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Quebecor Inc. reported strong financial results but added fewer wireless customers than expected in the fourth quarter as it faced technical glitches and aggressive competition surrounding its launch of a discount brand.

The Montreal-based company said Wednesday that its telecom division Vidéotron attracted 33,100 new mobile subscribers in the past quarter, falling short of analyst estimates in the range of 35,000. That came amid the formal launch in November of Fizz, a less expensive wireless brand that offers customer support and sign ups online only.

But the company insists the sheen isn’t coming off its growing wireless business, which now commands almost one-fifth of the Quebec mobile market. Management said the stumbles with Fizz were owing to technical glitches and a strong response from national wireless carriers BCE Inc., Rogers Communications Inc. and Telus Corp.

“Obviously, the incumbents were prepared for a launch. So they were, I would say, very aggressive especially on promotions for the Black Friday season and … the Christmas period,” said Jean-François Pruneau, the company’s long-time chief financial officer, who was promoted to president and chief executive of the Vidéotron divisionin January.

He said marketing campaigns for Fizz are now back under way after the company resolved the technical issues and noted, “The success in Q1 is incredible, much higher than our expectations.”

Vidéotron also recorded a drop in average monthly billing per user (an industry metric known as ABPU), which was $53.25 in the quarter. That was down only slightly by 0.6 per cent from a year earlier, but it was the first quarterly drop in ABPU that the company’s growing wireless business has recorded since 2014, according to Canaccord Genuity’s Aravinda Galappatthige.

Mr. Pruneau said a trend toward customers bringing their own smartphones, rather than buying subsidized devices through the company, contributed to lower monthly revenues. But he also suggested that analysts should not fret over that figure, noting that with 8-per-cent growth in EBITDA at the division, “to me, it looks like the model is working well.” (EBITDA means earnings before interest, taxes, depreciation and amortization.)

Quebecor’s telecom business reported 2.9-per-cent revenue growth to $866-million while adjusted EBITDA increased to $426-million, up from $395-million the previous year.

At its cable business, Vidéotron lost 6,400 television subscribers, which was an improvement over a loss of 8,500 at the same time a year earlier. But it added just 7,000 new internet customers, fewer than the 12,400 it attracted in the last quarter of 2017. Vidéotron plans to launch an upgraded television platform later this year and is facing tough competition for residential customers from BCE, which is investing in faster, fibre-optic-to-the-home internet services.

“Quebecor reported [fourth-quarter] results this morning with strong financials and revenue/EBITDA nicely ahead of expectations,” Mr. Galappatthige said in a note to clients. “The negatives were lower internet [subscriber] adds and a decline in wireless ABPU.”

Last year, Quebecor paid $1.69-billion to buy out the remaining interest that the Caisse de dépôt et placement du Québec held in the company’s main subsidiary, Quebecor Media Inc.

Pierre Karl Péladeau, Quebecor’s controlling shareholder and CEO, pointed to that development as a major milestone in 2018. “With this share repurchase, we now have access to all the cash flows generated by Quebecor Media, giving us full control over our assets, our development and our future,” he said in a statement.

Quebecor’s overall revenue increased by 2.6 per cent to $1.09-billion in the fourth quarter, in line with analyst forecasts.

Net income attributable to shareholders surged to $116.8-million, or 46 cents a share, up from $70.4-million, or 29 cents a share in the last quarter of 2017. About $19-million of that increase came because Quebecor bought out the Caisse’s interest in the company, and the Quebecor profits that used to be designated in financial statements as the Caisse’s share of net income are now fully attributable to Quebecor’s common shareholders.

On an adjusted basis, Quebecor earned 52 cents a share, ahead of consensus forecasts of 46 cents. Consolidated adjusted EBITDA was up by 7.7 per cent at $450-million, beating analyst estimates of $440-million.

The company’s media operation, which includes a portfolio of magazines as well as the broadcasters TVA Network and TVA Sports, reported a drop in revenue, which fell to $198-million, down from $203-million a year earlier. But cost-cutting at the division contributed to a 23-per-cent increase in adjusted EBITDA to $27.5-million. ​

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