Cogeco Communications Inc. CCA-T expects to record a $1.7-billion writedown related to its U.S. telecommunications division, the company said Monday, in the wake of intensified competition from American rivals and in light of revenue declines in recent years.
The Montreal-based company operates Breezeline, a cable and fibre business serving 13 states mainly in the eastern U.S., offering internet, cell phone and television packages.
Cogeco Communications expects to record a non-cash impairment charge to goodwill and intangible assets in its third quarter. As of February, those assets were worth $5.9-billion, according to financial documents.
Breezeline has faced competitive pressure in recent years from the expansion of fibre networks by its American rivals, as well as fixed wireless access, a type of affordable internet service that does not rely on cables.
Speaking to analysts in April, chief executive officer and president Frédéric Perron said that Breezeline’s returns have been affected by “price wars,” with some of its competitors offering price-lock guarantees for more affordable rates. This mirrors the broader hit to earnings among Canadian telecoms, as cell-phone prices here have also declined in recent years.
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Breezeline’s annual revenue has been declining since hitting a high in 2022. It fell nearly 6 per cent between 2024 and 2025, according to financial records, while adjusted earnings during the period also fell. On the April call, Mr. Perron said he expected those returns to keep falling in the second of half of its financial year, though at a slower rate than in the first half.
Yet Mr. Perron said the company has retained “a medium-term aspiration of growing our customer base in the U.S.,” prioritizing customer lifetime value.
The company has been aiming to improve results by focusing on selling bundled packages, strategically expanding its network and finding efficiencies, such as by merging its American and Canadian telecom teams. Earlier this year, it launched a second internet brand, Welo.
Nonetheless, “we think Breezeline’s outlook remains challenged,” Bank of Montreal analyst Tim Casey wrote in a note to investors Monday morning.
Desjardins analyst Jérome Dubreuil said in a note to investors that the impairment should not be a surprise given Cogeco management’s previous discussion of headwinds, and said he felt it does not offer fresh insight into the future of the U.S. business, despite the impairment representing about 60 per cent of the company’s market cap.
The writedown, which is net of deferred income taxes, will not affect its cash flows or day-to-day operations, Cogeco said.
Canadian pension fund Caisse de dépôt et placement du Québec owns 21 per cent of Breezeline, according to Cogeco’s February financial filings, making it the only other owner of the division aside from Cogeco.
According to its website, La Caisse first invested in Cogeco Communications in 2013 by providing a $50-million loan, then in 2017 contributed US$315-million (about $435-million today) toward Cogeco’s acquisition of MetroCast, one of the companies that Cogeco would later merge with other assets to form Breezeline.
Cogeco is not the only Canadian telecom operating south of the border. BCE Inc.’s BCE-T Bell Canada purchased Washington-based Ziply Fiber last August, and is currently expanding that company’s network infrastructure through a partnership with PSP Investments.