Skip to main content

With two recent purchases of spectrum, cable and internet provider Cogeco Communications Inc. is signalling wireless ambitions.

The Montreal-based cable company, which operates mainly in suburban and semi-rural parts of Ontario and Quebec, has been bulking up on the radio waves used to carry LTE (long-term evolution or 4G) cellular signals. In May, it spent $24.3-million to win 23 licences in a government sale for spectrum that was not purchased in previous auctions. And, late last month, it invested $8-million to purchase Kian Telecom, a small operator that owned 10 additional spectrum licences.

Cogeco has so far not built a wireless network of its own but in recent years it has been public about its desire to offer the popular service to its television and internet customers. The company has always said it would only invest in wireless if it could do so profitably, and building from scratch can be prohibitively expensive and end in failure or firesale.

Story continues below advertisement

That has led the company to lobby for regulatory rules that would allow it to resell wireless services bought at wholesale rates from the established national carriers Rogers Communications Inc., BCE Inc. and Telus Corp. (Such resellers are known as mobile virtual network operators or MVNOs.)

But neither the federal government nor the Canadian Radio-television and Telecommunications Commission has mandated such a model, with the CRTC most recently rejecting the idea in March, instead sticking to a policy of encouraging operators to invest in their own towers, antennas and airwaves.

Cogeco still insists it will not pursue a financially ruinous wireless investment, but its recent spectrum purchases suggest it could be getting more aggressive about pursuing the opportunity with or without an MVNO regulatory framework.

“This is a positive first step in the exploration of our options in the mobile wireless market,” Cogeco’s chief technology and strategy officer Luc Noiseux said in a release after the first spectrum purchase. A month later, when the company announced the Kian deal, he went a bit further, saying: “This acquisition marks another step in a disciplined approach to providing wireless services to our customers.”

Amir Bigloo, president of Kian Telecom, who is joining the company as an adviser, added: “I look forward to assisting Cogeco in bringing more competition to Canada’s mobile wireless market.”

Canaccord Genuity analyst Aravinda Galappatthige wrote about the company’s recent spectrum acquisitions in a research report to clients, noting “the likelihood of Cogeco carving out a wireless opportunity for itself within its footprint, even without an outright regulatory MVNO mandate, emerges.”

He said he believes Cogeco management is considering “some form of a hybrid reseller/network sharing arrangement with an existing player,” suggesting Shaw Communications Inc.’s Freedom Mobile, which offers wireless service in B.C., Alberta and Ontario, could be a likely candidate.

Story continues below advertisement

Mr. Galappatthige, who noted that Freedom’s Ontario focus is mainly within the GTA and “metropolitan” areas, said there “is a theoretical fit” for the two companies to work together, with Cogeco reselling wireless service to customers in the non-metropolitan areas where it sells cable.

He said he does not envision a scenario where Cogeco becomes a “predominately facilities-based provider,” referencing an industry term for players that build their own networks. However, he added, “it seems clear that the company is exploring a viable economic model for a wireless service at this stage.”

Cogeco declined to comment for this story, citing a quiet period ahead of the company’s planned reporting of its third-quarter financial results on July 11.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter