Videotron acquires Fibrenoire in move to battle Zayo's Canada ambitions

Videotron has reached a deal to acquire fiber-centric service provider Fibernoire for $88.6 million, enhancing its ability to effectively compete with growing threats from U.S. providers like Zayo that are coming into Canada.  

There are two key benefits Videotron gets from acquiring Fibrenoire: a large customer base and a sizeable fiber network. Today, Fibrenoire serve over 1,000 business customers in the Montreal, Quebec City, Ottawa and Toronto areas over a fiber-based network spanning more than 4,500 km.

Previously the service provider established an interconnection relationship with regional competitive provider FirstLight Fiber that allows both carriers to extend their footprints in both regions.

Through its Videotron Business Solutions division, the cable MSO currently serves over 125,000 business customers with a mix of traditional Internet access services, network solutions, fixed/mobile telephone services and data hosting via its fiber, coaxial cable and wireless LTE networks.

Under the terms of the agreement, Videotron has acquired all of Fibrenoire's founding shareholders and the majority shareholder, Novacap TMT, a buyout fund that specializes in technology, media and telecom.

Fibrenoire now becomes an independent subsidiary of Videotron, with 60 employees remaining at its Montreal headquarters.

This acquisition comes at a time when Canada's incumbent service providers like BCE and Telus are facing a number of new competitive threats from not only cable operators like Videotron and Shaw, but also from U.S. providers like Zayo and XO Communications. Videotron will have to face off with these providers, particularly to get customers that have broader footprint needs.

After a long battle with shareholders and the Canadian government, Zayo struck a deal with MTS in November 2015 to acquire Allstream. Through this deal, Zayo will gain over 9,000 route kilometers of metro fiber facilities concentrated in Canada's top five metro markets -- Toronto, Montreal, Vancouver, Ottawa and Calgary -- that connects nearly 3,000 on-net buildings. Existing and new Allstream customers would also get access to Zayo's larger U.S. and European networks.

No less aggressive is XO Communications. In 2013, the service provider struck agreements with a number of Canadian providers to extend its network service reach throughout the Canadian market using a mix of its own facilities and its growing base of service provider partnerships.

For more:
- see the release

Related articles:
For Videotron's Morgan, wireline voice not an afterthought
Shaw advances data center, cloud services push with $1.2B ViaWest deal
FirstLight Fiber extends Canada Ethernet reach via Fibrenoire

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