Quebecor shares climb as company reports subscriber gains, rise in wireless revenue

Shares of Quebecor Inc. QBR-B-T rose 4.5 per cent in midday trading on Thursday after the telecom and media company reported record new mobile phone subscriber gains and a jump in wireless revenue.

The company added nearly 137,000 net new wireless customers during the quarter, the largest quarterly increase in the number of subscriber connections since the launch of the mobile service in 2010.

This beat analyst expectations of 92,100, and came ahead of its two rivals who have already reported third-quarter earnings: Bell Canada parent BCE, with 53,700 additions, and Rogers Communications Inc., with 17,000 adds. Telus Corp. reports earnings Friday.

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Quebecor has emerged as a significant competitor in recent years as it has expanded into new regions with its Freedom Mobile brand, which it acquired in 2023, forcing rivals to match its competitive price offers for wireless plans.

At the same time, incumbents Bell, Rogers and Telus have seen their share of new subscribers decline, while immigration policies have suppressed the overall number of new potential customers entering Canada.

“This was a strong performance by the company in a market that saw overall net addition declines and points to a strong momentum going into the holiday period,” said Scotiabank analyst Maher Yaghi in a note to investors.

Despite that immigration headwind, and a recent ban on certain fees introduced by Canada’s telecom regulator, Quebecor’s wireless revenue rose nearly 10 per cent year-over-year, representing the segment’s fastest growth since the acquisition of Freedom, the company said.

Overall company revenue was up 4 per cent, beating analyst consensus.

The Montreal-based company also reported higher average revenue per mobile customer, in part reflecting more upgrades to higher-priced plans, the company said in a release Thursday morning.

Meanwhile, the company bought back about $53-million in shares during the quarter – a move that Desjardins analyst Jérome Dubreuil said could be repeated in the future.

“With leverage declining rapidly in the quarter despite two dividend increases this year, we believe QBR has ample room to accelerate its share repurchases,” Mr. Dubreuil said in a note to investors Thursday.

The results come a day after the company’s stock hit a fresh high. Quebecor’s share price on the Toronto Stock Exchange is now up nearly 65 per cent per cent over the last year. Meanwhile, its three largest competitors’ share prices have declined over the same period.

“While QBR remains the most expensive stock in the Canadian telecom industry, we believe its growth profile and careful capital allocation justifies the premium,” Mr. Dubreuil said.

TD Cowan analyst Vince Valentini called the results “almost too good,” saying the combination of market-share gain and profit growth could prompt Quebecor’s three largest rivals to aggressively discount plans during the fourth-quarter holiday season to mitigate market-share losses.

It could also cause those companies to intensify their efforts to convince Ottawa “to mitigate regulatory benefits for new entrant carriers.”

Quebecor’s competitors have at times noted that the carrier has benefitted from cheaper access to set-aside spectrum in certain auctions, a policy introduced by Ottawa to promote market competition.

The company also benefits from the government’s network-sharing framework, which allows it – and other telecoms that own spectrum – to offer mobile service over rivals’ networks for seven years, at a government-set access rate, as they build out their own infrastructure. That mandated access is currently set to expire in 2030.