MONTREAL -- Quebecor Inc. (QBRb.TO) says it had early stumbles in rolling out its new discount wireless carrier last quarter but that it's encouraged by current growth.
Last November's launch of its Fizz mobile brand is part of a push into new wireless and television broadcasting areas as its traditional businesses of media and cable fade.
The company, however, faces aggressive competition from existing players, said Quebecor CEO Pierre Karl Peladeau on a conference call Wednesday.
"The incumbents were prepared for our launch. So they were, I would say, very aggressive especially on handset promotions for the Black Friday season and same as well for the Christmas period."
The launch of Fizz was also marred by technical issues that led the company to pull back on advertising last quarter, but the rollout is going much smoother this quarter, said Peladeau.
"Since that has been set and all our marketing campaigns are now underway, the success in Q1 is incredible, much higher than our expectations, and we think it continues."
The company is also preparing to launch an internet brand, and plans to soft-launch its Helix internet-connected television platform in the coming weeks as it looks to position itself for changing consumer demands.
"We feel that we are well targeting the younger audience or the younger generation," said Peladeau.
The push to new technologies come as its media revenues decreased by about three per cent, including an 18 per cent decline for its magazine business, while at its Videotron cable business cable subscribers were down by 6,000, and landline telephone subscribers dropped by 17,000.
Peladeau said the company is looking to change up its media offerings, including with more podcasts, specialty channels, and focused publishing.
"Despite significant headwinds and a challenging advertising revenue environment, our media group continues to position itself more favourably by diversifying its sources of revenue and complementing its service offering," said Peladeau.
The company says it is financially well positioned to push into new areas with liquidity of more than $1 billion.
For the fourth quarter, the company reported net income of $116.8 million, up from $70.4 million in the year-earlier period.
The profit amounted to 46 cents per basic share, up from 29 cents per basic share in the fourth quarter of 2017.
Adjusted income from continuing operations was $132.7 million, or 52 cents per basic share, which was above analyst estimates.
Revenue was in line with estimates at $1.09 billion, up from $1.06 billion a year earlier.
Analysts had estimated Quebecor's adjusted income from continuing operating activities at $124.15 million or 48 cents per share, with $1.09 billion of revenue, according to Thomson Reuters Eikon.