(Montreal) “All the pieces” are in place for Cogeco Communications to launch a mobile telephone service in Canada, assures its president and CEO, Frédéric Perron.
Published yesterday at 1:15 p.m.
Stéphane Rolland
The Canadian Press
The Montreal cable company has a confidential network rental agreement with one of the three major Canadian communications companies. It also entered into another agreement with Eastlink for the supply of technology platforms.
“So here we are, connecting all of that together, our systems, those of Eastlink and that of the network,” summarizes Mr. Perron in an interview. Then, [on doit] train our employees to sell it and finalize our market offer. It’s not a herculean task, but it has to be done. »
The launch should take place “in the coming quarters”, but the manager did not want to comment on whether it would be done by the end of 2025.
Cogeco has been talking about the possibility of launching a mobile phone service in Canada for almost seven years, well before Mr. Perron took the reins of the company last March.
The company first had to ensure that the regulatory environment was favorable to it in order to lease access to the network of a large supplier. The conditions are now met to make the jump.
Cogeco has put a toe in the water by offering this service in Sept-Îles in 2023, in order to meet certain conditions of the regulatory framework of the Canadian Radio-television and Telecommunications Commission (CRTC).
For the proper launch, the company does not intend to go one region at a time, but wishes to quickly offer coverage throughout the territory it serves, in Quebec and Ontario. “We think we’ll get there pretty quickly. We don’t really have any reason to take too much time. »
Cogeco will focus its promotional efforts on packages that will offer cable and mobile telephony in the territories it already occupies. “Our strategy is really to offer it as an additional product to our existing customers to maximize their loyalty,” he explains. The other part of the strategy is new customers shopping for a combined offer. We will be able to have an offer for these customers. »
-Analyst Tim Casey of BMO Capital Markets describes Cogeco’s strategy as a “defensive move,” or “a tool to reduce churn and expand the customer base.”
Mr. Perron recognizes that mobile telephony will be more of a loyalty tool than a major source of revenue at the start of the launch. “In the medium and long term, we still keep the door open, that wireless could one day become bigger, but we also have to see how the market evolves. »
Last spring, Cogeco launched its mobile telephone service in the United States through its American subsidiary Breezeline. “In the United States, it’s still very new. What we’ve learned so far is that it’s easier to sell to our existing customers. The market is also relatively aggressive. So, it takes offers that are competitive. »
Asset sales?
In addition to the wireless launch, investors are wondering whether Cogeco could sell certain assets, notably parts of its network in the United States or spectrum in Canada.
Cogeco has spectrum “in almost all regions where we have a wired network”. “We have invested 588 million in spectrum over the last few years,” says the company’s boss.
By leasing a network, Cogeco may not need all of its spectrum. If its service is more used in certain regions, Cogeco could decide to use spectrum to build its own network. It could also lease its spectrum to another provider. She could also sell part of it, summarizes Mr. Perron.
Rumor has it that the context is more favorable to transactions in the cable sector since the election of Donald Trump “who was more favorable to transactions during his first term,” notes analyst Jérôme Dubreuil of Desjardins Marché of capital, in a recent note.
“However, the mergers and acquisitions market in the cable industry has been very calm for several years,” underlines the analyst. We are not convinced that Cogeco wants to be the first to relaunch it. »
The company is open to the possibility of divesting itself of certain assets south of the border, “if it makes sense strategically, operationally and financially,” replies Mr. Perron.
However, there is no question of packing up. “To be very clear, I am talking about very targeted assets here,” he insists. […] There is no question of leaving the American market. We are very proud of our presence in the United States. »
