Quebecor has talked with Wind Mobile about wireless business, CEO says

MONTREAL – Quebecor Inc. (TSX:QBR.B) has held talks with Wind Mobile as the Montreal-based telecom and media company considers whether to expand its wireless business outside Quebec.

“They are fully aware of our interest in participating in the consolidation of the industry and as I’ve said, we’ll do that only if we think that the regulatory and investment conditions are right for us,” president and chief executive Dion said Thursday as Quebecor reported improved third-quarter results, helped by its telecommunications operations.

Wind Mobile has some 750,000 wireless customers concentrated in populated areas of Ontario, Alberta and British Columbia, while Quebecor has nearly 600,000 in Quebec.

It has often been mentioned as possible partner or takeover target for Quebecor if it goes ahead with its plan to become a fourth national wireless company.

In September, Quebecor chief financial officer Jean-Francois Pruneau said the company was interested in talking to Wind Mobile about a partnership, but wasn’t interested in a takeover.

Quebecor has been considering its expansion for months, but Dion said the company will not rushed into a decision.

“We want all conditions to be right, whether it is regulatory conditions, business model conditions, partners conditions, we want everything in order to minimize our risk,” Dion said

“We want to make sure we’re doing the right things.”

Quebecor reported Thursday a net profit in the third quarter of $45.1 million or 37 cents per share on $1.02 billion in revenue. That compared with a loss of $188.8 million or $1.53 per share on revenue of $1.02 billion in the third quarter of last year.

On an adjusted basis, the company said it earned a profit from continuing operations of $65.6 million or 53 cents per share. That compared with a similar profit of $63.1 million or 51 cents per share a year ago.

During the quarter, the company’s telecommunications business earned $738.2 million in revenue, up $23.5 million from a year ago, helped by its mobile business.

Average revenue per user for its operations, which include cable television and Internet service as well as cable and wireless phone service, was $126.02 in the quarter, up from $119.24 a year ago.

The wireless operations saw revenue grow 30.5 per cent to $75.7 million in the quarter as it added 38,100 new customers for a total of 589,400.

Average revenue per user from mobile telephone services at Quebecor rose to $44.23 from $41.55 a year ago.

RBC Capital Markets analyst Drew McReynolds said overall results were “slightly better than expected.”

He noted that the number of new wireless customers was slightly ahead of his expectations.

“ARPU increased 6.5 per cent year over year, which was ahead of our 2.5 per cent estimate,” McReynolds wrote in a note to clients.

Meanwhile, Quebecor’s media business earned $298.8 million in revenue in the quarter, down $19.9 million from a year ago as revenue fell at its newspaper and broadcasting operations.

Last month, Quebecor agreed to sell most of its Sun Media business, including 175 newspapers, Quebecor’s Islington printing plant in Ontario and 34 real estate properties in Ontario, Alberta and Manitoba, to Postmedia for $316 million.

Quebecor Media still has Le Journal de Montreal, Le Journal de Quebec and the 24 Heures free daily as well as Internet, television, telecommunications and retail operations.

It will also retain ownership of Sun News Network.