Quebecor’s acquisition of VMedia exciting for competition says co-founder, CNOC

VMedia Inc. can expand its national footprint with resources from Quebecor Inc., as part of the Quebec-based company's national expansion, according to VMedia co-founder George Burger. Last week the commission posted its approval –as well as the original April, 2022 application – for Quebecor to acquire all of the shares of VMedia. As sole shareholder of VMedia, Quebecor essentially controls the company and all of its licences, but Burger said the company would continue to remain an independent entity. The cost of the acquisition was not publicly disclosed. VMedia deploys its services in all Canadian provinces and territories. Subscribers to its cable television are mainly concentrated in the metropolitan areas of Toronto and Montreal. It has approximately 8,000 total subscribers to its cable services. “The transaction is completely complementary to the assets already held by Quebecor Media and will strengthen innovation and competition in the field of cable television in Canada, which perfectly meets the objectives set out in the Broadcasting Act,” Quebecor wrote in its application, dated April 25th. Burger called the acquisition "a major moment for Quebecor" as it pursues expansion out West beginning with its provisional purchase of Shaw Communication Inc.’s Freedom Mobile. Geoff White, executive director of the Competitive Network Operators of Canada (of which VMedia is a member) said it is not surprising that the smaller competitors are getting bought out because of the CRTC’s reversion back to higher wholesale rates, but added that Quebecor’s recent moves are "exciting" for CNOC’s competitive positioning. “VMedia has been an important champion of competition in the home internet and TV market, and so too has Quebecor, especially when you think about what Videotron has been trying to do to compete against the large incumbents inside Quebec, and in the rest of Canada with its pursuit of Freedom Mobile. So we believe there is an exciting possibility here, to enhance our competitive position going forward,” White said in an interview with The Wire Report. Burger said there are no plans to rationalize, downsize or “to do anything except work harder to build a company.” “It allows us to more effectively market to Canadians who are looking for affordable alternatives to what the large companies are charging. So that will continue to be our mission,” he said. Burger said limited resources kept the company focused on its operations in the Toronto and Ottawa areas, but now it can continue to build on its national footprint in provinces like Manitoba, which “are desperate for competitive services.” VMedia also told the CRTC, in the application, that it has been restrained in its ability to provide “the benefits we offer as widely as possible, and to expand our research and development activities to enable us to maximize our resources for innovation in television distribution, due to inadequate capitalization, which has been a result of the continuing disruption of the broadcasting industry in Canada.” “The resources that brings really allows us to do what VMedia has been trying to do, which is to innovate, provide better services and provide affordable services,” Burger said in an interview with The Wire Report. Quebecor argued to the commission that the transaction would not harm competition because Videotron accounts for 48 per cent of the broadcast distribution undertaking market shares in Quebec. Therefore, the company argued, adding VMedia’s less than one per cent market share would “in no way change the already existing highly competitive landscape.” Quebecor said the transaction would result in significant gains for the Canadian broadcasting system because it has no cable presence outside of its home province. “In fact, by operating henceforth under the wing of Quebecor Media, would benefit from the necessary capital and the expertise and know-how accumulated over the years, thus allowing it to continue its expansion throughout the country in order to become an alternative additional competitive advantage better known to consumers,” it argued. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Quebecor’s acquisition of VMedia exciting for competition says co-founder, CNOC

News | July 28, 2022

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Quebecor’s acquisition of VMedia exciting for competition says co-founder, CNOC

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