of new customers interested in high-speed options, accounted for the larger jump in consumers seen last year. Cogeco’s Canadian video service customers total 661,272. The video segment saw a loss of 6,357 customers in this quarter, compared to a loss of 7,030 customers in 2021. “The net losses for both periods of fiscal 2022 were mainly due to the continuous change in the video consumption environment, with an increasing proportion of customers only subscribing to internet services, and highly competitive offers in the industry,” the report states. Cogeco’s American operations saw a total of 1.2 million customers. It lost 12,889 customers this past quarter, compared to the 1,302 it added during the same period last year. Its internet, telephone and video segments all saw declines. In the third quarter of 2021, the company's internet division gained more than 6,000 customers only to lose 1,689 this year, for a total of 717,919. “The net losses for the third quarter of fiscal 2022 were mainly due to: limited customer movements in the industry, following a more active period during the acute phase of the pandemic; higher levels of disconnections, especially for entry-level internet services, due to some customers no longer working from home or attending school remotely and the high inflation environment; and increased competition in certain portions of the footprint; partly offset by growth in the commercial sector,” the report reads. Its video and telephony services have 332,312 and 164,730 customers respectively. Video lost 6,709 customers this quarter (compared to a loss of 4,349 this period last year) and telephony lost 4,491 customers (compared to a 1,196 customer decline in 2021). – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Quebecor’s Freedom deal doesn’t change MVNO plans; CRTC framework is ‘first step’: Cogeco CEO

News | July 14, 2022

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Quebecor’s Freedom deal doesn’t change MVNO plans; CRTC framework is ‘first step’: Cogeco CEO

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