Challenge to Canada’s big three cellphone carriers may benefit Alberta, says Videotron boss

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Albertans wanting lower cellphone bills and more innovative service should welcome a new player in the marketplace, says the head of Quebec’s mobile company Videotron.

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Successive Canadian governments and regulators have long pushed for a strong fourth entrant in the country’s wireless industry to challenge the dominance of Bell, Telus and Rogers.

Pierre Karl Peladeau, CEO of Quebecor, the parent company of Montreal-based Videotron, intends to fill that role, which he believes would bring major savings to future customers across Western Canada.

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Videotron spent $830 million during the summer buying suitable radio spectrum in a government-backed auction geared toward smaller players in the marketplace. The decision to spend the cash was taken to pave the way for a launch of wireless service across much of the West, including Alberta.

Peladeau said his company plans to build out its own network over the next seven years, saying it will not only increase competition with a corresponding reduction in pricing but also provide engineering, retail and marketing jobs in these new locations.

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In the meantime, Videotron expects to piggyback on existing wireless infrastructure, something the CRTC regulatory body now requires the large, established companies to allow, therefore providing new entrants to the market reasonable and timely fair access.

Telus recently sought an injunction in Federal Court to suspend Videotron’s purchase of the radio spectrum, arguing it wasn’t eligible to participate in the auction.

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However, last week a judge dismissed the move. “The decisive factor is the public interest in fostering greater competition in the market for mobile phone services,” the ruling said.

That decision came as a relief to Peladeau, describing the move by Telus as “quite aggressive.”

“Telus suing the government, saying, ‘You didn’t have the right to issue the licence,’ this is a first. But the judge understood very well what was the real motive in doing this.

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“Making sure we will get a fourth operator and a more competitive environment will be the only way that is available to create competition and lower prices,” he said.

When Alberta-based Shaw Communications first entered the mobile marketplace many consumers hoped it would become that strong fourth player that resulted in increased competition and lower prices.

However, in March, Rogers launched a $26-billion takeover bid for Shaw that is still progressing, although an ongoing internal family feud at Rogers is muddying the waters.

Peladeau pledged Videotron would not follow a similar path by agreeing to a future takeover from a competitor.

“Maybe the dynamic of the (Shaw) family is different. I’m able to talk for today and the years to come. I’m not looking to sell my company — we want to grow because I see some considerable opportunity.

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“We are in this for the long haul.”

Industry analysts have speculated that if the Rogers deal is finalized then Shaw’s Freedom Mobile brand would have to be jettisoned to comply with federal competition rules. If that happens, Videotron would be keenly interested in acquiring it, said Peladeau.

“We made public our interest to buy Freedom. Because of the family feud it isn’t easy to understand where this will go, but they know very well our interest — we have made that loud and clear.

“We can build upon Freedom because it is known and we can build upon improving that capacity.”

Peladeau would not say at what price point Videotron would enter the marketplace but points to the lower costs of mobile plans offered in Quebec compared to Alberta — some recent unlimited data packages offered by competitors are 20 per cent cheaper in Montreal compared to the same offering in Calgary and Edmonton.

He added Videotron is used to being the disrupter in the market, having done exactly that over the past 15 years in Quebec against the same competition now faced in Western Canada.

“We are not a brand-new wireless operator. We know what this business is all about and we know the Canadian landscape. We are also well known within the financial markets, because all this needs the capacity to raise money.”

“All the ingredients for a very successful recipe are there and we will move forward as quick as possible,” said Peladeau.

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