Strong wireless trend continues with Quebecor Q2

Quebecor Inc. continued the industry trend of steady gains in wireless this past quarter, with Videotron’s mobile phone revenues jumping to almost $150 million in the three months ended June 30. In its second fiscal quarter report Thursday, Quebecor said the 21.8-per-cent increase from the $122.8 million in revenue generated the same period a year earlier was “essentially due to growth in the number of subscriber connections and higher net revenue per connection.” Videotron ended the quarter with 32,400 more wireless subscribers, for a total of 953,000, just shy of the 33,200 subscribers added in the same quarter a year earlier. Its wireless average revenue per user (ARPU) at the end of June was $53.52, a six-per-cent increase from the $50.51 reported the previous year. “Wireless service has continued to lead our solid performance,” Manon Brouillette, Videotron president, said in a Thursday conference call with analysts, noting that the company’s monthly churn rate was stable at 1.3 per cent. The quarter marked the first of what will be two consecutive quarters to reflect Quebecor’s recent transfers of spectrum to Rogers Communications Inc. and Shaw Communications Inc.’s Freedom Mobile, with an $87.8-million gain realized in the quarter from the Rogers deal. On the Thursday conference call, Pierre Karl Péladeau, Quebecor president and CEO, said they’re “very satisfied with the outcome of our process of disposal of our portfolio of out-of-Quebec wireless spectrum licences.” Not only will there be a financial boost, “but most of our licence remains in the hands of another new entrant which can only be positive for the Canadian competitive landscape,” Péladeau said, referring to the Freedom deal, which will be reflected in the third quarter report. Selling those assets also frees up some cash to realize a stated goal of making a deal with Caisse de depot et placement du Québec to reclaim a 100-per-cent interest in Quebecor Media, as well as ongoing work towards an IPTV asset, Péladeau said, which will “require a significant level of capital.” He would only add, when asked by analysts about the next-generation TV service, that “it should not be so long” before more details are announced. Péladeau also commented on the upcoming 600 MHz auction, for which Innovation Canada has proposed setting aside 43 per cent of the spectrum for smaller players, which analysts have said will benefit both Quebecor and Shaw. “I would also like to ensure Minister Bains and his team that we intend to actively participate in the public consultation to come in respect to the 600 MHz spectrum auction and we welcome the proposed favourable positions for new entrants in this said auction,” Péladeau said. Total revenues for Quebecor’s Videotron division grew by 5.1 per cent, or $39.7 million, to $820.1 million in the second fiscal quarter of 2017 compared to the $778.7 million generated in the second quarter of 2016. The telecommunications segment ended the quarter with 5.8 million total subscribers. Outside of its wireless gains, it lost 900 cable internet subscribers for a total of 1.6 million — a much smaller decrease than the 6,400 internet subscribers lost in same period a year earlier. Videotron’s cable TV customer base decreased by 23,900, for a total of 1.7 million subscribers, compared to a decrease of 24,500 a year earlier. Subscribers to its over-the-top (OTT) Club Illico service increased four per cent (or by 13,100) to 337,600, compared to the 1,100 subscribers added in the second quarter of 2016. Landline phone subscribers decreased by 1.6 per cent, to 1.2 million, losing the same amount of subscribers, 20,300, as the same period a year earlier. Videotron’s total ARPU increased 7.2 per cent from the same period a year earlier, to $153.28, compared to $143.01. On its media side, revenues increased by $1.8 million over 2016, bringing in $231 million in the second quarter of 2017 “mainly as a result of higher advertising and subscription revenues at its broadcasting business,” Quebecor said. Overall, Quebecor had revenues of $1.03 billion, a four-per-cent increase from the $992.5 million generated the same period a year earlier. It closed the quarter with a profit of $175.7 million, an increase from the $25.2-million profit in 2016. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Strong wireless trend continues with Quebecor Q2

News | August 10, 2017

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Strong wireless trend continues with Quebecor Q2

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