A man enters the store at the new rebranded signage of Freedom Mobile, in Toronto on Thursday, November 24, 2016. Carelton University professor Dwayne Winseck says it won’t be easy for Videotron Ltd., which has only operated in Quebec and parts of eastern Ontario bordering Quebec, to expand nationally making it less of challenger for Rogers. THE CANADIAN PRESS/Nathan Denette
Rogers Communications Inc.’s decision to sell Shaw’s wireless carrier Freedom Mobile to Quebecor Inc.-owned Videotron Ltd. will just create a “weaker” competitor in the market, one telecom watcher said Monday.
Carleton University professor Dwayne Winseck saidit won’t be easy for Quebec-based Videotron to expand nationally, making it less of a challenger for Rogers.
Winseck said Videotron, which only operates in Quebec and parts of eastern Ontario, has had national ambitions for a while, but lacks brand recognition and hasn’t been able to strike strong deals with other national carriers, despite having fairly deep pockets.
Over the weekend, Rogers said it would sell Freedom to Quebecor for $2.85 billion, as it looks to get its $26 billion takeover of Shaw Communications Inc. over the finish line, arguing that the move would give Canadians “competition and choice.”
The deal will see Quebecor buy all of Freedom’s branded wireless and internet customers, as well as its infrastructure, spectrum and retail locations.
Winseck, whose expertise is media and communications, points to Shaw’s strong presence in Western Canada and the fact that its wireless service, Shaw Mobile, won’t be divested as part of the merger as another reason why it likely won’t be an easy go for Videotron as it tries to expand across Canada.
The Competition Bureau has been seeking to block the merger over concerns it would substantially lessen wireless competition, and the sale of Freedom was widely expected to be a condition of regulatory approval.
In new submissions made to Competition Tribunal on Friday, the regulatory agency expanded its opposition to the proposed takeover, challenging the telecom giant’s claims about efficiencies and economic benefits, while arguing that consumers will be faced with higher prices.
Rogers, Shaw and Quebecor said their agreement would effectively address competitive concerns and keep alive a “strong and sustainable” fourth wireless carrier in Canada.
“I don’t think it’s going to go far enough for the Competition Bureau,” Winseck said.
However, some analysts think the sale will move the deal forward and quell the bureau’s competition concerns.
“We believe this agreement increases the prospect of the transaction closing to over 95 per cent,” Canaccord Genuity analyst Aravinda Galappatthige wrote in a note to clients.
“We believe (Quebecor’s) strong operational track record, balance sheet, expertise and asset mix will make it more difficult for the regulator to argue that the Canadian wireless competitive landscape will be materially affected by the (Rogers-Shaw) merger,” said Desjardins analyst Jerome Dubreuil in a note to clients.
Quebecor was not the only contender in the mix leading up to this decision.
Globalive Capital’s Anthony Lacavera had been very vocal about his firm’s interest in buying Freedom, formerly Wind Mobile, which he founded in 2008. Halifax-based telecom company, Eastlink, and Xplornet Communications Inc., a New Brunswick-based rural internet provider, were also said to be interested in Freedom.
Winseck doesn’t believe there is another buyer that would create a strong enough fourth competitor.
“To me, the only viable alternative would be for somebody to come in that isn’t one of the existing players to take over Shaw lock, stock and barrel,” he said.
So far, the Rogers-Shaw transaction has received approval from the Canadian Radio-television and Telecommunications Commission. It still requires approval by the Competition Bureau and Innovation, Science and Economic Development Canada.
Competition Tribunal hearings on the matter are scheduled to begin the week of Nov. 7.
Rogers and Shaw shares were among the leading companies in trading on the Toronto Stock Exchange, gaining 6.4 and 8.3 per cent respectively.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
