Cogeco ‘very optimistic on wireless’: CEO

Cogeco Inc. is looking forward to the upcoming spectrum auctions in 2020, especially since Innovation, Science, and Economic Development put in place new tier 5 spectrum licensing rules this past summer. The new licenses, Cogeco CEO Phillippe Jetté said on a 4th quarter earnings call Thursday, “would allow Cogeco to be more focused and use its capital more efficiently if it participates in future auctions.” The ISED decision creates 654 smaller spectrum licensing areas across the country, meant to help new entrants like Cogeco, which currently does not have a wireless business. “We remain very optimistic on wireless, as the CRTC public hearings on the future of mobile and specifically the provision of mandated wholesale access will soon begin in February 2020,” Jetté said on the call. He also reiterated his belief in the hybrid mobile network operator (HMNO) model -- proposed by Cogeco to the CRTC during the regulator’s MVNO review -- as a happy compromise. The model, Jetté told analysts, “should meet the government’s policy objectives of increasing competition while safeguarding investments into the communications networks and promoting innovation.” The HMNO model posits that companies like Cogeco that have broadband facilities should be allowed access to existing wireless networks, as long as the HMNO reinvests in their own infrastructure. The Cogeco CEO also said that the company would be rolling out its IPTV service in the start of the 2020 calendar year. It previously said it expected to launch the service by the end of 2019. The company reported revenue increases of 3.1 per cent in the quarter, which ended Aug.31, over the same period last year. Revenue was up from $592 million in the fourth quarter of 2018 to $610 million in the same quarter of 2019, while profit was up 25.7 per cent from $77 million to $97 million. In a release accompanying the results, the company said the growth in revenue was mostly driven by rate increases in its American division, and mostly by a six per cent rate increase in Florida implemented in August 2018, as well as acquisition of a fibre network in south Florida previously owned by FibreLight LLC last October. Decreased operating expenses also boosted the profit margins, the company said. In its Canadian business, Cogeco added 2,540 internet subscriber additions in the quarter for a total of 788,243 internet subscribers, while it lost 8,164 basic cable subscribers in the quarter, bringing that number down to 649,583. On the United States side of Cogeco’s operation, the company added 5,294 basic cable subscribers in the quarter, bringing their total to 312,555, down slightly from the 317,252 cable subscribers they had in the last quarter of 2018 . They also added 2,441 internet subscribers in the quarter, for a new total of 446,137, which was up from 424,948 this time last year. The company said it saved $10 million this year in the implementation of a new customer management system, and says it expects the new system to save some $14 million annually going forward. Jetté also said that, given the Federal Court of Appeal’s stay of the retroactive payments for the new Internet wholesale rates, it was not yet reporting the $25 million that the new rates would cost the Cogeco. According to Desjardins analyst Maher Yaghi, the results “were mostly in line with expectations,” adding that “underperformance in TV and Internet was offset by stronger-than-expected home phone subscribers” in Cogeco’s Canadian business.

Cogeco ‘very optimistic on wireless’: CEO

Brief | October 31, 2019

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Cogeco ‘very optimistic on wireless’: CEO

Brief | October 31, 2019

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