Now that the acquisition of Shaw’s wireless subsidiary has been completed, the Quebecor big boss says the strategy to attract new customers will be implemented “relatively quickly”, and says he is convinced that the company he directs has everything it takes to make a name for itself in the rest of Canada.
“If you ask me if we are missing something, the answer is no, we are missing nothing to be successful,” says Pierre Karl Péladeau in an interview to provide an update on the purchase of Freedom Mobile, a 2.85 billion transaction carried out on the sidelines of the merger of Rogers and Shaw.
“We have all the assets necessary to offer a very high quality product, very advantageous. »
The transaction approval process dragged on for many months, to the point that Freedom’s and Shaw’s management teams were “on hold,” says Pierre Karl Péladeau.
To this end, he prefers to remain discreet about the details. “Our competitors are always watching and listening. We do not want to divulge our strategies. »
Quebecor will not have the same tools (newspapers, TV channels, etc.) as in Quebec to advertise its products. Marketing expenses will therefore be higher.
Pierre Karl Péladeau, however, is not of the same opinion as those who believe that Quebecor is penalized because the company cannot offer all the services in packages offered by the competition.
He explains that the acquisition last year of the independent telecommunications provider VMedia, which offers IP television, the Internet and telephony with subscribers mainly in the greater Toronto area, will make it possible to offer products in assembly.
In addition to taking advantage of VMedia, Pierre Karl Péladeau adds that the company has other tools at its disposal, in particular the roaming agreement closed with Rogers.
He also points out that Videotron has gone from zero cell phone subscribers when it launched wireless activities 15 years ago to 1.7 million subscribers today.
“This is testimony to the success of our strategies and we intend to deploy them going forward for Freedom. »
The success of the expansion outside Quebec will be measured, according to Pierre Karl Péladeau, by the results that will be presented from one quarter to the next, the improvement of the balance sheet, profit margins, cash flows, the reduction in the level indebtedness and growth in the number of subscribers. “And also by what analysts will say as time goes on,” he says.
When asked if a deadline has been set for throwing in the towel in the event that the expansion project outside Quebec does not work, he hardens his tone. “It’s not about pulling the plug. I would be surprised if that is the case in six months, in two years or in five years. There is a fourth operator who was born,” he said.
“With a better product, better prices and cheaper roaming, success will be there. »
Mr. Péladeau even maintains that he does not foresee “enormous challenges”. “We have the operator expertise. For the marketing aspect and media placement in Canada, he recalls that Quebecor was once one of the largest newspaper publishers in the country.
Quebecor never offers forecasts and has no plans to start doing so. Pierre Karl Péladeau therefore did not wish to reveal the financial objectives set internally for the market shares to be achieved, the revenues, the number of subscribers or others.
Future capital expenditures will be in the hundreds of millions. “But they will not penalize our ability to generate free cash flow,” says Pierre Karl Péladeau.
Quebecor’s results have for nearly two years now reflected a slowdown in growth caused in particular by the more mature stage reached by the company’s wireless activities in Quebec as well as by the intensification of competition offered by BCE in Province.
“The reality is that Quebecor needs Freedom,” said BMO analyst Tim Casey in a report released Monday.
Quebecor stock broke above $34 on Monday in Toronto, a level not seen since May 2021. The stock closed the first trading session of the week up 1% at 33.80. $.
After supporting the Rogers and Shaw merger project for months and reassuring the federal government by buying Shaw’s wireless subsidiary, Quebecor announced on Monday that it had settled a dispute that had pitted it against Rogers for two years.
Quebecor’s main subsidiary, Videotron, claimed 850 million from Rogers in connection with a 20-year partnership signed in 2013 for the joint development of a 4G LTE wireless network in Quebec and the Ottawa region.
The Videotron and Rogers project had turned into a commercial dispute leading to the filing of a lawsuit in the Superior Court of Quebec in the fall of 2021.
Quebecor accused Rogers of having caused an impasse in the development of the common network while the two parties struggled to agree on the sharing of costs related to an update of the network. Relations had become strained to the point of leading to the development of alternatives such as the establishment of parallel networks.
Quebecor management said Monday that the companies remain committed to pursuing the agreement and investing in the joint network.
Pierre Karl Péladeau did not want to specify the terms of the settlement. “We have agreed with Rogers that this is confidential. He simply adds that the current management of Rogers has returned to the essence of the spirit of the original agreement, which was to ensure that we had the best network at the best cost.
