06/18/2014 06:02 EDT | Updated 08/19/2014 05:59 EDT

Vidéotron Very Close To Becoming 4th Wireless Carrier


MONTREAL - Quebecor is eyeing the establishment of Canada's fourth national wireless carrier if barriers such as high roaming fees and tower sharing problems are removed.

The media company, which provides cellphone service to about 500,000 customers in Quebec, told shareholders Thursday that it's looking at expansion beyond the province.

New chief executive Pierre Dion says Quebecor would like to provide Canadians with low-cost wireless choice and more competition.

Dion says Quebecor, which also operates cable, TV and newspapers, is thinking about combining with one or two of the new wireless entrants _ Wind Mobile or Mobilicity. He says that would almost triple Quebecor's consumer base.

The company through its Videotron subsidiary has spent more than $1.6 billion to date, including $788 million on wireless spectrum to build its network.

Dion says the key to expanding its wireless service is the need for a fair and competitive, federally regulated roaming policy.

He says current regulations favour the three large wireless players — Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) — which have more than 25 million wireless subscribers among them and control about 90 per cent of Canada's cellphone market.

Dion says the big carriers characterize any policy changes as "concessions" or "giveaways" to new players, but they're needed to provide more competition.

The Competition Bureau has said that greater competition in the tightly controlled wireless market could result in savings of about $1 billion a year for consumers and the wider economy.

A report from the Brattle Group estimates a fourth national carrier would expand mobile wireless usage in Canada and drive down the big players' average retail prices by about two per cent.

The federal telecom regulator wants to know if the big players are putting small wireless players at an unfair disadvantage with the wholesale roaming rates they charge them for using their networks. The Canadian Radio-television and Telecommunications Commission has public hearings scheduled for September on the matter.

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