Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Vidéotron takes cautious approach on wireless Add to ...

TELECOM REPORTER

No one is more confident about Vidéotron Ltée's ability to launch successful wireless services than Robert Dépatie. But the president and chief executive officer of Quebecor Inc.'s telecom subsidiary is biding his time, aiming to build the best wireless network possible.

Competitors have already gone to market, but Mr. Dépatie, who has already pushed back his company's launch date to the summer, seems to be in no rush.

On a conference call yesterday, after Quebecor posted strong fourth-quarter results, Mr. Dépatie was asked about newcomer Wind Mobile's recent woes with its network and executive departures.

"Lessons taught us recently, from the new entrants - don't be too pressured to go to the market. Make sure that your network is well built, [and has]good coverage," he responded.

Vidéotron's cable TV, phone and Internet services are starting to show slower growth, which is why its next move is a crucial step to anchor Quebecor in wireless, the telecom industry's primary growth area.

Vidéotron aims to build its wireless services and pitch them to an already strong subscriber base. Because of its strong focus on consumer service, the company boasts extremely strong customer satisfaction levels: about 97 per cent overall, and 99 per cent for customers with three or more bundled services - "Almost perfection," as Mr. Dépatie put it.

But with much of the cable TV, Internet and home phone market already captured, growth may be a challenge, forcing the industry to look to segments with more robust prospects.

Despite strong year-end numbers, Quebecor's results reflect a trend: 61,000 new basic TV subscribers in 2009 compared with 78,000 a year earlier; 107,000 in Internet, versus 131,000 in 2008; and 35,000 cable telephone customers in 2009, down from 54,000 a year earlier.

Because of the largely industry-wide slowdown, analysts said the company's strategy will have to persuade current customers to buy additional services, such as wireless. That is why Vidéotron's gear-up to the launch this summer is so important. However, the company's broad reach and strong brand are both a blessing and a curse: Although it can pitch services to potential subscribers more easily than a startup wireless company, anything less than a flawless launch could taint Vidéotron's other businesses.

"Vidéotron is not like Wind Mobile," said Scotia Capital analyst Jeff Fan. "If Vidéotron's wireless doesn't work out well, there's going to be a potential knock-on effect on the other services."

***

Quebecor Inc.

Q4 / 2009 / 2008

Profit / $74-million / ($344-million)

EPS / $1.15 / ($5.34)

Revenue / $1.03-billion / $1-billion

Source: Company reports

Follow on Twitter: @iainmarlow

 

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories