By Ahmad Hathout
Quebecor executives said Thursday the company is preparing to be “more commercially aggressive” in western Canada.
“Lots of opportunity out west. Our market shares are lower. We are actively working on improving the network. We were facing performance and quality issues in some areas; we’re actively working on that,” Chief Financial Officer Hugues Simard said on the company’s second-quarter earnings conference call.
“We also have a plan to be more commercially aggressive out west because it is an area where there’s no reason for us where we can’t be as successful in the west as we were in Ontario and in Quebec before that, and this is, I mean for us, it’s a huge runaway ahead of us.”
Quebecor CEO Pierre Karl Peladeau added that there is “significant” room for growth in British Columbia and Alberta. And part of that growth is in increasing the brand’s presence, he said.
Earlier this summer, Quebecor subsidiary Freedom Mobile marked the opening of the Freedom Mobile Arch, a new outdoor venue for music and cultural events in Vancouver’s Hastings Park at the Pacific National Exhibition. And last year, Freedom Mobile was named the new sponsor of the Calgary Stampede’s Grandstand Show.
“This cool brand called freedom … fits very well in this landscape and we will continue to be [in] position in terms of marketing our brand and advertising them with the proper offers in those specific areas,” Peladeau said.
Last quarter, Quebecor executives said the company was considering adopting satellite-to-mobile technology to get coverage in dead zones. While executives did not provide an update on that, Peladeau said it is also considering adopting fixed wireless.
“We look forward … to have our fixed wireless capacity. We’re moving forward, certainly slowly but surely,” Peladeau said. “Fixed wireless is certainly a consideration that we’ll keep live in our mind and consider it as an opportunity also in the future.”
For the three months that ended June 30, Quebecor reported revenues of $1.44 billion, up 4.3 per cent from last year. Net income was also up to $275 million from $216 million over that same period.
Telecommunications revenue was up to $1.23 billion from $1.19 billion.
The company’s Videotron subsidiary added 53,200 new mobile phone subscribers in the quarter, down from the 70,400 it added last year for a total base of roughly 4.48 million.
Importantly, its average revenue per user (ARPU), historically and significantly lower than its national peers, was up to $35.62 in the quarter, 86 cents higher than the ARPU last year. ARPU last quarter dipped to $35.19 from fourth quarter’s $35.23.
The increase was due “mainly to lower promotional discounts and customer migration to more expensive plans, partially offset by the dilutive effect of Freedom’s and Fizz’s prepaid services,” the company’s report said.
The first quarter, executives across the major telecoms would agree, was a bit of an anomaly, with aggressive pricing practices that reverberated in the ARPU figures across the industry.
“Some competitors still resort to hefty discounting and select channels,” said Peladeau, never shying away from calling out the company’s competitors. “Our continued ARPU growth is the clearest possible evidence that authentic value creation is a more resilient and ultimately more successful strategy than manufactured promotion.”
Executives from the company, which does not make public its churn rate, said that figure improved this quarter.
Videotron lost 1,800 internet subscribers, less than the 3,200 it lost last year, for a total base of approximately 1.7 million.
The telecom also lost 9,800 television subscribers, down from the nearly 20,000 it lost last year, for a total base of approximately 1.24 million.
Landline losses this quarter were 12,700, down from the 15,800 it lost last year, for a total base of 523,500.
Media revenue was $185 million, up six per cent. Advertising revenue increased by $7.8 million or 9.6 per cent, driven by the Montreal Canadiens’ long playoff run. Subscription revenue increased by $4.2 million or nine per cent due mainly to higher carriage fees for the television specialty channels.
Sports and entertainment revenue was $48.4 million, down from $51.5 million last year due mainly to lower concert revenues.
