MONTREAL – After analyzing the spectrum auction rules, meeting with several potential partners and talking business plans, Quebecor Media chief Pierre Karl Peladeau says his company will be a national wireless player.
Well, he didn’t say national for sure, but if he’s going to play the game outside of Quebec, which he did say for sure, it’s more than likely to be a nationwide play. He has already said he likes the advanced wireless spectrum auction rules set out late last year by Industry Canada and that he will bid on spectrum. Today was the first time he committed to building a wireless company beyond his home province.
During a conference call with the financial community on Tuesday on the release of its 2007 results, Peladeau said there have been “numerous foreign investors we’ve been talking with for the past few months,” and that Quebecor is “finalizing our business plan for setting up a wireless operator outside our telecom historical footprint of Quebec.”
Simply, Peladeau believes this is a significant growth opportunity that won’t come again as Canadian wireless penetration levels still show room for growth and with “very favourable auction conditions” (that is, mandated roaming on incumbent networks, tower sharing and the spectrum set aside we have detailed here) other investors believe so, too.
The Quebecor CEO didn’t identify the potential investors and whether or not they are merely financial backers or strategic partners like another telco or media company.
As well, Peladeau rightly pointed out that his company already plays the game – if not quite in the major leagues. Cable and telecom subsidiary Videotron has 46,000 Quebec wireless customers via its MVNO on the Rogers Wireless network so it has billing and marketing already in place and a valuable, trusted brand in Quebec.
It also has a nationwide chain of newspapers and web outlets from which to promote a new wireless company. And if its price-cutting success in the wired home phone business is any indicator (640,000 customers so far), Quebecor will have no problem with a price war.
“We will start very far from scratch,” added Peladeau.
But it won’t be cheap. When asked if a national wireless venture would cost more than the $500 million (buying spectrum and building a network has its costs) Peladeau has committed to already, the CEO had a one word answer: “Yes.”
He didn’t elaborate beyond that.
