Q1 2020 Earnings Call
Thank you for standing by welcome to Shaw Communications first quarter.
2020 conference call and webcast.
Today's call will be hosted by Mr. Bradshaw CEO of Shaw Communications.
At this time all participants are in listen only mode and the conference is being recorded.
Following the presentation, there will be a question and answer session to join the question Q simply press Star and one on your Touchtone phone at any time during the call should.
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Before we begin management would like to remind listeners that comments made during today's call will include forward looking information and there are risks that actual results could differ materially. Please refer to the company's publicly filed documents for more details on assumptions and risks.
Mr Shah I will now turn the call over to you.
Thank you operator, good morning, and happy New year, everyone. With me today are members of our senior management team, including Jay Mehr, Trevor English and palm accurately.
As we embark on another year the execution of our overall strategy remains the focus we have delivered another quarter of stable wireline results and we continue to grow our wireless and shop business divisions.
We have also commenced.
Some of our previously announced capital return initiatives as our consolidated Q1 results are in line with our expectations.
Coating significant free cash flow in the quarter.
In wireless we delivered both robots subscriber growth and strong financial results.
We added almost 67000 postpaid customers during a quarter when the pricing environment was extremely aggressive.
As it hasnt been testing how much launch of the unlimited plans last summer.
Density of this dynamic drove both our gross additions and churn up over the prior year, though overall, we continue to be pleased with the quality and quantity of our subscriber growth, including increased ARPU and ARPU about 4.1%, 4.5% and 1% year over year risk.
Actively driving wireless service revenue and EBITDA growth in the quarter.
In Q1, we also began success successfully renewing subscribers from our initial December 2017, I phone cohort. Despite these customers graduating during a period of intense promotional activity. We're pleased with the early results of our renewal programs.
We continue to invest is improving our network for the benefit of our wireless customers. The deployment of 700 megahertz spectrum is substantially complete in Western Canada, and we plan to be fully deployed in the east by the end of fiscal 2020.
Within our consumer operations, we're steadily growing broadband ARPU use and were delivering a better customer experience.
In late October we launched shop blow curve total, which by those are faster internet speeds and IP video with a straightforward approach to rich content.
All in price point that is attractive to the traditional or family oriented consumer segments.
This clearly how to impacted our subscribers in the quarter as the piece or video losses slowed considerably.
To our best result in over two years.
As our IP TV availability continues to grow now at close to 80%. So too does a number of customers choosing to self install which has increased to 48% in the quarter.
Our premium Shabalin curved surfaces appealed to the family segment, while our newly launched freedom home Internet targets, the younger city living and heavy daily users.
What is our dual brand approach, we have established distinct value propositions to meet the needs of different customers different customer segments, and we will continue to build upon the strategy in fiscal 2020.
Overall wireline results for the first call quarter were solid and align with our commitments, which reinforces our free cash flow growth profiles in fiscal 2020 and beyond.
I'll now turn over to travel to discuss the Q1 financial results in more detail.
Thank you Brad and good morning, everyone with some changes to the way we present, our reported results, including the adoption and it has an implementation of I or for a 16, let me walk through the numbers in a bit more detail.
So the revenue increased 2.1% to 1.3 billion, an EBITDA increased over 80% to 588 million.
This includes a 30 million dollar impact from I have for a 16, excluding this new accounting standard even increased 1.1% for the previous year and as Brad mentioned this was in line with our expectations.
Wireline revenue in the first quarter declined by approximately 1.5%. The decline was due primarily to continued losses in the mature consumer wireline products, partially offset by growth in consumer Internet and business no step for Q1 business results the comparable year over year includes revenue from our covered one data center, which was.
Hold effective August 1st 2019, and if we adjust for the disposition business revenue was up approximately 5% in the quarter versus a year ago.
As we previously disclosed in her up 19 annual report. We've also made some minor reporting changes within our wireline segment.
Effective this quarter revenue from our broadcast services and wholesale GP <unk> that was previously reported on a business segment is now included in consumer revenue. However, the prior period has also been adjusted so the figures are comparable and we note that this change is only between segments. Therefore is no change to overall wireline revenue.
Or EBITDA indefinitely team the combined impact on revenue is approximately $36 million in F 19 that moved to consumer which was previously reported under business.
Wireline EBITDA increased 3.4% this quarter, which includes $21 million related try to for US 16, excluding the accounting impact wireline EBITDA was in line with the previous year and our margin remained strong at 46.5%. This reflects our continued focus on capturing operating efficiencies.
First quarter wireless service revenue increased over 18% year over year to almost 200 million EBITDA increased over 60% to 77 million of which 21 million was related tire for us 60.
Excluding the accounting impact wireless EBITDA was up 23% and our wireless margin improved over the prior year as we continue to scale the business.
In terms of free cash flow and as we've previously discussed we've made some adjustments to management's definition to account for lease payments that are no longer classify this operating expenses under I for US 16, as well as interest on lease liabilities reported in the quarter by making these adjustments are Q1 and ongoing free cash flow will be comparable to historical results.
In the quarter, we deliver free cash flow growth of 12% year over year to $183 million.
As we near the end of BDP, approximately 370 employees exited in the quarter and the program is now 85% complete we remain focused on the execution of our strategic priorities. We're on track to deliver both the BDP savings in the year and to achieve our stated fiscal 2020 commit.
Subsequent to quarter end, we were active in the debt capital markets on December 9th we raised $800 million of senior notes comprised of 500 million.
10 year notes at 3.3% in 300 million of 30 year notes at for a quarter percent.
Following the successful offering we completed the early redemption of a total of $800 million worth of bonds that were maturing in 2020.
2021.
Poster financing activities or next significant maturities not until November 2023.
Our balance sheet and liquidity position continues to be strong however, due to the implementation of our trip 16 effective September 1st we were required to recognize approximately $1.3 billion of lease liabilities on our balance sheet to existing related to existing lease obligations. As a result, we updated our target net debt.
Average range by half a turn to two and a half to three times and as at the end of Q1, our leverage ratio was two and a half times, which is at the low end of our revised target range.
Well, we also continue to have a fully undrawn five year billion and a half dollar committed credit facility and it's part of our capital return initiatives that were announced in conjunction with their Q4 results in F 20 guidance, we repurchased and canceled approximately $25 million worth of class B shares during the quarter Brad backward.
Thank you Trevor in summary, we are pleased with our overall performance in the quarter, we continue to make investments and our networks, including preparation for the deployment of 600 megahertz spectrum and small cells for eventual Fiveg launch, we look forward to more clarity from the regulatory bodies.
As to how the future of the Canadian facilities based wireless and wireline landscape will fall.
As our results continue to demonstrate facilities based operators provides the most effective sustainable competition in the market and offer Canadians innovation and real choice for their connectivity services.
Operator, we will now take questions.
Thank you we will now begin the question and answer session to join the question Q. Please press star and one on your Touchtone telephone you will hear a tone acknowledging your request. If you are using a speakerphone. Please I'm sure you lift the handset before pressing any Keith if you wish to remove yourself from the question Q.
You May press star and to anyone who has a question May press star and one at this time.
Our first question comes from Vince Valentini of TD Securities.
Yeah. Thanks, very much conniving asked two questions on wireless into on cable.
The wireless first.
We don't disclose CLA nobody does anymore, but can you directionally give us any sense as to how much.
It may have increased in Q1 versus Q4 or Q3, given all the competitive offers out there and given your absolute zero plans are just like to get some sort of handle on how much equipment subsidies and other promotional costs are going up. The second question will be in December you. Finally, we'll be lapping two years.
So having the I phone, which has lots of positives for ARPU and in future quarters, but is there a negative in terms of churn where do you saw turned up in Q1 is that going to be able get tougher when those contracts expire in December given all the offers from competitors should we expect turned to go even higher than what it 5% job for December and and for all of.
Q2.
And then that you gave a ones are there's Roger so Jay can think about the mall falls answering.
One is home phone.
The decline here surprised me a little bit because it's already decline. So much in recent years correct me, if I'm wrong, but it looks like about 17% penetration of your total households, now as the number of people on the consumer side, who take home phone and it's only like 39% of year of your broadband customers are we starting to reach of.
Floor level here or do you expect the home phone to continue to fall at this kind of just kind of pace.
And then lastly, just business is 5% adjusted kind of what you expect Noah.
Obviously adjusting for that the datacenter.
Divestiture or is this 5% a bit on the low end of what your target range would be for future quarters.
Thanks.
Vince its Paul good morning, Thanks for those two questions I'll take them in order on your first question of I'd see away, Yes, there's short term competitive dynamic that we've seen which has relented a little bit in the last week or so, but certainly was well in place through the course of.
The Black Friday through.
Early January period, probably put about 10% to 15% on the cost of acquisition during that period I.
Hi, just can I'd kind of classify that as a short term inflationary dynamic that we expect to and hope to see move moved back to normalized levels over the course of the next few weeks.
On the iPhone cohort, yeah, I mean, where as Brad said, we're really really pleased with how positively that initial class of iPhone customers have responded to our renewal efforts.
Which of course as you'd imagine had been about two years into making as we as we build on that team.
The sheer scale and compressed timing of that renewal quarter was cohort was really unlike anything we've ever had to deal with before US I wanted just before I answer the question I want to recognize the efforts of the fantastic work that the base management in the retail sales and our customer care teams have done in building the infrastructure in the capability to make sure that we're ready for success here.
And I won't get too deep into the math on competitive reason for competitive reasons, but I will say that cohort is largely tracking as expected.
December if you could dream you certainly wouldn't graduate your first ever iPhone cohort into the busiest competitive kind of quarter really that I can recall in the Canadian markets. So we have seen.
Indicated both increased gross ads as well as increased churn.
I would I would expect that as long as we're seeing the pressure there we're seeing in the marketplace today that the levels. We saw in December of probably continue through January little bit early to call. The Q2 number but I would say, it's probably in or around that range again.
But I don't want to confuse the renewal of the iPhone cohort with just the general competitive dynamic.
I'm more concerned about the overall intensity of the market right now and the value of this being put into that market. Then about the renewal I think we've done just a great job on the renewable than we've we've learned a lot weve industrialized are our behavior behind that and.
This is something that we're good at now it's really the overall market that driving Chuck.
Great. Thanks that.
We will keep going here.
Your question on home phone we.
We're happy with where we are in our home phone business I think.
As you look at the calendar year, you'll likely see maybe a slight decline in losses in Q2, and then a better results in Q3.
The base is getting smaller these are extremely high value customers.
One of things you see in Q1 is our snowbird customers.
Overwhelmingly skew to home phone and come back up on Q3. So there's just a basis small enough now it's enough within a sort of booming bundle segment. The easiest slightly weaker results in Q1 than in subsequent quarters I think to be clear, though we're talking about very small changes the try.
Since that you're seeing other trends in the business, notably as we as we continue to drive segment to the high value subs.
Our total package, which was a super rich video package with Internet that 169, and you could add home phone for 10 Bucks.
Decent portion of our customers are adding home phone for 10 Bucks, but the the 10 Bucks and the 169.
Not really the strategic thing that we're driving after.
We're comfortable with where the businesses, maybe just a slight improvement on business I think in the medium term, we're right on top of 5% I know, there's a bunch of noise with stuff moving around and sale of the data center in revenue comp I think it's important to note.
The data center really wasn't to doesn't have any impact on EBITDA call.
Yes so.
Probably doesn't have as much impact as you might think.
I think.
In the medium term we're at the.
Low end of what that possibility look sites I think though when you.
I think through what's happening.
Just as we've got really stable SMB growth that we're we're very happy with minutes offset against price competition, and we've got pockets, where the economy's impacting our legacy service at large enterprise segments. So lots of moving pieces. There we think in the medium term an opportunity to pop up above 5%.
But I think 5% it's kind of.
In the general rainfall before for the next couple of quarters.
Sounds good thank you.
Our next question comes from Jeff fan of Scotiabank.
Thanks, Good morning, guys.
I've got a couple for wireless and quick one hopefully for cable as well.
Just on wireless Paul.
Can you maybe help us.
Kind of dissect the specific.
Competitive behaviors that were in the market.
During your quarter or through December that may have caused the higher gross adds and higher churn.
I know Vince of alluded to subsidies, but there was probably some on pricing as well. So maybe you can just help us dissect what was happening in whether you've seen.
Any kind of let up since the holiday period as on that.
Into January .
The second part on wireless is just on your comment regarding the two year cohort that it's somewhat in line with your expectations I'm wondering if he can give a little bit of color regarding.
Maybe what those expectations are regarding those that would hang onto the device versus upgrading.
Versus perhaps incumbent win back activities and and then as we look out the rest of the year.
Thats kind of the third question, whether you continue to believe that 2020 ARPU growth for this fiscal year will be greater than 2019, and then the question on cable for Jay is it sounds like the Blue curve total really had an impact on video ads I'm curious why internet ads didnt.
Quite see the same kind a lift as video either sequentially or year over year.
We talk a little bit about the.
The drivers that that caused the video ads.
Improve so much better than last year in last quarter. Thanks, a lot.
Great. Thank you, it's Paul I'll take the first three in quick order.
On the competitive dynamic over the course of the last.
I'd characterize it from Black Friday through two last week.
I think many of you already noted that the incumbents have exactly been paradigms of pricing discipline. During this period really since the launch of unlimited plans are somewhere they've been.
Clearly erratic and net Black Friday to Christmas period was really no different than that.
It's important that kind of observe here, we've we've seen a significant break with convention from the incumbents and loss of the while in the last number of months. It's been done this kind of let the market down with pretty significant first mover and very expensive spending programs.
And it's a long list. So you asked for some specifics I'll just call. It a few things that anchor our notable.
During this time that we've seen much larger handset subsidies, we've seen massively discounted second lines as low as sort of $50 for 10 gig for unlimited.
Many of you have seen over holidays, so a pretty expensive gift with purchase bonuses like solar speakers and Apple watches and air pods.
Gift cards and national retail got a pipe $400 for some relatively modest MRC plans.
We saw 400 Ourtime credits off again, similarly kind of mid market plans.
On prepay, which is an area that we didnt spend a lot of.
Energy on in the last quarter, primarily because we saw pretty significant.
Promotions like first month free we chose to pursue quality rather than quantity on that front.
And the incumbents, even did things operationally that I was frankly, a little disappointed in like turning a blind idea, whether a customer was really a business or not and giving them sort of business pricing to consumer level subscribers. There were I guess at the end the thing that was maybe most compelling with the very.
Holding fairly desperate winback programs that we saw with some really extraordinarily discounted offers over the course of that holiday period.
You put all that into the into that cattle and I think the sheer scale what that spending in recent months suggest that some of the calculus involved in moving to a limited so aggressively might have been calculated as it certainly wasn't lease Ms time.
It is us competitively intense right now and has been for the last two months as I've ever seen it and.
The only really in the last week just either the second part of your question have we seen any relief at all.
Some more disciplined coming into the market, but I still characterize it is early.
Throughout that our strategy hasn't changed we're continuing to balance growth and profitability, we're not moving off our expectations for this year in terms of quarter million net ads.
And in response to the last part of your question. We do anticipate that are at 20 ARPU will exceed asked 19 ARPU, we're still confident on upfront. So overall, we have a very confident view of this we love where the market is from our standpoint.
Certainly.
It was it it was been sort of Turkey, 60, 90 days, it's inflated GA its inflated churn, but we're still executing exactly as we hope to.
Also in Jeff on your cable loop her question, just sort of level setting because.
You probably don't see in Western Canada, all of the marketing that exists.
Its highest level luker enables customer control of the modern smart home and we're with our customers every step away as smart evolve.
Great start and a bump in our brand after repositioning Chaucer technology leader, So happy with where we are what's driven in terms of video losses as mitigation of group.
Total losses since our mitigation of video losses since October 22nd.
Surpassed our expectations a bit and.
It's really combining our abundant content fast internet, all IP experience and our customers love the self installed so we got to which was a little seem here. We have we have some more momentum we love the outcome that we're getting on video subs, but section.
Really what we're chasing we're chasing our segmentation strategy and adding high customer lifetime value subs and by doing so.
Changing all of our sales and churn channels. The high value segments, you can see are pretty material shift in mix.
In our consumer business today, so subscribers that are a lot, but anchoring novan segmentation and customer lifetime value is really what we think it looks like.
In our modern show.
Maybe just a couple of very quick follow ups up one on wireless Paul on the ARPU greater than 20 versus 19 are you referring to the actual dollar growth.
The ARPU growth being higher than 2019.
The ARPU growth percentage being higher than 2019, Okay, and just one follow up Ford for Jay. So the is it fair to say than the what whether its gross adds improvement or lower churn.
You are seeing that video base that youre keeping.
I guess higher quality than you would've seen pre blue curve total launch.
Yes for sure that entirely in different segments.
I see the shift.
Way from.
Within the sharp brand away from simply driving kind of mobile millennials and really lucrative is focused on families is it's focused on on booming bundles.
So.
Internet and video, which are both down which is of course, what you would expect can we continue to drive.
You plan to 57% Internet Internet customers all that works.
Well you can see is video ARPU is off.
And it's up over budget as well. So we're ahead of our plans and Thats really because what we've done as we put the scale of our video business quite frankly, leveraging the scale. We get also from satellite we have scale on our video business to negotiate better programming agreements that have allowed us to a high content.
Good Riddance TV package for our customers and.
And Thats enabled us to compete more effectively and segments, you'll see as we move forward weve fairly dramatically changed all of our sales and churn strategy around those segments and.
You'll continue to see those results in families and booming bundles in other segments that broad customer lifetime value is significantly lower churn than some of the spaces. Our gross adds were coming from the past.
Great. Thanks for the commentary.
Our next question comes from Maher Yaghi of day Jordan.
Thanks for taking my question I'll start with a question for Jay just on on.
The blues plans.
Noticed.
Some.
More aggressive out say pricing structure for these plans.
With with prices around 90 bucks versus a run rate price.
180 990.
Just trying to figure out.
We've had.
And the past some periods, where these plans these kind of significant.
First tier prices.
Below the second the enterprise help on the subscriber front, but later on costs some issues on.
On the profitability or the revenue that flows into the second the air.
What's so do five are you finding that you need to offer these significant discounts to get the adoption for blue curve or what's the strategy behind that test those significant discounts on the second question is more related to.
The overall guidance for the year.
The first quarter at 1% approximately.
Gross and EBITDA corrected for IRS on your guidance.
For the year can you maybe just talk through how we should look at the rest of the year.
Improvements and have been where they're going to come from.
And.
I will just kind of splitting this between wireless and wireline. Thank you.
Great.
I'll start with your questions and.
Thanks for that.
I understand you're thinking and how you're thinking about our pricing and packaging and the.
Challenge with the thinking is it.
It's not with a lens that you can think across the board work clearly targeting blueprint total and it's working.
Completely different segments.
Then were for example targeting.
Freedom home Internet and so our dual brand strategy allows us to focus on those segments. Our two year value pine customers have a significant reduction in churn over our month to month customers.
And so the customer lifetime value of customers that are being added on the current model our city is significantly higher than the customer lifetime value. We are adding this time last year I recognize if you compare what our standalone month to month Internet pricing looks like and what our offer is for Canadians to sign up on a two year.
Value pod.
It looks like it's a deep discount the math on it.
Absolutely works I think what are the things our competitors are probably struggling with as well is we've got our cost structure now around all of our programming agreements that enables us and I think on big packages gives us a definitive cost advantage ease of use our competitor and we're clearly going after that as well swapped.
It looked like discounting too.
We're making great body uplift for total added.
It's a great product for US again video ARPU was up.
Internet churn and video video churn or down I think you'd like the dynamics of what's happening with the space.
And just on guidance Smart I think we spent quite a bit time on on last quarter's call talking about how we're running the business and it really is about delivery stability.
Within the wireline side of things and frankly Brets comments in my comments here in Q1 was was right on track.
We're sort of targeting that $490 million to $500 million of Eagle on a quarterly basis within wireline and.
We feel confident on delivering on that on wireless we continue to see us being able to scale the business and delivered operating leverage unless we talked about it last quarter again that will continue to scale. During the year really is more in Q3 Q4 will you'll see so we if you look at sort of sequential quarter over quarter growth rates.
Within wireless EBITDA, that's where we start to see the operating leverage within the business really kick in and it has to do with some of those.
ARPU in Abu growth metrics that Paul mentioned earlier in his remarks, so we feel like we're right on track in terms of the quarterly splits in the delivery of Q1 and again I would reinforce just the free cash flow.
The excited about the delivery of the cash flow. This this quarter and continue to have a strong conviction in the free cash flow profile of the company going forward, including the approximately $700 million that we're targeting for this year.
Okay alright. Thanks, Thanks for this and my last question on the wireless I'm trying to figure out you know, it's very hard to understand who is.
Who is beginning or who is continuing to be gress or in the market.
And the whole scheme of things.
When you look at the market than Q4, and how it evolves.
Some could say it was the reaction to your significant subsidies and and the markets for iPhone as you say, it's the incumbents, who are being overly aggressive on the subsidy model.
I guess the question as a now that we have seen a first small by some of the incumbents to remove those subsidies on iPhone.
Our is that a.
Positive for you to remove some subsidies or you your plans and Youre subsidy model is continuing as is and Thats. The plan that you are committed to or.
You.
To remove some subsidies to improve the profitability of the market.
Business that you are running.
No. It's Paul you won't be surprised to know that I don't think adjusted.
Turning to market right now if you go back to June 12th of last year, I think you'll get a pretty clear signal on where the market catalyst was.
On the IP announcement that we've made in recent days, we're going to watch that closely over the coming weeks as it as it is anticipated to roll out and see what the competition do there, but I think we're probably if we a few weeks early on it for a comment on that.
Okay. Thank you. Thank you.
Our next question comes from drew Mcreynolds of RBC capital markets.
Thanks, very much too for me first Paul on the wireless side could you comment on.
What you see maybe over the next year. So in terms of your at retail distribution footprint and can you comment at all.
With that Youre footprint expansion.
Looking back lets say last three or four quarters, how much of your kind of incremental loading is attributed to expansion are you.
Certainly satisfied with.
Where you're getting that loaded from that loading across your total footprint.
And then second question I guess, maybe for you Jay.
The base management side.
It certainly looks to me when you drill into your wireline results versus maybe a year or two years ago. The base management is certainly improving the execution is improving where are you from your perspective in terms that improvement where you ultimately want to be thank you.
Hey drew its Paul.
On retail footprint over the course of the next year. We've we've been really we were pleased with the growth over the course of the last two years is probably one or two more.
Name retailers that we'll look to bring on over the course of the next.
The next six months or so and I think there are a nice positive complement to what we're doing.
So you will still continue to see growth on that front.
Of course, we continue to focus much of our effort in the major malls in Canada. So you'll have seen us building a number of new corporate stores and renovating those that are now versus last year in the teams done a great job of really just improving the quality and.
Delivery of our of our retail experience over the over the last year. So I'm pleased with where we are there to get positive outcome on geography.
Yes, we're starting to see the early contributions from those new market do we opened over the course of 19, we saw some think one or two.
Percent increase in terms of our gross adds sliding principally to the west and I indicated I think in last couple of calls it would start to see subtle shift over time as we add markets like Victoria.
Into the mix. So we are starting to see substantial.
Provision from the West which.
We're pleased to see those have been great markets for us as we as we start them up.
And Andrew you're correct Everything's about base management in consumer and so proud of the work that the team is doing.
Both on revenue and.
Through EMR and also.
To your value plan now at 57% of Internet subs and continuing to grow.
And and continuing to.
Also lower churn it in our key categories.
Where we are in terms of the industry is we're certainly.
With internet churn, but need.
A number of our north American errors, but within the Canadian context, and as we can drive we've got some room for improvement here I think the Twentys story is largely about churn improvement in consumer and and Theres room in that 21 and may be.
These with new products in the future as you could well imagine so.
This is our total focus love to work the team's doing we've made good headway.
Lots ahead with lots of upside still ahead here.
Okay. Thanks very much.
Our next question comes from David Mcfadgen of Cormark Securities.
Hi, two questions first saw just on them on the video cable sense, obviously you.
Some big improvements there on the losses this quarter sequentially and I'm. Just wondering if you think you can continue to make improvements like that or or.
Done again, John is high and they continue to track at this level and then secondly, given that you've them.
Finished the pipeline and 700 megahertz spectrum and Western Canada.
If we were saying just hypothetically if you wanted to launch some on bonds BC and Alberta like how much would be required in terms of your systems to be able to do that like billing systems on the systems is it isn't.
Quite a bit to do our as our it's not really that much and you could go pretty quickly if you decide to do that.
Great well certainly start with.
Video cable.
We continue to be very pleased with how the bluecore targeting which is our focus this year is working.
It's clear to us that video losses will improve over after 19.
We're seeing extremely strong marketing campaign that bounce results through.
Pretty pretty solid launch repositioning charge the technology leader in the consumer space, So whether or not you will see numbers that look exactly like Q1 numbers.
It's really not about whats driving a lower video loss, it's about focusing churn and all of our sales channel on our higher value segments.
At our higher value connected.
Hi value family customers are booming bundles.
Maximize their lifetime value bring remarkably low customer churn when you bundle past home Internet with a rich video package. So we're just going to keep doing that and we're confident we're going to see cable video improvements over 19.
But we've also probably got to result in Q1 the reflects.
The strength of the marketing campaign around our launch in some of the excitement around the packaging.
David as Paul Thanks, a question on 700 and deployment in the West you're right to point out Weve been thrilled with the work the engineering and I teams have done in or in order to get that up and running so we're in great shape that is largely complete now in the west.
In terms of system requirements and potential launch of the second brand nothing to really report on that today, you're going to.
See us maybe talk about that.
I do get into some some customer facing things in in the next number of quarters, but nothing nothing of significance to report today.
Okay, I mean would there be a big upgrade required and.
And systems that Sean available on some amount musing freedoms assets.
Well just sort of the hypothetical level Youre. If you launch any additional brand on our platform I think our systems are well capable of dealing with that just as the.
Incumbents have multiple brands hanging off similar systems I don't I don't think Thats a huge lift there. Good question is.
As and when the market might be ready for that and and we're not really going to get into too much today.
Okay all right. Thank you.
This concludes the question and answer session I'd like to hand, the call back over to Mr. Shaw for his closing remarks.
Great. Thank you operator in the thanks, everyone have a great day, and we'll be talking to you in April .
This concludes todays conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.