Quebecor Inc.’s sale of media assets including the Sun newspaper chain could support plans for expansion of its wireless operations outside Quebec, an analyst said Monday.
Barclays’ Phillip Huang said the Montreal-based communications conglomerate may be building a war chest to help fund wireless growth across Canada, though he said in a note that Quebecor is “keeping its powder dry” until all the right conditions are in place.
He said the company’s capital requirement driver may be opportunities in the fast growing wireless sector in and outside Quebec.
Quebecor could use proceeds from media sales to help fund a deal for an ownership stake in a new entrant wireless company such as Toronto’s Wind Mobile and to bid in upcoming radio airwave spectrum auctions, Huang added.
Quebecor has said it is mulling wireless expansion but a key prerequisite is “fair” wholesale roaming rates, with the carrier’s charges for the use of each other’s networks currently under federal review.
Quebecor before the start of trading said it would sell much of its struggling media business to Toronto-based Postmedia Network for $316 million in cash.
Sun Media’s English-language assets consist of 175 papers/publications, the Canoe portal in English Canada, part of the national sales team based in Toronto and a printing plant in Islington, Ont.
The purchase includes the Toronto Sun, as well as the Sun dailies in Ottawa, Winnipeg, Calgary and Edmonton, the free 24 Hours daily newspapers in Toronto and Vancouver and the London Free Press.
The deal follows Quebecor’s sale last month of Nurun, its digital design and marketing services subsidiary and the divesture of 74 Quebec weeklies in December 2013.