Péladeau says Quebecor will stick to facilities-based model long-term

Quebecor Inc. CEO Pierre Karl Péladeau said “there's no reason at this stage” that the company will change its business model from a facilities-based to an MVNO-based model. Péladeau told analysts on a Thursday morning quarterly call that the cost of facilities-based technology is moving downward, allowing them to build networks for cheaper than before which is better for creating a competitive environment. "We've been building our business on a facilities-based model that gives us flexibility, and there's no reason we would change it at this point," Péladeau told investors. Péladeau previously said that his company is waiting on the CRTC to “hurry up” and finish determining the framework for MVNO agreements, but at the same time said that they are not giving up on acquiring Shaw Communication Inc.’s Freedom Mobile. His comments came in February, when it was reported that Globalive Capital Inc. offered $3.75 billion to acquire Shaw’s wireless assets. National Bank analyst Adam Shine wrote at the time that it was likely that Quebecor would “end up exploring MVNO in a couple of test markets in 2023 to carefully assess any wireless move outside its core province of Quebec using the all-digital Fizz brand.” In a Thursday note Canaccord Genuity analyst Aravinda Galappatthige, wrote that the “recent developments in the Rogers-Shaw saga, has brought Quebecor back into serious contention as a potential buyer of the Shaw wireless assets” but that the markets may be “overestimating the probability of the acquisition.” In its first quarter results for the year, Quebecor reported just under $1.09 billion in revenue for the three months ending March 31. The revenue was down $3.1 million, or 0.3 per cent, from the same period of 2021 which saw just over $1.09 billion in revenue. Profits for the Quebec-based company were also down by 2.5 per cent, decreasing from $120 million in 2021 to 117.1 million this quarter. The telecommunications sector saw a $10.6 million, or one per cent, decline in revenue since last year. The company reported $914 million in revenue for the telecommunications sector in its first quarter of 2021 and $903.4 million this quarter. The decrease was attributed to a decrease in the volume of equipment sales related to its wireline telecom services. Within the telecommunications sector, the internet division brought in $298.6 million in revenue, a 0.07 per cent increase from last year’s first quarter which reported $296.6 million in revenue. Television saw a 7.5 per cent decline in revenue going from $213.million in the first quarter of 2021 to $197.3 million this quarter. The wireless division reported a 9.9 per cent year-over-year increase in revenue, jumping from $170.5 million to $187.3 million. Quebecor’s media sector saw an almost four per cent climb in revenue since its first quarter in 2021, increasing from $174.8 million to $181.8 million. Sports and entertainment reported an 8.5 per cent increase in revenue, jumping from $31.2 million to $34.1 million. Quebcor added 2,400 more wireless revenue-generating units (RGUs) than it did during last year’s first-quarter for a total of 1,626,400. Internet saw 8,100 less additions than it did during this time last year, for a total of 1,846,100 RGUs. Quebecor lost 12,200 subscribers in the quarter, 5,900 less than the 18,100 subscribers the company lost in the same quarter last year. Television now has approximately 1,406,400 RGUs. Quebecor’s total average revenue per user (ARPU) was $46.64, which accounts for a $0.24 increase from last quarter. Its wireless ARPU decreased by $0.62 cents for a total of $38.08 this quarter. Videotron’s revenues from mobile services and equipment increased by $20.1 million, or 8.7 per cent, in the first quarter of 2022. Videotron’s total ARPU decreased by $0.82, totalling $46.40, “due in part to the larger proportion of units,” in wireless, according to the company’s quarterly report. Videotron’s mobile ARPU totalled $38.70 this quarter which accounts for a $0.29 increase since this time last year. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Péladeau says Quebecor will stick to facilities-based model long-term

News | May 13, 2022

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Péladeau says Quebecor will stick to facilities-based model long-term

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