Quebecor sends a message to the Big Three Canadian telecoms

Your lunch looks good!

Canada’s telecommunications industry is in bad shape, and investors are fed up. The major providers, BCE, Rogers, and Telus have all seen their share prices fall in recent years. All are reducing capital expenditures and laying off employees. Rogers recently announced it is offering voluntary departure packages to about half its staff, which would be about 12,000 people.

Fingers are pointing in all directions about who is responsible for this mess. Some of the blame has been placed on intense price competition and reduced immigration, which reduces the number of potential new buyers.

The leading players in the industry say CRTC decisions to force major providers to lease space on their networks to smaller competitors at regulated rates have reduced the financial incentive to invest billions in expanding fibre and 5G infrastructure. Rogers has criticized these rulings, saying it creates a “punitive” regulatory environment.

All this negativism has made the telecommunications sub-index one of the worst performers on the TSX this year, up only 3.27%.

It seems the only company making any progress in the business these days is one that’s there almost by accident.

In 2023, when Rogers was trying to acquire Shaw Communications, Ottawa insisted that Shaw’s Freedom Mobile wireless operation be divested to ensure strong competition would be maintained within the sector.

Upstart Quebecor gaining ground on the Big Three

Quebecor Inc. (TSX: QBR.B), which was mainly a regional player operating in Quebec and Eastern Canada, saw the opportunity and jumped at it. Through its wholly-owned subsidiary, Videotron, it bought Freedom for $2.17 billion. That deal now looks like a real steal.

Freedom has established itself as a strong competitor to wireless services provided by rivals BCE, Rogers Communications, and Telus. It operates its own cellular towers and network infrastructure in major urban and suburban areas across Canada. For national roaming, it uses mainly Rogers infrastructure.

Acquiring Freedom Mobile also enabled Quebecor to offer, through Videotron, multi-service bundles (wireless, internet, TV) across British Columbia, Alberta, Manitoba, and Ontario.

In terms of client base, Quebecor is nowhere in the same league as its competitors, but it’s gaining ground, and its stock is performing much better. BCE is up 5.2% so far in 2026, but that’s after huge a long downward slide that started in the spring of 2022 and included a large dividend cut. Rogers is off 2.49% this year and Telus has lost 3.41%. Quebecor, by contrast, is ahead 28.43%.

Results for the first quarter of 2026 show modest growth in Quebecor’s revenue, profits, and connectivity.

The company recorded revenues of $1.4 billion, up $52.1 million (3.9%) from the prior year. The Telecommunications segment posted increases of $50.1 million (11.4%) in adjusted cash flows from operations, $38.2 million (6.6%) in adjusted EBITDA, and $56.8 million (4.9%) in revenues. This included a $37.6 million (8.8%) increase in mobile telephony service revenues and $10.1 million (3.2%) in internet access service revenues. There were net increases of 28,800 (0.7%) connections to the mobile telephony service.

Quebecor’s net income attributable to shareholders was $225.4 million ($1 per basic share), an increase of $34.7 million ($0.18 per share) or 18.2%. Adjusted net income was $219.5 million ($0.97 per share), an increase of $34.4 million ($0.17 per share) or 18.6%.

The consolidated net debt leverage ratio decreased by more than $120 million to 2.86x, the lowest among Canada’s major telecommunications providers.

Despite Quebecor’s recent strength, CEO Pierre Karl Peladeau expressed his displeasure with the way the Canadian telecommunications industry is being run. In the quarterly report, he said: “While we are pleased with these results, we remain extremely cautious due to the deep, ongoing structural crisis in the media industry.”

He cited the dominance of U.S. technology companies over the advertising business, reduced support from the Canada media fund, “unfair competition” from CBC/Radio-Canada, and “the heavy regulatory burden” imposed by the CRTC as issues that “continue to weaken private broadcasters”.

He went on: “Facing these persistent challenges, a concerted effort by all stakeholders – governments, the CRTC, industry associations and unions – is needed to rebuild a viable model that reflects market realities and preserves our collective ability to produce and deliver news, entertainment, and sports content to domestic audiences and support the ecosystem that depends on it.”

Quebecor shares are doing well, closing on May 22 at $66.49. Plus, the stock pays a quarterly dividend of $0.40 a share ($1.60 a year) to yield 2.4%. My Internet Wealth Builder newsletter rates the shares as a buy.

Before investing, consult your financial advisor to ensure the stock aligns with your financial objectives and risk-tolerance level.

Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.

Follow Gordon Pape on X at X.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.

For more information and details on how to subscribe to Gordon’s newsletters, go to www.buildingwealth.ca/subscribe.

Notes and Disclaimer

Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

Image: iStock.com/simplytheyu