Videotron is one of the most popular carriers in Quebec. Over the years, they have earned a positive reputation for offering some of the best mobile plans in Quebec. In addition, they provide internet and home phone services throughout the province. Of course, its services have always been exclusive to Quebec, and a few regions bordering Ontario. However, the company is hoping to change this in the distant future. They recently announced that they are planning to expand their services to British Columbia, Manitoba and Alberta. With this move, the company hopes to become the fourth huge national carrier, joining the ranks of Bell, Telus and Rogers. What does Videotron expanding to the rest of Canada mean for the future industry? And how will it impact the current market? Throughout this article, we will discuss the possible results and outcomes that are likely to take place following Videotron’s growth.
Summer Auction
You may be wondering, what caused Videotron to begin offering their services in Western Canada? Well, they previously lacked the jurisdiction and technology to do so. However, the federal government’s Summer auction allowed Videotron to purchase 3,500MHz radio spectrum. With this purchase, the company is capable of expanding their services to more regions, hence their recent announcement. However, Videotron’s purchase did not come easily.
Following the acquisition, other major telecom companies have been trying to stop Videotron from achieving their goal. Telus attempted to block Quebecor (the company that owns Videotron) from using its radio spectrum in Western Canada. Of course, the Federal Courts denied Telus’ claim, and Videotron announced their expansion plans a day later. Still, both Bell and Telus are trying to stop Videotron at all costs. They are currently planning to take Quebecor to court. They feel that Videotron should not have been able to purchase the radio spectrum in the first place, since they have never offered services in Western Canada before. So, why are these major companies going to such lengths to prevent Videotron from expanding?
Videotron – The Fourth Giant?
For decades, Bell, Telus and Rogers have dominated the telecom market in Canada. From home phone services, to mobile plans and internet, these three companies have been the primary suppliers. With the largest network coverages, they are also the only providers available nationwide. Although the CRTC has introduced measures to increase competition among Canadian providers, no company has been able to come close to the big three. With this recent announcement, Videotron could be attempting to reach nationwide status. In doing so, they could become the fourth major telecom provider. Although having four major companies rather than three doesn’t seem like a huge increase in competition, it could be huge for the industry. By achieving national status, the rest of the country will realize that the big three are not untouchable, and try to expand their services as well. Other big companies like Shaw and Eastlink could easily try to expand and start offering their services across the country.
Naturally, major companies like Bell and Telus are upset due to the possibility of another company joining their ranks. By introducing another major provider, prices could drop, and consumers would be more divided. Even though prices could lower by 15 or even 30 percent, the other major providers will try to block Videotron expanding at all costs. From their perspective, the introduction of a fourth national carrier means that countless customers will leave them behind and seek out the new option.
Videotron’s Options
So, what are the potential outcomes for Videotron’s current situation? Well, if things go according to their plan, they will successfully end up selling their telecom services in Western provinces. From there, they will continue to expand to central and Eastern Canada, until their services are available everywhere in Canada. Over the course of a few years, other province-exclusive providers could follow suit and climb the ranks just like Videotron. Overall, this scenario seems quite plausible, especially when considering Videotron’s recent effort to bring high-speed internet to rural Quebec.
Alternatively, if Videotron ends up getting blocked by Canada’s big three, they can still benefit from the auction. In the past, Videotron has sold their purchased spectrum following the federal auction. Since they previously never planned on expanding, they often ended up purchasing radio spectrum they did not intend on using, and sold it back at a higher price. However, Videotron’s CEO Pierre Karl Péladeau confirmed in an interview that Quebecor purchased the Western spectrum to expand their business, not turn a quick profit. So, it’s only likely that they will end up selling if they end up getting blocked or repeatedly delayed by their competition.
Conclusion
Overall, this recent headline should have Canadians excited and intrigued. The possibility of Videotron expanding to Western Canada may seem insignificant, but it could mark the beginning of an exciting new market that is capable of change, instead of remaining static. Although it may take a few years, Videotron expanding to Western Canada is also exciting for Quebec residents to witness. Of course, it could also result in lower mobility and internet rates, which is a major positive for the entire country. Either way, make sure to keep your eyes out for this evolving story, we will make sure to keep our readers updated as it develops.
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