You can’t fight public interest, he warns
By Amanda OYE
MONTREAL – Pierre Karl Péladeau (above) wants everyone to know Videotron is ready to expand outside Quebec.
“We’re not a Monday morning quarterback – we’ve been there, we’ve done that and we’re ready to go,” said Péladeau in an interview with Cartt.ca.
Péladeau is president and CEO of Quebecor, Videotron’s parent company, and has also been president and CEO of Videotron since June.
Videotron got into mobile back in 2006 when it “started as an MVNO (mobile virtual network operator) on Rogers’s network,” he said.
“We, at that time, thought that we would need to move forward in the wireless business.” They were anticipating the company’s cable business would not continue to grow as it used to, he explained.
In 2008 the company acquired spectrum in an auction, which led to it setting up its own network in 2010.
More recently, Videotron acquired nearly $830 million in set-aside spectrum during the 3500 MHz auction. This includes spectrum licences in British Columbia, Alberta and Manitoba, which enables the company to expand outside of Quebec.
This is not the first time Videotron has been in this position.
“It’s true that we bought spectrum a few years ago in Toronto and the western part of the country,” Péladeau said. “Some people would say well… you had spectrum a few years ago and you sold it.” But this time is different, he said, because “the regulatory environment changed – not dramatically – but changed even more favorably for competition to take place.”
The CRTC’s recent MVNO decision helped created these more favourable conditions. The decision compels Bell, Telus, Rogers and Sasktel to provide MVNOs that meet certain criteria (including owning spectrum) with access to their networks for a limited time.
“This is why we participated in the recent auction, and this is why we’ve been successful acquiring over $830 million in spectrum,” Péladeau said. Because they have the spectrum, they have already operated as an MVNO, they have a marketing plan, call centres and a digital platform, he insists they are ready to get moving.
But it has not been so simple. Péladeau blames the incumbents for the delay.
The incumbents, he said, are “allergic to competition, they are allergic to an operator that will provide better pricing innovation and better customer service.”
“And we have been able to see it quite aggressively,” he said, going on to point out Bell and Telus have asked the Federal Court to review the government’s decision to award Videotron 3500 MHz spectrum licences in the west.
Last week a judge denied Telus’s request to compel ISED to temporarily withhold Videotron’s licences until a decision is made on its eligibility in the auction. The judge “said the decisive factor is the public interest in fostering greater competition in the market for mobile phone services,” Péladeau said.
Péladeau believes it is in the public interest for Canada’s western provinces to have another operator. “It’s more competitive in Quebec because of the fourth operator,” he said, noting that when Shaw initially took over what was Wind Mobile and rebranded it as Freedom, they were quite competitive.
He said the incumbents never introduced innovation, accusing them of being there “to squeeze their customers” and get as much money as they can from them.
Péladeau refers to a Competition Bureau submission to the CRTC from 2019 to help make his point. The submission says, where Bell, Telus and Rogers “face a wireless disruptor, prices are significantly lower.”
“Facilities-based regional competitors who operate their own wireless networks, such as Sasktel, Videotron and Freedom Mobile, are increasingly disrupting the Canadian wireless landscape. Prices are generally in the range of 35-40% lower in the parts of Canada where wireless disruptors have achieved a market share above 5.5%,” the submission reads.
Péladeau argues politicians, noticing prices were high, “probably too high”, also want to lower prices.
“I hope that… the incumbents will understand that they’re not going to be able to fight against public interests.”
Péladeau said Videotron has been asking the incumbents what their proposals are for it to consider their networks as it works towards starting new operations as an MVNO. In response, “they’re playing the delay game,” he said.
“They go through 25 pages of technical issues, sometimes problems that didn’t exist at all… they’re creating problems. Why? Because they don’t want to have competition.”
Another option for expansion Videotron is keeping its eyes on is the possibility of acquiring Freedom if Rogers does not receive approval to acquire it itself.
Péladeau points out, however, they do not know what will happen with the Rogers/Shaw deal.
The Rogers/Shaw deal still needs to be approved by the CRTC, the Competition Bureau and ISED. Then there is the “family feud now also creating, I would say probably more uncertainty,” he said. “It’s unfortunate to say it, but I guess that it’s probably quite obvious to say it.”
“So, should we wait, or should we go?”
Péladeau’s decision is to go, although he admits “that will depend on the will of the incumbents – will they change their mind or will they continue… [playing] the delay game.” He hopes at least one of the incumbents will “come to the table and negotiated a deal. That makes sense for both of us. It’s not impossible… should we expect this? I’m not sure because the big three are so anti-competitive.”
Péladeau is continuing to explore all possibilities. “If we were to only consider one, if it’s not working… I could be caught with nothing,” he said. He also did not rule out Videotron both acquiring Freedom and building its own network at the same time.
Videotron could still ultimately even sell its newly acquired spectrum. “We’ll never say never, but this is far from being our plan,” Péladeau said.
Photo provided by Quebecor. Credit: Émilie Nadeau.
