By Ahmad Hathout
MONTREAL — Quebecor CEO Pierre Karl Peladeau declared Thursday that the Canadian market is in a “different world” following the company’s acquisition of Freedom, as it saw good reception to its new wireless offers that are expected to heat up the promotional period later this year.
“The market suddenly became more competitive in Ontario,” Peladeau said during a second-quarter earnings conference call with analysts Thursday. “We should not be surprised.”
“We can’t completely anticipate what will take place in the future, but this is certainly where we are today — a different world, a different landscape,” he said, adding “there are other things to come.”
Over the past couple of months, Quebecor’s Freedom has frozen its rate plans, added more data to existing plans, launched a Canada and U.S. plan with 40 GB of data for $50 and a 5G plan with 50 GB that includes U.S., Canada and Mexico for $65.
“We are seeing very favourable market reaction on this, so that’s something we felt was a plus for us and it’s working out well,” said Quebecor chief financial officer Hugues Simard. “Certainly in-line with our expectations there.
“This is the season; it was a timely introduction for us and the interest is quite significant, so I have to say that that’s performing very well and at the right price, making sure that this is something they didn’t have before and certainly enhances the brand value for us, and I think it’s working out quite nicely.”
The addition of Freedom meant much higher additions to its mobile wireless business. The company reported 3.6 million mobile phone lines to end the second quarter, up from 1.66 million in the same quarter last year. Mobile wireless revenues were, consequently, up to $401 million compared to $191 million in the same period last year.
Monthly mobile average revenue per user was down to $37.77 compared to $38.94 last year.
Peladeau added that, “we are and I am very satisfied with what we’ve been able to achieve in a short period of time,” alluding to the closing of its acquisition of Freedom in early April.
Bell’s Virgin Plus flanker brand followed the Freedom announcement with a nationwide 5G data plan with 30 GB of data starting at $55 on a two-year term.
Earlier this year, Rogers halved the price of a gigabyte of data by doubling the amount from 25 to 50 GB on its $85 5G plan. It also said those bundling with Rogers wireline services can also now get the company’s starter 5G plan for 35 per cent cheaper than its previous 5G entry plan.
Bell CEO Mirko Bibic had said earlier this year that these price changes by its competitors are what customers already see in the competitive back-to-school and holiday seasons, where he said the bulk of service purchases are made.
Peladeau said Thursday that this is the “beginning” of a more competitive environment.
Last month, the CRTC selected Quebecor’s price offer to roam on Rogers’s network, which is required for it to build out its mobile virtual network operator business. Rogers said it has been contemplating appealing that decision.
Peladeau credited the speed at which the new CRTC, under head Vicky Eatrides, is moving to make these decisions, while also taking a shot at the previous administration for allegedly moving too slow.
Peladeau, however, said it hasn’t made much progress with the other two national carriers Bell and Telus on a roaming agreement. Quebecor is currently in final offer arbitration with Bell and it’s unclear whether the company will file for such assistance with the regulator if it can’t hammer out a deal with the Vancouver-based company.
The CRTC marked Monday as an “important milestone” to increase cellphone services competition in Canada. Three months earlier, it had set August 7 as an expected date for regional and national carriers to hammer out a deal on MVNO access, but that was not actually a hard deadline.
“The CRTC is pleased that companies have reached agreements and expects more will be completed in the near future,” the regulator said in a news release Monday. “Companies can continue to negotiate agreements or ask the CRTC to set access rates through a process known as final offer arbitration.”
Peladeau also reiterated Thursday the need for the company to have access to the incumbents’ last mile fibre facilities in order for it to be a true fourth player in the national market.
Having that access and therefore faster internet speeds, the company said, would grant it the ability to compete more effectively on bundling services, to which executives at the incumbents said was a focal point in a post Rogers-Shaw merger market.
Quebecor reported higher revenues of nearly $1.4 billion for the period ending June 30 compared to the same period last year, which saw revenues of $1.1 billion. Net income was also up to $171 million compared to $156 million last year.
Internet revenues were also up to $322 million compared to $305 million last year. Television service revenues were also up to $203 million compared to $200 million over the same period.
Total internet subscribers say higher at 1.7 million, compared to the 1.62 million from last year, television subscribers were lower at 1.37 million compared to 1.39 million last year, and landlines were down to 712,100 compared to 785,700.
The company suffered losses on the media advertising side, seeing a dip to $84 million from $89 million last year, while over the same period, subscription revenues were down to $46.6 million from $49 million.
Photo of Quebecor CEO Pierre Karl Peladeau.
