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


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.

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