By Ahmad Hathout
Quebecor executives said Thursday that they’ve been okay with forgoing revenue in a strategy to capture customers, which includes lower prices and competitive international roaming packages on the road toward bundled home internet with its newly acquired Freedom brand.
Freedom last year introduced a $50 “unlimited” talk and text plan with 40 GB of LTE data that can be used across Canada and the United States. It later launched a $65 global roaming plan that covers 73 destinations.
Hugues Simard, Quebecor chief financial officer, acknowledged the loss of revenue there but said the benefit has been “significant momentum in gaining customers.”
“You can play on price,” he said about strategies to gain subscribers, “but you need to find other levers, and that was a pretty good one which resonated with customers, so yea, a bit of giving up a little bit of revenue but we still think it was a good decision.”
The company announced a mobile wireless monthly average revenue per user (ARPU) of $36 in the fourth quarter, which is lower than competitors. When asked about its sustainability, Quebecor’s President and CEO Pierre Karl Peladeau said it’s part of its culture of bringing customers in the door first and then providing compelling offers to keep them in.
“This is a moving target — we cannot [have] this ARPU forever, but this moving target will be our capacity to deliver a multi-service, to offer more aggressive bundles,” Peladeau said.
He added that, with the acquisition of wholesale internet service provider VMedia, the company has the know-how and capability to, at some point, bundle Freedom wireless with home internet.
“On the technology side, we have what is appropriate to move forward,” Peladeau said about the strategy.
The talk of bundling strategies has been ramping up in the aftermath of Rogers’s acquisition of Shaw last April.
Telus has been actively talking about and moving on that strategy. Its flanker brand Koodo announced earlier this month a bundle of mobile wireless, home internet and video streaming services for $99 per month in Manitoba, Ontario and Quebec.
Prior to that launch, executives from the Vancouver-based telecom discussed on its fourth-quarter conference call the importance of the bundle to keep customers in, which included discussion about its bundling of the latest Stream+ streaming service package.
Telus is now under pressure in the face of the behemoth Rogers and Quebecor entering its home territory in the west.
For the three months that ended on December 31, Quebecor saw telecommunications revenues jump to $1.3 billion, a 35.2 per cent increase over the same period last year, thanks to the closing of its acquisition of Freedom.
The company added 66,100 mobile phone subscribers, an increase over the 13,100 it added in the same period last year; added 6,300 internet subscribers over the 4,700 it added last year; and lost 6,900 subscribers television subscribers compared to the 6,000 it lost over the same period.
The mobile phone base ballooned at year end to 3.77 million, the internet base increased to 1.73 million, but the television and landline bases declined to 1.35 million (from nearly 1.4 million) and 674,000 (from 751,000), respectively.
Media revenues were down to $205 million compared to the $215 million it added in the equivalent period, but sports and entertainment was up to $56.4 million in the quarter (versus $54 million last year).
Total revenues were up $1.5 billion in the quarter, up 27 per cent over the same period last year, while net income was down slightly to $141 million compared to the $142.5 million it added over the same period.
Screenshot of Quebecor President and CEO Pierre Karl Peladeau.
