Wireless: a change could encourage Quebecor to expand its footprint
Quebecor is not closing the door to the possibility of offering wireless services outside Quebec if the Canadian Radio-television and Telecommunications Commission (CRTC) opts for regulatory changes.
Share November 5, 2020 4:21 p.m. Share Wireless: a change could encourage Quebecor to expand its footprint Julien Arsenault The Canadian Press MONTREAL – Quebecor is not closing the door to the possibility of offering wireless services outside of Quebec whether the Canadian Radio-television and Telecommunications Commission (CRTC) opts for regulatory changes.
This breakthrough, if it were to materialize, would come through Fizz, the low-cost cell phone and internet provider deployed two years ago by Videotron, the main subsidiary of the telecommunications conglomerate.
“Yes, absolutely,” replied the president and CEO of Videotron, Jean-François Pruneau, Thursday, in response to an analyst, as part of a conference call to discuss the results of the third quarter. That being said, we do not have (infrastructure) outside of Quebec. We should find a partner. ”
Many are waiting to hear about the CRTC's decision on mobile wireless services. Some are arguing for the arrival of virtual mobile network operators who could lease access to the network from major national players such as Bell, Rogers and Telus.
Others, like Cogeco, want to deploy a hybrid model that would result in investments to set up a network in certain regions and rental elsewhere.
“If we are able to find a partner, yes, there would be some logic since Fizz is an autonomous platform,” said Mr. Pruneau.
In the Quebec market, the company, which rolled out its cell phone service a decade ago, had some 1.45 million active lines as of September 30. This represents an increase of around 48,000 lines compared to the second quarter. Videotron estimates its market share in Quebec at 20%.
In terms of its financial performance, Quebecor saw its net income decline 21% in the third quarter to $ 140.9 million, or 56 cents per share. In particular, the company attributed this result to a restructuring charge of $ 18.9 million as well as to adjustments to financial instruments.
However, its revenues rose 3.6% to $ 1.11 billion, mainly thanks to its telecommunications sector, which saw its revenues grow by 7% to $ 938 million. The media division saw its revenue decline 6% to $ 157.2 million as the COVID-19 pandemic weighed on its advertising revenue. In the sports and entertainment division, the decrease in turnover was 13%, to $ 48.5 million, mainly because the health crisis slowed filming at Mels Studio.
“Production has restarted and the level of activity at Mels is back on track,” said Quebecor President and CEO Pierre Karl Péladeau.
Excluding non-recurring items, the conglomerate posted adjusted profit of $ 173.1 million, or 69 cents per share, down slightly from $ 173.8 million, or 68 cents per share, in the third quarter of the year. last year.
Analysts had expected revenue of $ 1.04 billion and adjusted earnings per share of 64 cents, according to forecasts collected by financial data firm Refinitiv.
“The telecommunications division led the charge mainly due to higher margins, while the decline on the media side has been (less marked than anticipated),” observed Aravinda Galappatthige, of Cannacord Genuity, in a note sent to his clients.
On Thursday afternoon, on the Toronto Stock Exchange, Quebecor's Class B share was trading at $ 32.12, up 67 cents, or 2.13%.