Quebecor CEO says Freedom Mobile acquisition will help lower prices

“Videotron needs to grow outside of Quebec if it wants to continue to offer lower prices.”

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Wireless prices were much lower in Quebec than the rest of Canada before a fourth operator, Quebecor Inc. CEO Pierre Karl Péladeau announced that a panel was convened to determine the fate of the $26-billion merger of Rogers Communications Inc. and Shaw Communi- cations Inc.

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Péladeau, who is also chief executive of the Quebecor vidéotron subsidiary, said Monday the company “sees a business opportunity” to get its foot in the western Canadian market with the announced Rogers-Shaw merger, something he wrote in his testimony.

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“Videotron needs to grow outside of Quebec if it wants to continue to offer lower prices,” Péladeau said.

Vidéotron is in the process of acquiring Shaw’s mobile franchise for $2.85 billion, a move that Rogers hopes will quell concerns about reduced competition from Shaw’s purchase. Péladeau said his company was initially opposed to the first iteration of the Rogers and Shaw merger in 2021.

“One of the implications of the Commissioner’s (Competition) case in the last two weeks is that Vidéotron probably cannot help despite its best intentions,” said John Rook, Vidéotron’s lawyer.

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But Péladeau said Vidéotron could offer lower prices if it can grow outside of Quebec, and that it would otherwise be unable to buy 1.7 million customers if it closes the purchase of the Mobile franchise.

In an October statement, which was also shown at the hearing, Péladeau said his company is working “to end the reign of the ‘Big 3′” – telco giants Rogers, BCE Inc. and Telus Corp. – by promoting competition and delivering better prices outside of Quebec.

While capturing the wireless segment of the Quebec market with a smaller former, Péladeau has been vocal about his company’s plans to compete against the rest of the country.

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“We will always grow in the rest of Canada,” Péladeau said Monday, but declined to answer Competition Bureau lawyer Antoine Lippé’s question about whether the company acquired 700MHz with that intention in bidding for Wind Mobile, the former franchise, in 2014.

The company has spent $830 million to acquire western spectrum in Canada in a government auction in 2021, a move that has been challenged by wireless competitor Telus Corp. Challenged in May, a federal court judge rejected Telus’ arguments that Quebecor was not a buyer of the 3,500. MHz spectrum that was put up for auction.

Quebecor and its subsidiary Vidéotron were initially released from talks with Rogers and Shaw in the spring to find a way to satisfy concerns about the wireless network, when it was reported that the authors were not comfortable with their initial merger structure.

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Some observers suggested that the dispute between Quebecor and Rogers stemming from an improper arrangement to jointly build a cellular network in Quebec and the National Capital Region was to blame for Quebecor’s initial flight, while others said that Rogers was trying to sell some wireless operations. to say the least, a irascible competitor.

Videotron’s senior vice-president and chief technology officer, Mohamed Drif, testified before a three-member tribunal on Monday, while the vice-president of finance, Jean-Francois Lescadres, stood on Friday. Lescadres told the court that the wireless operator jumped at the chance to buy Shaw Mobile together with Freedom Mobile.

With additional reporting from Barbara Shecter

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