Cable / Telecom News

Regulators can rest easy with Videotron entry into national wireless market: Bell CEO


By Ahmad Hathout

MONTREAL – A well-funded Videotron, newly equipped with Shaw’s Freedom Mobile, will mean regulators will not need to worry about a viable wireless fourth player in an already competitive market, Bell CEO Mirko Bibic said during a first quarter conference call Thursday.

“We now have four well-capitalized significant players,” Bibic said. “That is very rare across the global footprint, and I think if you are sitting there from a public policy position…having four players like that is quite significant and will enhance competitive competition and consumer value.

“I think the job ought to be considered as having been done on the wireless front from a public policy and regulatory perspective,” Bibic added.

Videotron closed its acquisition of Freedom last month, which triggered Rogers’s purchase of Shaw.

Bibic said the country is among few in the world still with four players after, most notably, T-Mobile’s acquisition of Sprint in the United States three years ago. The federal government for years has maintained that having four players in the telecommunications industry is the proper method to achieve competition that drives down prices for consumers. It’s through this lens that assisted regulators in approving the Rogers-Shaw deal.

On prices, Bibic also said Rogers’s announcement earlier this morning to lower the price of 5G data may help regulators understand that Canadians are paying lower prices that studies suggest.

Calling price studies that put Canada as a leading country for expensive wireless data “unsophisticated,” Bibic argued that the majority of telecommunications sales happen during intense promotional periods during back-to-school and the holiday seasons – the third and fourth quarter. In other words, Canadians do not pay what the studies suggest they pay, he argued.

Bibic added that the Rogers announcement puts in plain view what Canadians actually pay for such services.

The Rogers announcement also includes a 35 per cent reduction in wireless plans when bundled with the company’s wireline services. Bibic noted that Canadian telecoms, by global comparison, are advantaged in that there is heavy overlap with their wireline and wireless infrastructure, meaning providers can drive down prices if customers buy both internet and wireless from the same company.

“[It] shows the bundling value proposition really does matter in the marketplace to consumers and will continue to be an important differentiator,” Bibic said. “And the players with the largest wireline basis, in my view, will do very well, and on that we cover 75 per cent of the country with wireline infrastructure and increasingly fibre.”

For years, the telecoms have said that immigration will play an important role in growing their service bases. On Wednesday, Bell announced it is partnering with Air Canada to provide newcomers to Canada with access to wireless services by providing SIM cards to the immigrants.

Bibic said this is a strategy to get new Canadians quickly acquainted with the company and build loyalty.

Also on Thursday, the company announced that its chief financial officer Glen LeBlanc is retiring from the position September 1. He will be replaced by Curtis Millen, who is currently senior vice president of corporate strategy and treasurer.

The company reported a 3.5 per cent year-over-year increase in revenue to $6 billion for the quarter ending March 31, which was attributed to slightly higher service revenue and a 23.6 per cent increase in product revenue. Net earnings dropped 15.6 per cent to $788 million due to higher interest, depreciation and amortization expense, and higher charges due to less use of real estate since the instatement of hybrid work policy.

On wireless, Bell reported a 26.5 per cent increase in new postpaid subscriber additions of roughly 42,300 in the quarter, but lost 16,654 prepaid subscribers compared to the 2,054 it lost in the same quarter last year. Still, the total subscriber base of both segments increase 4.3 per cent to 9 million and 862,545, respectively, at the end of March.

On internet, the company added 4.8 per cent more subscribers over the year for a total of 27,274 in the quarter. The total subscriber base increased 8.2 per cent to nearly 4.3 million.

On television, the company lost a total of approximately 14,000 subscribers in the quarter, a 66.8 per cent increase from the year prior. Broken down, IPTV gained nearly 11,000 subscribers compared to 12,260 in the comparable period last year. The company lost nearly 25,000 satellite TV subscribers, compared to the 20,600 subscribers it lost over the same period.