Quebecor Inc.'s highly profitable telecom division, Vidéotron Ltee., will launch its planned wireless cellphone network later this week, the company said on Tuesday, a move that will help redraw the Canadian telecommunications landscape.
Vidéotron, which has been a thorn in BCE Inc.'s side in Quebec for years, will flick on the network this Thursday, pitching cellphones and smart phones mainly to the cable company's existing base of home phone, cable TV and Internet subscribers. Many are bullish on the company's move, which threatens to shake apart the wireless market share of incumbents in Quebec.
In interviews, Quebecor's and Vidéotron's executives have said they will fight the upcoming battle against Bell Canada and Rogers Communications Inc., both of which have a significant share of the wireless market in Quebec, on both price and customer service.
But many analysts are expecting deep discounts on the wireless side - which may dip the price of monthly bills below other new wireless entrants, such as Public Mobile - if Vidéotron customers take a cellphone in a "bundle" of other telecom services. When Vidéotron launched digital home phone service back in 2005, its prices were as much as 60 per cent lower than Bell's when customers took the service in addition to others.
In a note to clients this morning, Canaccord Genuity telecom analyst Dvai Ghose writes that he expects Vidéotron's wireless prices to be as much as 30 to 40 per cent less than established wireless providers in a bundle, and be in line with the other carriers when the service is taken by itself.
Many believe that Vidéotron will launch with unlimited talk-and-text plans, but Mr. Ghose writes that the Montreal-based cableco will probably avoid unlimited wireless data pricing for smart phones. The company, he said, may also discount its home phone product for wireless customers - likely to avoid a household "cutting the cord" on fixed line phone service and going completely wireless.
The Vidéotron wireless launch, which comes after previous delays that the company's executives said were to ensure bad wireless service didn't scare away its existing customers, will be the first major cable company to launch its own wireless network since the predecessor to Rogers Wireless did so in 1985.
The launch will help reshape how telecom services are delivered in this country, as cable companies such as Shaw Communications Inc. and EastLink Communications Inc. branch from TV and Internet services into wireless service; and traditional phone companies, which have ruled wireless for decades, push further into TV services with Internet protocol TV (IPTV) service delivered through companies' Internet pipes.
This could result in a renewed and vicious battle to "own the home," and be the sole telecom provider to as many households as possible - ensuring a more stable, and lucrative, customer base on which to pitch additional services, such as home security, and, perhaps, price increases.