Montreal-based Quebecor continues to expand its Freedom Mobile network and other brands.Sammy Kogan/The Canadian Press
Quebecor Inc. QBR-B-T is poised to reap the benefits of being the low-cost cellphone provider in a sector moving to competing over service, rather than a profit-crunching price war.
Montreal-based Quebecor will sign up roughly one in three new cellphone subscribers for the foreseeable future as it continues to expand its Freedom Mobile network and other brands, according to telecom analysts. They expect Freedom will remain the cheapest wireless option while increasing rates slightly, in step with an industry-wide move away from cutthroat competition on pricing.
Until this year, telecom company stock prices declined as the industry fought a wireless price war in response to falling demand for new phones, partly because of decreased immigration. Quebecor started the fight in 2023 after becoming the fourth national player with its $2.85-billion purchase of Freedom from Rogers Communications Inc.
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This year, analyst Tim Casey at BMO Capital Markets said in a report, the four major telecoms shifted to winning customers based on network quality, marketing and discounts on new phones, not cutting rates on data. He said: “Quebecor should benefit the most from more rational competitive behavior across the industry.”
Its share price is up 37 per cent so far this year, the sector’s best performance.
“Quebecor currently has approximately 12 per cent national market share, but we expect it will capture 30 per cent of subscriber net additions through 2027,″ Mr. Casey wrote. He said Quebecor has a pathway to achieving the company’s goal of serving 20 per cent of domestic cellphone customers.
Mr. Casey upgraded his target price on shares in Quebecor, Rogers RCI-B-T and BCE Inc. BCE-T ahead of Tuesday’s Bank of Montreal annual media and telecom conference, an event that is now in its 26th year.
Quebecor added 72,000 cellphone subscribers, or 25 per cent of new customers, in the most recent quarter, which ended June 30. In the first quarter of 2025, the company’s Freedom, Fizz and Videotron brands captured 50 per cent of new wireless subscribers.
In June, ahead of back-to-school promotions on new cellphones, Quebecor raised its price on 60-gigabyte plans to $39, prompting incumbents to follow suit with price increases. In a report, Bank of Nova Scotia analyst Maher Yaghi said: “While the market has shown early signs of stabilization, aggressive targeted offers from competitors persist.”
Other analysts also predict the cellphone price wars are drawing to a close. In a report, Drew McReynolds at RBC Capital Markets said: “While we would expect promotional skirmishes to emerge above and beyond the typical seasonal promotional activity through the second half of 2025, we believe there is a reasonably high probability improved price discipline holds.”
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If telecoms continue to shift to competing on perks, not price, Quebecor has the most room to boost profits. The company’s average revenue per cellphone user, or ARPU, is currently $34, while the Big Three incumbents boast ARPUs ranging from $55 to $58.
Quebecor’s ARPU is expected to increase steadily as it picks up market share. Mr. Casey said Quebecor’s wireless service revenue will rise at a 6-per-cent annual pace over the next two years, compared with increases of 1 or 2 per cent for peers.
He predicted Quebecor would boost its common share dividend by 5 per cent to 10 per cent next year. Rival BCE, parent to Bell Canada, cut its dividend by more than half in May as part of a strategy to build a U.S. fibre network and cut debt.
In Quebecor’s home cable market in Quebec, Bell Canada is winning subscribers and increasing price competition by aggressively marketing its fibre services.
Over time, analysts expect competition in the domestic cellphone market to evolve into something similar to the U.S. wireless industry, which is dominated by Verizon Communications Inc., T-Mobile US Inc. and AT&T Inc.
“In the U.S., the three incumbents essentially moved to an all-you-can-eat data model a couple of years ago,” Mr. Yaghi wrote. “They have changed the narrative and purchasing habits of consumers to focus more on speeds, handset financing, perks and entertainment and away from pure data pricing.”
“Moving away from quantity to quality of service reduces the risk of commoditization and the never-ending price matching between the different players,” he continued. “Each company can in this case create their own set of values that are differentiated between the brands.”