Cogeco CEO open to eventual expansion of business, heralds AI use

Cogeco Communications Inc. may be a smaller player in the Canadian telecommunications sphere but it has plans to continue growing and resist takeover offers, the company’s CEO says. Frédéric Perron spoke with The Wire Report in an interview that covered a wide range of topics. Right now, the transnational carrier is slowly rolling out new services. “We just launched wireless services in the United States. We used to just be a wireline business, so we launched wireless service in the United States,” he stated. “We’re about to launch it in Canada as well. We also have a second brand, a full digital brand, which we call Oxio which is doing very, very well." Oxio was purchased in 2023; last year Cogeco snapped up the Niagara Regional Broadband Network. Perron sees more acquisitions in the distant future, especially south of the border. “In a few years, when things settle down, we always have the option of resuming growth through acquisitions in the United States,” he notes. “As you’ve probably seen, over recent years we were growing in the United States through acquisitions. We put that on pause a couple of years ago. But in the future it’s another option we have, a few years down the road.” The CEO is less certain about activities in Cogeco’s home country. “The market is much more consolidated already in Canada,” he remarks. “The reason we were able to grow in the States is the market is much more fragmented and there’s a long tale of mid-size and smaller players that we can often look at that sometimes fly under the radar of the larger companies. But, again, making acquisitions in either country is not in the plans right now for the next two or three years.” Several years ago, Rogers Communications Inc. bought a stake in Cogeco with an eye to taking the company over. That move was rebuffed by Cogeco’s board of directors and Rogers sold its shares in order to pay down debt on the purchase of Shaw Communications. Perron was not part of the executive team that turned down the Rogers offer, but he supports it. “It comes down to our board of directors and our majority shareholder, Louis Audet,” he states. “I think the board and the majority shareholder was very clear when we got a hostile bid.” The company has thrived for 65 years, Perron notes. One of the challenges it faces, like other telecoms, is pricing. “You often see cycles like this, where customers say ‘hey, we want lower prices, we want better deals,’ and the industry adjusts,” he says. “Eventually, prices settle to a new level that customers are comfortable with. And we're going through one of those cycles right now.” Before joining Cogeco in 2020, Perron worked for various telecoms in Europe. His senior vice president of growth strategies, Nancy Audette, who is working on the Canadian wireless rollout plan, executed similar programs in three other countries. The CEO thinks the international experience is helpful for the mid-sized, Quebec-based firm. “Here they call it the Big Three in telecom. I worked in markets where it was the Big Five at the time. So very, very tough environments,” he asserts. “I’ve also worked in countries where the average revenue per customer per month is eight dollars. I’m not saying Canada is going there, by the way. But it really forces you to sharpen your day-to-day streetfighting abilities.” Cogeco does not disclose its average revenue per user (ARPU) figures in its financial statements. One of the tools Cogeco is using to hone its skills is artificial intelligence. It makes operations more efficient, Perron believes. Already the company is using an AI chatbot to answer questions from customers and to analyze network performance. “How do we become, with our infrastructure, an enabler of the AI economy?,” he asks. “How do we build networks that are better and more fit for AI providers? But that’s early days in terms of discussions. I’m not going to go too far down that road. But that’s something that’s worth exploring over time.” One looming threat that does not worry Perron is the potential imposition of tariffs by U.S. President Donald Trump's administration. Cogeco is not really an exporter, so it is not impacted, he states. It buys its equipment locally or from other parts of the world, he adds. Perron believes he was being groomed for the top job for a while. Before taking over the entire firm, he ran Canadian operations, all the while being coached on the duties of the senior suite. He finds he now spends half his time on external matters rather than internal concerns. This requires him to hold meetings with investors, regulators, and politicians. He welcomes the challenge. “I’m somebody who loves to learn, who loves diversity, who loves challenges, loves to be intellectually stimulated, and this job gives me so much variety on that front.” he says. For the complete 2024 fiscal year, Cogeco’s revenues were $3.07 billion, a slight drop from the $3.08 billion of the previous year. That was a decline of 0.2 per cent. Profit was $349 million, a 0.2 per cent decrease from fiscal 2023’s $350 million. Perron feels fortunate to be running the show at this time. “As a mid-size player, we have so much room to grow still,” he remarks. ppark@thewirereport.ca

Cogeco CEO open to eventual expansion of business, heralds AI use

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By Paul Park
| March 6, 2025

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