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Videotron takes a bite of Ontario market with Burger buyout

Quebecor, the parent of Quebec-based cableco/cellco Videotron, has purchased smaller internet and TV provider VMedia, a move which signifies the group's intentions to expand outside its home province, reports the Hamilton Spectator. VMedia's customer base is primarily concentrated in the Greater Toronto Area (GTA) in Ontario province. The independent operator launched an IPTV platform nine years ago and reportedly has about 50,000 customers in the GTA and other areas of the country, providing services via wholesale access to the networks of larger telcos and cablecos.

According to its co-founder George Burger, VMedia had struggled to gain scale partly because of a lack of funding for marketing and more aggressive promotions, therefore merging with Quebecor will allow the smaller company to 'provide even better deals for consumers and be even more competitive than the ISP space has been.' Mr Burger noted that wholesale internet access prices had been a major factor in deciding the fate of VMedia, in the wake of 2021's regulatory U-turn by the Canadian Radio-television and Telecommunications Commission (CRTC), which scrapped its own previous wholesale rate reductions and reverted to higher rates – widely seen as a major victory for large network operators. According to Burger: '[VMedia] had an entire different future planned … when we were looking at the prospect of a fair implementation of more reasonable wholesale prices. But now, with the reaffirming of the high prices of before, it's a tough business.'

Quebecor spokesperson Veronique Mercier stated: 'VMedia is now one of the key partners that will help accelerate Quebecor's plan to create greater competition in Canada through advantageous bundles of services, giving Canadian consumers more choices at better prices.' Note that Quebecor/Videotron is aiming to acquire cellco Freedom Mobile under an agreement with Rogers and Shaw announced last month, pending regulatory approval of that deal and the proposed Rogers/Shaw merger, a move which if successful would expand Videotron's mobile network footprint – and fixed/mobile bundling opportunities – from its existing Quebec/Ottawa presence across Ontario, British Columbia and Alberta, ostensibly creating a stronger fourth-placed mobile competitor to the 'big three' Rogers, Bell and Telus.

Thanks to TeleGeography for this industry update.

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Wednesday, 17 August 2022

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