Quebecor calls for swift news media compensation legislation

Quebecor Inc.’s president and CEO is renewing calls for the federal government to implement a news media compensation strategy, to “ensure the sustainability of advertising revenue, and the vitality of competitiveness” and for the CRTC to ensure swift negotiations with incumbents on wireless network access. Pierre Karl Péladeau made his comments Thursday during a second quarter earnings call with industry analysts. “It is more urgent than ever that the federal government legislate to enable Canadian publishers to negotiate collectively with the web giants to obtain fair compensation for the use of other content,” he said. “Canadian Heritage concurs with this position, which we have been defending for years. It's time for the government to table a bill that was a framework that enables newspaper publishers to negotiate on a level playing field. We need to stand together if we are to secure the future of news coverage in Quebec and in Canada.” Quebecor also recently spent $830 million purchasing 294 blocks of 3,500 MHz spectrum in Quebec, southern and eastern Ontario, Manitoba, Alberta and British Columbia. “The outcome of this auction is for us the first essential step toward the expansion of our telecom services outside of our base of Quebec to key markets of Ontario, and Western Canada, where we believe we are uniquely qualified... in providing Canadians with well priced technologically superior telecom services,” Péladeau said. With its recent spectrum purchases, and the CRTC’s decision to mandate access to incumbent wireless networks for big regional players with spectrum assets, the question remains just how the company will go national. Péladeau said the CRTC needs to monitor the negotiations with the incumbents for mandated access on their networks in a timely manner for it to promote better competition. “It is important that the regulatory authorities make good on their recently announced decision and mandate the appropriate framework whereby efficient and timely negotiation can be concluded, and ensure that MVNO become the true alternative to encourage ongoing competition in Canada,” he said. Péladeau pointed to recent negotiations with BCE Inc. over third-party internet access as evidence that the CRTC should monitor MVNO negotiations. “It is important to highlight, once again, the difficulties we had for years to access the infrastructure owned by Bell, to accelerate the deployment of high speed internet in our Quebec market," he said. "CRTC intervention was ultimately required to force Bell to give access to infrastructure on reasonable terms, so that CRTC should now be proactive this time around, and impose as quickly as possible, specific regulations for wireless network access to achieve the policy objectives.” According to industry analysts, Quebecor performed slightly better than anticipated this quarter, for the three months ending in June 30, thanks to its media sector -- which saw revenues at $198.2 million, a 49.54 per cent increase from last year’s $132 million. “Quebecor reported a beat in terms of financial results ... while subs were somewhat below expectations. The financial beat was partly due to media, which rebounded more dramatically than our rather conservative estimates, but also robust growth in the telecom revenue,” Canaccord Genuity analyst Aravinda Galappatthige said in a Thursday afternoon note. “However, internet and wireless sub adds were lighter.” The company's telecommunications division saw a 6.8 per cent increase in revenue, for a total of $928.4 million. Quebecor reported total revenues of $1.13 billion, up by 12.7 per cent ($127.4 million), compared to this time last year. However, its net income of $124.7 million was down from its second quarter of 2020, which saw profits of $174 million. Quebecor attributed the drop in profit, despite the rise in revenue, to the refinancing of debt and lower profits from discontinued operations. Quebecor said its subsidiary, Videotron “significantly increased its revenues” in wireline equipment by 127 per cent ( $28.1 million), mobile services and equipment by 12.4 per cent ($26.3 million) , and internet access by 9.3 per cent ($25.7 million) in the quarter. Its other subsidiary, TVA Group, saw a 53.5 per cent increase in revenue, an additional $55.6 million, since the second quarter of 2020 “driven in part by significant growth in advertising revenues at TVA Network and the specialty channels,” according to Péladeau. “The TVA Sports specialty channel stood… mainly because of the Montreal Canadiens’ strong performance in the National Hockey League playoffs. As well, the Film Production and Audiovisual Services segment is operating at full steam again,” he said. Quebecor reported that its mobile telephone service saw 1.53 million connections this quarter, an increase of 27,200, or 1.8 per cent, from the same quarter last year. It had an average billing per unit (ABPU) of $50.30, down by two cents since this time last year. Internet services saw a total of 1.81 million subscribers, a 5,300 (0.3 per cent) increase from last year. Television continued to see a decline in subscribers, from 1.49 million in June 2020 down to 1.44 million this year. Regarding it’s upcoming plans, the company plans to launch Vrai, which it claims is Quebec’s first subscription streaming service devoted entirely to unscripted lifestyle, documentary and entertainment content, by the end of 2021. -- Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Quebecor calls for swift news media compensation legislation

News | 08/05/2021 6:14 pm EDT

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