CEO calls CRTC decision restricting those qualifying under MVNO framework “unfortunate”
MONTREAL – Cogeco announced its fourth quarter 2022 financial results last night, showing revenue was up 14% year-over-year, while earlier today, on an investor’s call, its president and CEO Philippe Jetté outlined the company’s next steps towards launching wireless.
Financial results
In terms of its Q4 2022 financial results, Cogeco reported revenue of $746.9 million. The company also reported adjusted EBITDA increased 18.7% to $348.5 million.
Cogeco’s Canadian telecommunications revenue alone increased 1.1% and adjusted EBITDA increased 6.4% year-over-year, “mainly resulting from lower marketing expenses and certain year-end adjustments,” a press release says.
Cogeco’s media activities revenue meanwhile decreased by 4.1%. A press release announcing the company’s financial results indicates “the radio advertising market continued to be impacted by supply chain disruptions limiting other customers’ businesses.”
“We are pleased with Cogeco’s overall performance which is in line with our financial projections for fiscal 2022, despite the current challenging economic environment,” said Jetté, in the release.
“Our Canadian telecommunications business unit, Cogeco Connexion, performed well during the quarter,” he said.
“The quarter saw continued organic growth of our Internet service customer base as well as the implementation of several of our network expansion projects, mainly in Québec, and the announcement of new projects that will connect more than 13,800 homes and businesses as part of the Government of Ontario’s Accelerated High Speed Internet Program.”
MVNO
The Cogeco CEO also commented on the CRTC’s recent decision on the tariffs filed by Bell, Telus, Rogers and SaskTel with the terms and conditions related to the Commission’s decision to implement a framework for regulated Mobile Virtual Network Operators (MVNOs).
The decision “is a positive step,” he said in the release.
“The CRTC has denied many unreasonable terms and conditions proposed by incumbents which would have rendered the MVNO regulatory regime ineffective. The CRTC has also determined that eligibility for the MVNO access service is contingent on being a commercial mobile wireless operator somewhere in Canada and this new requirement will need to be factored into our planning, as Cogeco has not yet launched a mobile wireless operation.”
On the conference call with investors today, Jetté explained they are looking for a “capital-light” model to enter the wireless space. “It’s unfortunate that the CRTC had to insert a new eligibility factor in the mix,” he said.
“We are going to understand exactly what they mean by being operating somewhere in Canada,” he added. “It’s kind of a loose definition, but I’m expecting pretty soon we will have more clarity on what they meant there.”
Cogeco has been planning its expansion into wireless for two years and now needs clarity on the framework before launching. “We’re going to be working with the CRTC and … with ISED to clarify that very soon,” Jetté said.
“We do have a team that is dedicated to wireless with strong wireless expertise and… the whole senior leadership team at Cogeco is versed in mobile as we all have mobility somewhere on our CVs.”
The next step for them is to start negotiating rates for access to a mobile network operator’s network. “And then we will have all the variables to decide if we can launch a profitable business or not,” Jetté said.
Asked if Cogeco is only made intellectual investments in launching wireless so far, Jetté said “we have labs, and we’re playing with the real stuff as well. So, it’s not just conceptual, we are testing many, many things.”
