Videotron reportedly signs NDA with Mobilicity, may be expanding outside Quebec

Ian Hardy

January 14, 2014 2:25 pm

Quebecor spent $554.4 million in the 2008 AWS spectrum auction to scoop up frequencies in Ontario and Quebec. Videotron, its arm that promotes wireless, home phone, internet and cable services, is very popular in Quebec and has transformed the province into a hotbed of competition.

The latest stat from Q3 results has Videotron amassing over 478,000 wireless subscribers — ranking them as the sixth largest player in Canada. The company has made strategic bets, specifically in its TV offerings, that have gained the loyalty of its customers.

Surely the company wants to grow its market and according to a recent note to his clients, Scotia Capital’s Jeff Fan says there might be a “potential twist” brewing in the Canadian wireless scene. Fan believes that Quebecor/Videotron have signed an NDA with Mobilicity to possibly purchase their assets, which “indicates it has some interest in licenses outside Quebec.”

Mobilicity operates in Toronto, Ottawa, Calgary, Edmonton and Vancouver, but is currently under creditor protection and auctioning off their spectrum and subscriber base. The struggling carrier has approximately 175,000 wireless subscribers and only enough money in the bank to last until mid-February.

Fan noted that Quebecor “may leverage the licenses to gain a more favorable network sharing deal with RCI (in Quebec) or become a solution to the government’s 4th operator objective in BC, AB and ON with a network sharing arrangement with Wind/Mobilicity that may also include an incumbent like Rogers.”

If true, it’s certainly an interesting play as Videotron could very well end up being Canada’s fourth national carrier. Videotron is also bidding in the desired 700 MHz spectrum auction that started today. WIND Mobile has reportedly made a $190 million bid to acquire Mobilicity.

  • Allwayswrite

    Wow, this caught me by surprise….can’t say I hate it.

    • jackjiarocks

      If Videotron is coming to Ontario and offer a reasonable BYOD unlimited plan at around 50-60, I would be more than happy to move over from wind in a heart beat.

    • Bri

      But wouldn’t the service quality (signal strength & coverage in Toronto) be similar to what Mobilicity is currently providing? Call me spoiled but I wouldn’t pay 50-60 for that quality service.

    • jackjiarocks

      That is with LTE, ofcourse

    • Bri

      I’m just not getting how they can have LTE service ready when they’ll only be taking over mobilicity’s spectrum in Ontario..

    • deltatux

      Here’s the thing, Mobilicity never got the chance to fully roll out their network, they could have expanded further if they hadn’t run out of money so soon. So if Videotron picks up their assets, they can further expand. Mobilicity’s original game plan was to expand their coverage area, but had to go plan B and stick to the core networks instead.

    • 0defaced

      that’s complete bullsh*t.

    • Mayoo

      FYI: I asked Videotron if they have a BYOD policy and they don’t. But the customer support person took the initiative of passing the suggestion in the official list and even added “because I think it’s a great idea”.

      I wouldn’t be surprised to see this soon.

    • jackjiarocks

      That is the difference of service right here between this and the shitty three.

    • Sweet

      I always got great customer service from Videotron during the many years that I was with them for TV and Internet service.

    • Simbob

      Videotron, like the big 3′s, focus all it’s marketing in bundling services (TV, Internet, home phone and cell). Prices always depend on your service bundle. If they expand in Ontario, where they don’t have any cable infrastructure, they might change that policy and introduce BYOD.

    • ScooterinAB

      Ya, this is pretty random.

      We should all keep in mind thought that this is an awful lot of speculation and ifs. I doubt the wishlisting that VIdeotron will have roaming agreements with Wind and Rogers off the hop.

      It could also be speculated that Videotron could try to secure their own spectrum, and that this could have absolutely nothing to do with Mobilicity, or that they could even just be referring to their new plan.

      Tough to say, but a cute rumor in the mean time.

  • Ceribaen

    I’ve always wondered what the roadblocks would be between the various regional carriers to enter into a ‘peering’ agreement (ie SaskTel, the one in Thunder Bay, Wind, Mobilicity, Videotron, etc) where they share towers with each other to try to create a 4th ‘national’ carrier through teamwork. It’s not like they’d end up cutting into each other’s subscriber bases, but could help increase their overall coverages and maybe increase that way.

    Have never really looked into what frequencies each of them use though, which could be the biggest stumbling block if incompatible hardware.

    • danbob999

      The problem is price. Some regional carriers have coverage (Sasktel, Manitoba, Videotron) and some don’t (wind, mobilicity).

      If a Mobilicity customer paying $30/month for everything unlimited can roam for free on videotron and sasktel, why would he subscribe to a real carrier?

  • Samuel Gomez Recuero

    About time for videotron bring their game on for the Big 3

  • TP

    might be actually a good opportunity to bring up some competition if Videotron expands outside of Quebec and acquire 700MHz. I liked Mobilicity and I believed in Wind, but they ended up not being very successful.

    • MrMastodonFarm

      With Wind not participating in the auction it certainly opens the door for Videotorn to scoop up plenty of Spectrum. With Telus/Bell/Rogers only being limited to two blocks between the three of them and Wind out… it’s all systems go for a company that wants to step up.

    • Accophox

      T/B/R are allowed 1 block each. Rules are different compared to the AWS spectrum auction.

    • CluelessCompanion

      To be fair, they will for sure get Southern Ontario and another key block. Other carriers will be limited to a slow expansion elsewhere, with a much smaller customer base they could have gotten, if had gotten S.Ontario.

  • D Kup

    This is certainly good news after the major downer yesterday that Wind dropped out of today’s spectrum auction!

    Small players like Wind, Mobi and regional players need to unite together to fight the big three. There are plenty of proofs that none of them can do very well on their own. Even Videotron thus far is still a Quebec only story.

    The APRU number for Wind and along the other new players needs to be in the high 30s or low 40s area to fight against the evil big three. I for once don’t mind Wind upping their prices a bit.

  • MrMastodonFarm

    These companies need to work together and share their towers. The sooner the better, should have happened yesterday.

    • JTon

      But… but… there wouldn’t be nearly as many towers in place today if companies shared their towers. Not sharing forces them to compete

  • Francois Roy

    No doubt Rogers Telus and Bell would prefer a fourth but quiet player that would share the same pricing structure than let them continue bring the prices down in Quebec..

  • fruvous

    How much can we trust Jeff Fan? This is the analyst who said that Canadian carrier rates were lower than American carriers.

    • Mikie

      Uhm.. Verizon .. All you can Talk Nationwide and 1GB = 90$ how is that cheaper than Canada?

    • Joseph

      Bring your own device and knock off 40 a month….that makes it 50 which is still about 15 bucks cheaper then Rogers, Telus, and Bell….so your very uneducated considering the big 3 only take off 20 a month if your BYOD.

    • Adam

      Unlimited national voice and 1GB? Rogers charges $40.50 for that (in Quebec on Fido with BYOD discount). Quite a bit cheaper than Verizon. Even if you’re not in Quebec, it’s $53.10, which is most definitely not $15 more than $50.

    • MaX Damage

      Same thing with KOODO in Quebec, you can also get 3GB of data for 50$ after BYOD discount.

    • Joseph

      That is in Quebec in Alberta it is 85 for that same plan and 65 with BYOB so not quite a bit cheaper….all depends on what part of the country you live in, that’s what it comes down to.

    • fruvous

      AT&T unlimited nationwide and 2GB = $55
      Tmobile unlimited nationwide and 2.5GB = $60
      Virgin USA unlimited nationwide and unlimited data = $55
      ====
      Rogers unlimited nationwide and 1GB(+1GB bonus) = $85
      Bell unlimited nationwide and 1GB = $75
      Telus unlimited nationwide and 1GB(+1GB bonus) = $85

    • accord1999

      Actually the correct US prices are:

      AT&T unlimited nationwide and 2GB = $95 ($55 for data, $40 for voice line)

      Tmobile unlimited nationwide and 2.5GB = $60 + $20-$25/month for phone subsidy

      Virgin USA = discount MVNO on the worst national network in North America

    • Joseph

      Yes your correct you pay more like I said but if you bring your own phone or buy it out right then it is cheaper then the big three…..

  • Sweet

    In 2008, Videotron purchased spectrum in Toronto and eastern Ontario. So, on one hand, I’m not surprised that they’re looking into expanding outside Quebec. But I figured they would stick to Quebec and Ontario and not expand to BC and Alberta.

  • Mikie

    I’d make a switch in a heartbeat for their 6GB regular offerings I see of theirs!

  • Wild

    Nope I am not buying this speculation and a smooth transfer or any guarantee of service is not a given. I’m dropping mobilicity and I’m not taking any chances with my service I already noticed an increase in dropped calls and there is no honesty between the company and it’s subscribers, not a word and we have to read the speculations outside the company so it’s time to say goodbye.

    • bmccull

      In fairness to Mobilicity, it would be foolish of them to give you some guarantee when they themselves do not know the future.

    • Wild

      Fairness? How about openness and honesty? No one has asked for a guarantee. Yet again how fair is it to run a promo sale without telling your new customers… by the way we are bankrupt and are trying to sell your subscription.

  • Who Needs Facts

    If things were not weird enough in the run up to the auction, this puts it almost over the edge.

    All it will take now to give it a nudge is John Bitove, armed with a bunch of spectrum to return to front and centre as a principal behind a new or re-orged company I hear Wind is looking for spectrum.

    Why not. It is the Canadian Wireless Industry we are talking about

  • Who Needs Facts

    I can see Quebecor going after Mobilicity. Spectrum transferred is under way less restriction than spectrum purchased and because of the government restrictions on transfer, they can get it for almost nothing.

    But – unless there is a bigger deal in the works with someone infusing a whole lot of money into them, even with with all the regulations in the world being tilted in their favour, they do not have the money to become a national carrier.

    What is their market cap? $5 Billion tops? Roger paid more than that to broadcast hockey games.

    • Adam

      Quebecor market cap? $3.2 billion. But market cap is meaningless: Quebecor has roughly $10 billion a year in revenue, versus roughly $12 billion for Rogers. They’re roughly the same size.

    • Who Needs Facts

      Not too sure I agree with market cap being meaningless or the revenue numbers you quote.

      However. As Quebecor is bankrolled by Caisse de dépôt et placement du Québec they would seem to have a way to come up with the money needed ($4-5 Billion was bantered around for Verizon).

      I wonder how Quebecors feel about their pension dollars being invested in, gasp, Canada?

  • The Invisible Hand

    NDA = Network ________ Agreement?

    • Rob Josey

      Non-Disclosure Agreement.

    • The Invisible Hand

      Yes, I know NDA can stand for that, but that doesn’t really make sense in this context.

    • Rob Josey

      Makes complete sense so that nobody from the company can talk about the negotiations.

    • The Invisible Hand

      Then it’s not working very well. :)

    • Kusanagi

      It’s always like that when you’re negotiating terms.
      It’s confidential, I mean, what they are talking about, not the fact that they are negotiating. :)

  • Ritchie

    Vancouver is waiting for you, Videotron!

    • bmccull

      How about this scenario: Videotron acquires the Toronto and Ottawa operations of Mobilicity and Eastlink takes Vancouver (where they operate a cable system in Delta)?

    • Ritchie

      I looked at their website….doesn’t seems they have cell phone plans. I am more interested in Cell Phone service. Only base of the website, I believe Videotron seems like a bigger company. Videotron’s unlimited data plan is $80, compare with Bell which I am using now $70 for 500MB. But actually I am not sure how good their signal is, I expect it is better than Wind and Mobilicity. If Eastlink got a good signal on cell phone, why not?

  • Steve

    Well this is an interesting development. Can’t say I saw it coming… at all

  • Shaggyskunk

    I’ve got Unlimited Canada Wide Talk & Text – with 6 Gig of Data for $95 per month – Is it expensive – Yup
    Bring on the competition…. Any competition.

    • Ritchie

      Actually there is only small group amount of people really needed 6GB of Data. Since my home and my store need internet anyways, most of my time I am using wifi now. If your work place is using Shaw or Telus, ask your boss to setup the Shaw Open or Telus Open for reduce employee’s cell phone cost. It is free to set it up anyways. Because of the signal problem, I just port my # from Mobilicity to Bell 2 weeks ago, and I use it everyday, but my data usage within 100MB. I used to 1.5 GB monthly in average, sometimes 2GB. I know it is much more expensive than Mobilicity, but no competition here.

  • TrOuBLeDbOy

    what does all this mean to me im a mobilicity subscriber ?