Videotron launches wireless network; price war expected

MONTREAL – Cable giant Videotron, a division of Quebecor Media Inc., officially entered the wireless market Thursday with the announcement that it will offer 3G service across the province by the end of the year.

Videotron’s long-anticipated move is expected to trigger a price war with competitors such as Bell Canada, Rogers and Telus, which could be welcome news for subscribers looking to reduce their cell-phone bills.

Quebecor CEO Pierre-Karl Peladeau told a news conference that it was an “historic day” for the cable

division, which will bundle the wireless service with internet, cable and telephony at competitive prices.

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 but analysts believe that presence could jump to as much as 18%.

“It’s clear that the arrival of Videotron represents open warfare with Bell,” says Richard Paradis, president of the telecom consulting firm Groupe CIC, who added that “Videotron might be best-placed among the new wireless arrivals.”

As of last March, the company had nearly 1.8 million cable TV subscribers and 1.2 million internet clients. The company was also providing telephone service to more than 1 million homes and businesses.

Videotron previously offered its wireless service through a leasing arrangement with Toronto-based Rogers. The two cable giants will maintain their business relationship through the sharing of cellphone towers.