Videotron admits to ongoing talks with WIND about expanding beyond Quebec

Scotiabank hosted its Telecom & Cable Industry Conference in Toronto today, inviting executives and analysts from all of the country’s big firms to listen and participate. 

Among them was Quebecor’s CFO, Jean-Francois Pruneau, who fielded yet another deluge of questions surrounding Videotron’s wireless expansion plans.

Pruneau admitted that the company has been in talks with WIND and its new financial partners about expanding Videotron’s reach outside of Quebec and Eastern Ontario, but said nothing will be decided until the CRTC begins regulating domestic roaming rates at costs low enough to ensure a profitable business.

According to Cartt.ca, Pruneau said that his company does not want to go it alone, like WIND and Mobilicity have tried and largely failed to do; any national expansion would leverage existing networks. Videotron recently partnered with Rogers on its LTE rollout, and admits to weighing the options of purchasing Mobilicity, which would give it an existing, albeit small, national footprint in cities like Toronto, Ottawa, Vancouver and Calgary.

He also cautions that a national wireless network would, despite the same name, offer a more limited customer service experience than Videotron currently offers in its home province. The company is able to entice customers by bundling home internet, cable television and wireless service together, and Quebecor Media owns a vast selection of French- and English-language content, similar to Rogers and Bell in the rest of Canada.

According to Cartt, the most likely scenario for Videotron would be to partner with the newly-recapitalized WIND Mobile. Quebecor has been in talks with West Face, one of WIND’s financial backers, and Pruneau says “they know we have assets to contribute.”

Underscoring Videotron’s expansion is its release of the iPhone, which has contributed to higher ARPU over the past 12 months. WIND’s backers are likely eager to increase the new entrant’s own ARPU, which sits at $31.60. Higher data usage from an LTE network, and the ability to offer the iPhone, are seen as the two easiest ways to raise that all-important number.

For now talks continue, but Videotron is biding its time. It is sitting on 700Mhz spectrum in Ontario, British Columbia and Alberta, and while it says, thanks to a ubiquitous LTE network throughout Quebec, it has an advantage in negotiating reciprocal domestic roaming agreements with other providers like Bell and TELUS, what happens at the CRTC will likely be the determining factor for Videotron moving forward.

[source]Cartt.ca[/source]