“All songs” are in place so that Cogeco Communications can launch a mobile phone service in Canada, assures its president and chief executive officer, Frédéric Perron.
The Montreal cable cars has a confidential network rental agreement with one of the three major Canadian communications companies. He also concluded another agreement with Eastlink for the supply of technology platforms.
“So there, we are connected all this together, our systems, those of Eastlink and that of the network,” sums up Mr. Perron in an interview. Plus, (we must) train our employees to sell it and finalize our market offer. It is not a Herculean job, but it must be done. »»
The launch should occur “in the coming quarters”, but the manager did not want to come forward if it would be done by the end of 2025.
Cogeco talks 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 had to ensure that the regulatory context was favorable to it in order to rent access to the network of a large supplier. The conditions are now met to make the jump.
Cogeco put a toe to the water by offering this service to Sept-Îles in 2023, in order to meet certain conditions of the regulatory framework of the Canadian Radiation and Telecommunications Council (CRTC).
For the right launch, the company does not intend to go there a region at a time, but wishes to quickly offer coverage to the size of the territory it serves, in Quebec and Ontario. “We think we are going there fairly quickly. We don’t really have a reason to take our time too much. »»
Cogeco will focus its promotional efforts on the 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 who shop for a combined offer. We will be able to have an offer for these customers. »»
Analyst Tim Casey, of BMO capital markets, describes the Cogeco “defensive gesture” strategy, that is “a tool to reduce the unsubscribe rate and to extend the customer basin”.
-Perron acknowledges that mobile telephony will be more a loyalty tool than a major source of income at the start of the launch. “In the medium and long term, we still keep the door open, that wireless one could one day become bigger, but you also have to see how the market is evolving. »»
Last spring, Cogeco launched its mobile telephony service in the United States through its American subsidiary Bouezeline. “In the United States, it’s still very recent. What we have learned so far is that it is easier to sell it to our existing customers. The market is also relatively aggressive. So it takes offers that are competitive. »»
Sales of assets?
In addition to the launch of wireless, investors questioning whether Cogeco could sell certain assets, including parts of its network in the United States or the Specter in Canada.
Cogeco has spectrum “in almost all regions where you have a wired network”. “We have invested $ 588 million in spectrum in recent years,” said the business owner.
Thanks to the rental of a network, Cogeco may not need all its spectrum. If its service is more used in certain regions, Cogeco may decide to use spectrum to build its own network. She could also rent her spectrum to another supplier. She could also sell part, summarizes Mr. Perron.
The noise runs that the context would be more favorable to transactions in the cable sector since the election of Donald Trump “which was more favorable to transactions during his first mandate”, notes analyst Jérôme Dubreuil, of Desjardins Market capital, in a recent note.
“However, the mergers and acquisition market in the cable industry has been very calm for several years,” said the analyst. We are not convinced that Cogeco wants to be the first to restart it. »»
Cogeco is open to departing from certain assets south of the border, “if it makes sense strategically, operationally and financially,” replies Mr. Perron.
However, there is no question of bending baggage. “To be very clear, I’m 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. »»
