Quebecor Reports a Good Q3 as Wireless Plans Remain in Limbo

After several quarters of mixed or mediocre results, Quebecor's third quarter in its telecom business was much stronger, most notably with a materially higher level of internet and wireless subscriber additions and growing revenue per user in those categories. The firm's media business—which makes up less than 15% of revenue—was weak, with a decline in advertising revenue as the biggest culprit. For Quebecor's stock, however, the uncertainty surrounding its future as a national wireless competitor is currently the biggest variable. We expect the Freedom Mobile acquisition to close, but even if it doesn't, we expect Quebecor to begin competing nationally by 2023. We are not making material changes to our forecast, and are maintaining our CAD 35 fair value estimate.