Canada’s telecom sector is facing a pivotal moment as a key regulatory framework governing wireless competition approaches its 2030 expiry, raising questions about investment, pricing and long-term network quality.
BNN Bloomberg spoke with Maher Yaghi, managing director, telecom, media and infrastructure analyst at Scotiabank, about how regulatory policy, capital spending and competitive dynamics are shaping Canada’s wireless future.
Key Takeaways
- Canada’s wireless market relies more heavily on regulation than investment-driven competition, creating structural differences from the U.S.
- Uncertainty over whether mandated network access will extend beyond 2030 is delaying investment and shaping industry strategy.
- Limited capital investment by challengers is constraining the development of a strong fourth national competitor.
- Incumbent carriers may cut capital spending to protect free cash flow, which could support valuations but weaken long-term network quality.
- Quebecor’s valuation premium is closely tied to regulatory support, with potential downside if that support is removed
- LINDSAY: In 2030, Quebecor’s CRTC-mandated access to the big three carriers’ wireless networks expires. Until regulators decide whether that access will be extended, Canada’s telecom sector is stuck in a period of uncertainty. Our next guest argues that Canada’s market is fundamentally different from the U.S., where competition is driven by investment rather than regulation. Here to tell us more is Maher Yaghi, managing director and telecom and media analyst at Scotiabank. It’s great to have you join us. Thanks so much.
- MAHER: Thank you for having me.
- LINDSAY: So these differences that you’re highlighting between Canada’s market and the U.S. market — how do these differences shape the competitive landscape in each country?
- MAHER: Yeah, great. So, you know, having covered both the Canadian and the U.S. market, it’s very clear from our research that, to get a sustainable competitor to remain in place long term, to affect and lower prices in the marketplace, it’s better to see that competitor invest significantly in infrastructure to position themselves to compete in the long term, instead of relying on regulation to provide them the network infrastructure to compete. In our view, for Canada to continue to see a competitive wireless market, we need to see significant investment by the challenger, which we have not seen so far to date.
- LINDSAY: How would you start to see investment, though? What needs to happen for that to change?
- MAHER: Right now, regulation is definitely helping Quebecor, and Quebecor has played their hand perfectly in terms of utilizing the regulatory environment to provide cheaper plans in the marketplace. But to continue to rely on regulation means that you’re sacrificing the investment opportunity that new technology will allow you to provide to consumers over the long term. Because, through the regulation that the CRTC has put in place, the return on invested capital for the incumbents has been lowered significantly. You’re basically socializing a little bit of the network effect that these companies have invested in to provide support to a challenger. What that means in the long term — and we’ve seen that happen in Europe and other places where we have that kind of regulation — is that the incumbents reduce their investments because they need to protect their free cash flow, and hence, long term, the technology and the network start to deteriorate.
- We argue in our report that for the incumbents like Bell, Telus and Rogers right now, they’re being handicapped by investors. Their stock performance has been quite negative compared to the S&P/TSX, and in our view, their best approach going forward is to really significantly cut their capex, because they’re not going to get the return on those investments like they did in the past. So eventually, the CRTC, I think, is going to come to a crossroads. They’re going to have to decide either they need to continue to provide the subsidy to the challenger long term and suffer the consequence of deteriorating networks, or basically stop the regulation, as it was intended to be stopped in 2030, and let Quebecor compete on their own.
- LINDSAY: Okay, so I want to go back to something you said just a moment ago, and that is you think the incumbents should be cutting wireless capex. How would that boost BCE, Rogers and Telus stock moving forward? And also, what impact would that have on the country’s productivity as a whole?
- MAHER: Yeah. So these companies, when you look at valuations for telco stocks, they trade on free cash flow. Free cash flow is really the biggest determinant of success for a stock, and growth in free cash flow is the most important metric. These companies, in our view, by cutting their capex to levels that we see both in the U.S. and other places in the world, could provide them with upside in the 10 to 15 per cent range from a valuation perspective. Now, obviously, productivity for the country will not be helped by that. However, these companies have high leverage ratios right now — all three of them, Telus, Bell and Rogers — so they would do themselves a favour, in our view, and see their stock performance improve if they were to cut their capex, like we’re suggesting in the report.
- LINDSAY: Okay, so we’ve talked about the incumbents. Now let’s talk a little bit more about Quebecor, because some investors, you say, are treating Quebecor as Canada’s version of T-Mobile. Why do you think that comparison misses the mark?
- MAHER: This is a flawed comparison, in our view. It’s wishful thinking. We provide the background in our analysis to show that T-Mobile became the T-Mobile that it is — and if you want, we can maybe talk a little bit about that. T-Mobile has really changed the behaviour of Verizon and AT&T in the U.S. by investing significantly in network infrastructure, and now T-Mobile has one of the best networks, if not the best network, in 5G in the U.S.
- This is completely the opposite for Canada. When you look at capex intensity by Quebecor, it’s one of the lowest in North America. Second of all, if you look at market share for T-Mobile, when they bought Sprint in 2020, they had about 20 per cent market share. That went up to about 33 per cent market share after the acquisition. In the case of Quebecor, you’re running at right now 12 to 13 per cent. They’re adding only half a per cent per year in market share. It will take them a very long time to catch up to where T-Mobile was in 2020 and to position themselves as a real challenger long term. But our view is that to really become a significant challenger like T-Mobile, they have to invest more, which, I think it’s easily argued, they have not so far.
- LINDSAY: And just lastly, how much of Quebecor’s valuation depends on the CRTC extending this contract beyond 2030?
- MAHER: So right now, Quebecor stock is trading at eight times EBITDA, for example, in the same environment — the same level of multiple that T-Mobile is trading at. T-Mobile is growing more than twice as fast as Quebecor. However, when you compare Quebecor to the other incumbents in Canada, they’re trading at a point or even two points premium to the incumbents. All that premium, in my view, is related to this regulatory support that is coming from the CRTC. So if that regulatory support goes away in 2030, we expect multiples to contract or to converge to where the other incumbents are trading.
- LINDSAY: Okay, we’ll leave it there. That was Maher Yaghi, managing director and telecom and media analyst at Scotiabank. Appreciate your time and your insight on this. Thanks so much.
This BNN Bloomberg summary and transcript of the March 25, 2026 interview with Maher Yaghi 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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