Cable giant Videotron to launch wireless service Thursday

MONTREAL – Quebec cable giant Videotron will launch its 3G wireless service this week in a move that’s expected to shake up the industry by driving down prices.

Videotron, a subsidiary of Quebecor Media, has scheduled a news conference for 10 a.m. Thursday. Quebecor CEO Pierre-Karl Peladeau will be on hand to reveal details of the mobile service plan.

Videotron is expected to offer lower prices than those of competitors such as Bell Canada, Rogers and Telus. Existing Videotron clients will be offered deals if they agree to bundle their wireless service with cable, telephone and Internet.

The company obtained the rights to the wireless spectrum during Ottawa’s last spectrum auction in 2008. Videotron offered just over $500 million and its investment will reach $1 billion once installation costs are factored in.

Videotron’s entry into the wireless market will ramp up competition with Bell and other rivals. The Convergence Consulting Group says Bell currently holds 39% market share in Quebec, compared with 34% for Rogers and 27% for Telus.

Videotron only had a 1.6% share and previously offered its wireless service through a leasing arrangement with Rogers. The two cable giants will maintain their business relationship through the sharing of cellphone towers. Additionally, Videotron clients who move away from Quebec will continue to be steered towards the Rogers cable network when they settle in another province.