(Adds details from conference call, share-price move)
By Alastair Sharp
TORONTO, July 31 Canadian telecom and media
conglomerate Quebecor Inc says it is closing in on a
decision on whether to buy up smaller competitors or team up
with a partner to expand its wireless operations outside its
home province of Quebec.
On the company's quarterly earnings call on Thursday,
executives said they are talking to several potential partners
about plans to become Canada's fourth national wireless player,
a move that would fulfill a key goal of the federal government's
"Critical to our vision is an urgent need for fair and
competitive, federally regulated roaming policy," Chief
Executive Pierre Dion told analysts on the call, stressing that
Ottawa must guarantee an affordable way for it to use its
Montreal-based Quebecor bought wireless airwaves across much
of Canada earlier this year but its services - cable TV,
Internet, landline and mobile telephony - are now mostly offered
Analysts say an expansion could lock up capital for years,
while the regulator's timetable for setting new wholesale
wireless rules may stretch past the next auction of wireless
Quebecor would only be able to fully participate in that
auction if it already held operating assets in each region.
The head of Quebecor's wireless and cable arm said the
company is now evaluating whether to purchase an existing
network or build out a national network, and that the decision
is expected in weeks or months.
Two struggling young wireless operators, Wind Mobile and
Mobilicity, are up for sale after each bought spectrum licenses
reserved for newcomers in a 2008 auction. Since then, Ottawa has
repeatedly blocked the two from falling into the hands of
Canada's three biggest phone companies: Telus Corp, BCE
Inc's Bell, and Rogers Communications.
WEAK WIRELESS METRICS
Quebecor posted a much smaller second-quarter net loss on
flat revenue on Thursday as cost-cutting in its media unit
offset weakness in its wireless and cable arm.
Quebecor Media Inc, in which the company holds a
75 percent stake, took a C$190 million ($174 million) charge
related to a transition to digital technology and to difficult
market conditions in the newspaper industry.
Its Videotron business added 29,700 net wireless
subscribers, but lost 3,600 net Internet connections and 17,100
cable-TV subscriptions in the quarter.
"Videotron subscriber results were weaker than expected, and
wireless in Quebec remains a challenge," Canaccord Genuity
analyst Dvai Ghose wrote.
Quebecor said income from continuing operations was C$66.0
million, or 54 Canadian cents a share. Revenue was up 0.6
percent at C$1.07 billion.
Analysts had expected Quebecor to earn 47 cents a share on
revenue of C$1.08 billion, according to Thomson Reuters I/B/E/S.
The company's net loss narrowed to C$74.8 million from
Shares in Quebecor were down 1.2 percent at C$26.12 at
midday on the Toronto Stock Exchange.
(Reporting by Alastair Sharp; Editing by Nick Zieminski, Lisa
Von Ahn and Peter Galloway)