Cogeco maintains it will launch Canadian wireless service in coming months

Cogeco Communications Inc. is maintaining its expectation that it will launch wireless service in Canada in due time. CEO Frédéric Perron told analysts during a conference call about the company’s first quarter financial results Tuesday, Jan. 14, that Canadian wireless plans are “well on track to go to market over the coming quarters.” He did not specify when exactly that might be. Perron’s statement echoed what he told analysts during a fourth-quarter conference call in November, when he said “it is safe to say that the timeline will be measured in quarters, not years.” Cogeco has said it plans to offer wireless services to more than 4.2 million people living within its cable footprint in Ontario and Quebec. Last August, the company announced it had entered into an agreement with Bragg Communications Inc.’s Eastlink and an unnamed national telecom firm to roll out as an MVNO. READ MORE: - Cogeco continues push towards wireless service in Canada with two network access deals - Cogeco planning to launch wireless service in Canada soon, Perron states - Cogeco promotes reorganization at BMO conference - New president of Cogeco Media division picked up from Radio-Canada Parent company Cogeco Inc. – which owns both the business’ telecommunications and media arms – reported on Monday a slight drop in revenue of 1.4 per cent in the first quarter of 2025 compared to the same period last year, down to $764.96 million from $776.17 million. Its profits for the most recent quarter ended Nov. 30, 2024, were $108.39 million, up by 9.8 per cent from $98.72 in Q1 2024. Cogeco Communications saw similar shifts this quarter. That telecommunications arm of the business saw revenues dip down to $738.69 million or 1.2 per cent from $747.68 million the year prior. Profits climbed by 11.9 per cent to $107.16 million from $95.75 million the year before. Canadian telecom revenue was flat for the quarter, hitting $377.26 million – a slight rise of 0.2 per cent from $376.44 million in the same period last year. Overall subscribers to the company’s Canadian services declined by 1,327 by the end of the quarter. While Cogeco saw an increase in internet subscribers, video and wireline phone services continue to fall. Net internet subscribers in Canada grew by 10,691 – due to additions under the Cogeco and Oxio brands, plus new subscribers added following fibre-to-the-home network expansions – bringing the company’s total Canadian internet subscribers to 903,390 by the end of the quarter. Almost 8,000 Canadian video subscribers were lost in Q1, bringing the total to 596,841, while wireline phone service subscribers fell by just over 4,000, with the total now at 368,405. The company credited the drop in wireline subscribers to higher mobile phone substitution, a trend seen throughout the industry. American telecommunications revenue was $361.42 million (US$262.7 million), down 2.6 per cent from $371.24 million (US$271.9 million). Subscribership was down across the board in the U.S. Internet subscribers dipped by net 5,726 to 637,873. Video subscribers were down by 8,527 to 252,784, while wireline subscribers dropped by 3,252 to 121,833. Despite the drops, Canaccord Genuity analyst Aravinda Galappatthige observed in a note following the results that the decreases were less than the previous year and “better than our expectations.” Perron said during the conference call Cogeco is “cautiously optimistic about the potential for continued steady improvement in our U.S. customer metrics over the coming quarters.” The company says it has launched a three-year “transformation program” to combine parts of its Canadian and U.S. telecommunications businesses in the interest of efficiency and “streamlined cost structure.” Cogeco Communications’ adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $365.21 million, up 1.7 per cent from $358.96 million from Q1 2024. Net capital expenditures were up 2.9 per cent, to $150.64 million from $146.42 million. Free cash flow jumped by 8 per cent, rising from $137.84 million in Q1 2024 to $148.85 million in this most recent period. Net debt was just over $4.9 billion for the quarter, up from approximately $4.8 billion in the year prior. hdaley@thewirereport.ca

Cogeco maintains it will launch Canadian wireless service in coming months

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By Hannah Daley
| January 14, 2025

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