Quebecor Inc. QBR-B-T is expanding its mobile wireless network in Manitoba, the latest target for the company's investment dollars as it works to grow its national mobile infrastructure.
The Montreal-based telecom and media company is planning the "imminent construction of Freedom Mobile's wireless network" in Manitoba, with the rollout set to begin in Winnipeg before expanding across the province.
Currently, Quebecor offers mobile wireless service across much of the country, both through its own facilities, mainly in major cities, as well as over rivals' networks using a regulated network-sharing framework intended to promote competition.
Under that framework, known as the mobile virtual network operator regime, regional competitors can access larger carriers' networks for seven years in areas where they own licences to spectrum, the airwaves used to transmit wireless signals.
The MVNO rates are crucial to Quebecor's planned national expansion, after its $2.85-billion acquisition of wireless carrier Freedom Mobile in 2023, which was divested as part of Rogers Communications Inc.'s RCI-B-T $20-billion takeover of Shaw Communications Inc.
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To date, Freedom Mobile has invested more than $35-million in Manitoba spectrum, the company said in a statement Monday.
This month, Quebecor reported its strongest quarterly wireless service revenue growth since the acquisition of Freedom Mobile, with 114,000 net additions despite an overall slower period for the sector, in part because of reduced immigration. Quebecor's telecom brands - Videotron, Freedom and Fizz - now have more than 4.3 million active mobile lines, according to the company.
Hugues Simard, Quebecor's chief financial officer, told analysts during the company's quarterly financial call that its strategy is not to "build and hope that people come," but to prioritize investments where the company's MVNO business is already doing well.
Chief executive officer Pierre Karl Péladeau added the company would continue to invest in its networks "on a disciplined basis."
But under the current framework, the company has limited time to do so before it will lose access to mandated rates.
The seven-year period - calculated from the date the tariffed terms and conditions were finalized - is intended to allow the regional carriers to generate revenue by selling services in new markets while they build out their own networks in those areas.
The Canadian Radio-television and Telecommunications Commission approved the tariffs, proposed by the incumbents, in May, 2023.
After the seven years pass, Quebecor could negotiate privately with incumbents, but without the arbitration power of the federal government, it might face higher costs.
However, industry experts have suggested that the CRTC's seven-year sunset may not be set in stone, in part because Innovation, Science and Economic Development Canada has long supported a four-carrier network, which Quebecor's national wholesale network currently rounds out.
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According to telecom consultant Mark Goldberg, there is precedent for the regulator letting sunset periods lapse.
"The CRTC has a history of saying that they would put in place sunsets on various wholesale arrangements," Mr. Goldberg said. "At the end of those periods, they have not, to my knowledge, ever said, 'Okay, we said it's going to end. Let's turn the lights out.'"
However, incumbents, who have strongly appealed wholesale access to their mobile networks, would likely take issue with an extension of mandated rates.
"It will be a very interesting regulator challenge, court challenge and, likely, political challenge," Mr. Goldberg said. "Will the CRTC actually go ahead with their deadline? That's a coin toss."