Videotron planning moves on prepaid wireless: CEO

Quebecor Inc.’s Videotron will follow the incumbents’ lead and put in place initiatives to increase its stable of prepaid wireless customers, Videotron CEO Manon Brouillette indicated in a conference call with analysts Thursday. “Stay tuned. We are preparing something in that area,” she said in response to a question about companies like BCE Inc. who have been launching prepaid services with the hopes of attracting customers who can later be converted to postpaid. Telus Corp. CEO Darren Entwistle also expressed interest in such a strategy last week. The company added 31,900 wireless subscribers in the quarter that ended June 30, reporting a total of 1.08 million, up from 953,300 a year earlier. But that was lower than the 32,400 it added in the same quarter last year. Wireless average billing per unit (ABPU) was $53.70, up from $53.32 in Q2 of 2017. Desjardins analyst Maher Yaghi said in a research note Thursday that the “lower-than-expected ABPU growth is in line with recent reporting from wireless incumbents, all of which are feeling pressure from increased promotions in the market.” Part of the reason for that slowing in ABPU growth was the increase in bring-your-own-device plans, Brouillette said in the press release, outlining that those plans made up more than 35 per cent of “new mobile activations during the period, which helped reduce customer acquisition costs and boost the profitability of mobile services. “ Yaghi added the company “still has potential upside in terms of working to increase its market share in Québec (and in Ottawa with its recent push); we therefore still see good upside from wireless for the firm in the next few years.” The company announced a marketing push in the Ottawa region in June, aiming to raise its profile in that market, its only one outside of Quebec. “We’ve had a tremendous success there,” Brouillette said in the conference call. “What we’ve done is put in place teams that are focused on that market. We also opened new stores… there was an opportunity, there was a momentum, and of course we’d like to grab as customers as we can in that marketplace.” Quebecor reported overall revenues of $1.04 billion, a 0.5 per cent increase from a year earlier. Net income was $52.8 million, down from $182.3 million. Part of the reason for that was the gain the company experienced “on the sale of a spectrum licence recorded in the second quarter of 2017,” it said in the quarterly results press release. Videotron sold its AWS-1 spectrum in the Greater Toronto Area to Rogers Communications Inc. in June 2017. The telecom segment had $847.2 million in revenues, up 2.5 per cent from $826.6 million a year earlier, with the company reporting a 12.9 per cent increase in wireless revenues and a 5.8 per cent increase in Internet service revenues. Media revenues were down 6.5 per cent, to $186.5 million from $199.5 million. Part of the reason for the reduced revenues was because the Montreal Canadiens hockey team didn’t make it into the playoffs, while “TVA Network’s financial performance also declined as a result of the decrease in advertising revenues,” TVA Group president and CEO France Lauzière said in the press release. She told analysts that the company would “work on our content strategy to offer 12-month content, over the year,” which would reduce the impact of the revenue “associated with the performance of the Montreal Canadiens.” Videotron had 1.67 million Internet customers, up from 1.63 million in the second quarter of 2017. TV subscribers stood at 1.61 million, down from 1.66 million over the year. But the company did continue growing over-the-top (OTT) service subscribers, reporting 391,900 at the end of the quarter, up from 337,600 the previous year. Brouillette also gave analysts an update on the company’s plans to introduce IPTV service, saying Videotron is “eager” to begin employee testing in the coming months. She added that the company has completed its rollout of DOCSIS 3.1, “allowing us to deliver speeds of up to 1 Gbps across our entire footprint.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Videotron planning moves on prepaid wireless: CEO

Broadcast | August 9, 2018

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