The cable company Cogeco acquires the Montreal company oxio
Service employees at Cogeco customers have been receiving a very high number of calls for several weeks.
Another independent Internet provider is swallowed up by a larger telecommunications company. The Montreal company oxio has fallen into the fold of the cable company Cogeco.
The two companies announced on Tuesday the acquisition of oxio, founded in 2019. Before this transaction, Cogeco was the only telecommunications company that operated under a single brand, notes analyst Jérôme Dubreuil, of Desjardins Capital Markets. Having a second brand that targets another segment could expand Cogeco's market, which we welcome.
The company did not mention the amount of the transaction, but Mr. Dubreuil puts it at between $20 million and $35 million. He believes that oxio's contribution to Cogeco's earnings would be limited.
Cogeco Connexion President Frédéric Perron noted in a statement that oxio had a high customer satisfaction rate for its home Internet service based on an all-digital experience. Cogeco intends to let oxio operate as an independent business.
This announcement comes at a time when the cable company is considering making the leap into wireless. Its big boss, Philippe Jetté, said in January that the conditions were promising and that the Montreal company should present a detailed plan in this regard by the end of the year. The decision is still conditional on the details of the regulatory framework that allows it to lease access to the network of major Canadian telecommunications companies, namely Bell, Telus and Rogers.
The President and Chief Executive Officer of Cogeco Communications, Philippe Jetté.
Mr. Dubreuil does not believe that a foray into wireless is the only reason for this transaction, but he adds that it would make more sense if Cogeco decided to take the plunge. The addition of oxio gives it a bigger footprint and gives it a brand from which it could decide to sell wireless services.
The transaction makes following a series of recent acquisitions of independent suppliers. The EBOX and Distributel companies passed into the bosom of Bell. VMedia, for its part, was acquired by Videotron.
This wave of transactions follows a decision by the Canadian Radio-television and Telecommunications Commission (CRTC) which, in 2021, reversed a wholesale price cut announced in 2019.
The decision raised the ire of independent providers, who saw it as an attack on competition. Cogeco Communications' stock had lost 3 $.10, or 4.18%, to $70.98, at the close of trading on the Toronto Stock Exchange.
