Ottawa Citizen

Quebecor spends big in wireless auction

- SANDRINE RASTELLO

Quebecor Inc. spent $830 million in Canada's wireless spectrum auction Thursday, a move that signals an ambition to challenge the country's three dominant telecommun­ications companies in 5G services.

The Montreal-based cable and media company currently offers wireless services primarily in Quebec. But it snapped up 294 licenses covering about 30 million people, including blocks of spectrum in southern and eastern Ontario, Alberta and British Columbia, positionin­g the company “to realize its ambition of boosting healthy competitio­n in telecom beyond the borders of Quebec,” Quebecor said in a statement.

“The biggest surprise in the results is the $830 million spent by Quebecor,” CIBC World Markets analyst Robert Bek said in a note. The spending suggests “the clear aspiration to become the fourth national wireless player in Canada.”

The aggressive move for a share of the 3,500 MHz spectrum, a critical component of the nation's 5G rollout, paves the way for Quebecor to seek out acquisitio­ns.

Quebecor chief executive Pierre Karl Péladeau has expressed an interest in buying Freedom Mobile — the wireless division of Shaw Communicat­ions Inc. that some analysts believe may be put up for sale as a condition of Rogers Communicat­ions Inc.'s proposed takeover of its rival.

Quebecor restated its interest in buying the asset. “We are confident that we are the right player, the one with a real ability to break the oligopoly and put consumers ... back in the driver's seat,” Péladeau said.

If assets aren't available to buy at the right conditions, Quebecor's Videotron unit can instead operate a virtual network in the new regions it plans to enter, Péladeau told analysts on Friday. Under that option, a company leases wireless network capacity from another provider. But under new rules, Quebecor would have to build its own network infrastruc­ture in those regions within seven years.

Concerns about Quebecor's strategy in the auction, its eyeing of Freedom Mobile, and the recent departure of Videotron CEO JeanFranço­is Pruneau were already weighing on the stock, Scotiabank analyst Jeff Fan wrote in a report earlier this month.

Quebecor shares are down about 4.5 per cent since the Rogers- Shaw deal was announced in March, trailing an index of Canadian telecom firms that's up about 6.9 per cent.

 ?? ANDREJ IVANOV/BLOOMBERG FILES ?? Quebecor aspires to break the wireless oligopoly and become a major national wireless player.
ANDREJ IVANOV/BLOOMBERG FILES Quebecor aspires to break the wireless oligopoly and become a major national wireless player.

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