A deepening price war among Canada’s major telecom providers is weighing on growth, with aggressive discounting failing to deliver meaningful gains.
BNN Bloomberg spoke with Vince Valentini, managing director of equity research at TD Cowen, who says the sector faces mounting pressure from pricing discipline breakdowns, regulatory changes and a challenging operating environment.
Key Takeaways
- Deep discounting, including $25 wireless plans, is eroding revenue without improving subscriber growth.
- Analysts have downgraded major telecom stocks, with no Buy ratings across the sector for the first time in decades.
- Lack of population growth and increased competition from a fourth carrier are limiting industry-wide expansion.
- A CRTC decision banning activation fees could remove tens of millions in revenue per carrier.
- Telecom companies are pursuing asset sales and cost discipline to manage debt and navigate ongoing pricing pressure.
Read the full transcript below:
ROGER: A price war between major Canadian telecom companies is not paying off, with subscriber growth slowing across the board. To break down the sector’s tough first quarter and what it means for the year ahead is Vince Valentini, managing director of equity research at TD Cowen. Vince, thanks as always for joining us.
VINCE: Thanks for having me, Roger.
ROGER: All right, the price war — is it working, not working? Who’s winning?
VINCE: Nobody ever wins in a price war. And it’s quite disappointing to me. We went through two years of a price war, and then for six to nine months it seemed like the carriers were getting back to discipline, and that seems to have all been thrown out the window here in the first quarter, especially in March. We saw escalating pricing battles, with carriers offering weekend flash sales of $25 rate plans.
The average ARPU for Rogers, Bell and Telus is in the $56 range, so if they’re selling services at a $25 base monthly fee, that’s extremely painful for their financials going forward. We felt it was best to get to the sidelines until we see some end in sight to this price war. As you’ve probably seen, we downgraded Rogers, BCE and Telus to Hold ratings as of last Thursday.
ROGER: And I think that’s the first time you’ve ever done that, if I’m not mistaken, right?
VINCE: I’ve been covering the sector for more than 30 years — a little more grey hair than when I started — and yeah, I’ve never had no Buy ratings in the sector. I don’t have a Buy on any of the cable or telecom names right now. It’s a pretty challenging environment.
With no population growth, you really need pricing discipline, and it’s difficult to have coordinated pricing discipline when you have four carriers. The government has worked hard to increase competition and bring in a fourth carrier in Canada. For consumers, that works. For the carriers in the industry, it’s a difficult situation.
ROGER: So do you think there’s not room for four?
VINCE: They can survive. None of them are going to do particularly well. The U.S. market really has three national carriers and is putting up better economic results than Canada. That’s a policy decision for another day. I don’t think this government has any appetite to change those rules, and they have bigger priorities right now.
So it’s something we have to live with. Carriers need to be disciplined with their costs. A lot of them are looking to trim non-core assets to improve their debt levels. They’re taking steps to deal with the situation, but first and foremost, they need to be more disciplined on pricing than what we’ve seen recently.
ROGER: And when it comes to trimming non-core assets, what are they looking to sell?
VINCE: Each company has its own approach. Rogers has a large investment in sports, which it values at up to $20 billion. We expect a transaction by the end of this year to bring in cash through the sale of a minority interest in those assets, including the Blue Jays and MLSE.
Telus has said it is looking for a buyer for part of its health-care business, which is likely its largest potential transaction. BCE has announced some smaller asset sales. It still owns its cell towers and a 20 per cent stake in the Montreal Canadiens.
All of them have assets that could raise a couple of billion dollars to help pay down debt and manage through the current wireless environment.
ROGER: Could Rogers sell all of its sports assets as a package?
VINCE: I don’t think so. The Rogers family wants to retain control. What we see as more likely is a minority sale to private investors, which we estimate could bring in about $6 billion.
A year or so later, there could be a public listing of those assets as a separate company, still controlled by the Rogers family. That would separate the sports and entertainment business from the cable and wireless business, allowing investors to choose their exposure.
ROGER: The CRTC is banning activation fees, which could remove meaningful revenue. How do companies adjust?
VINCE: It’s another curveball. Given how tough the industry already is, it’s surprising to see more regulation. The industry may try to challenge the decision, but if it stands, it’s another hurdle.
Companies could respond by reducing promotional discounts, such as fewer reduced-rate offers in the first few months of a contract. But overall, it could mean $50 million to $75 million in lost revenue per carrier if the decision remains in place.
ROGER: And where does Quebecor fit into all of this?
VINCE: It’s unlikely to be a takeover target due to foreign ownership rules, and there’s no indication its leadership wants to sell.
They’re performing well organically and gaining market share. Their average revenue per user is about $35, compared with roughly $56 for the larger carriers, giving them more flexibility in a price war. That’s supporting stronger wireless growth, although their cable business is slower.
You could argue it’s the strongest growth name in the sector, but it’s already trading at a premium valuation, so expectations are high.
ROGER: We’ll leave it there. Vince, thanks as always for your time.
VINCE: Thank you.
ROGER: Vince Valentini is managing director of equity research at TD Cowen. BCE is the parent company of BNN Bloomberg.
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This BNN Bloomberg summary and transcript of the April 6, 2026 interview with Vince Valentini are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
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