Q2 2020 Telus Corp Earnings Call

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Good morning, ladies and gentleman will come to the tallest 2020 Q2 earnings conference call.

I'd like to introduce your speaker Mr. Robert Mitchell. Please go ahead.

Hello, everyone. Thank you for joining us today, our second quarter 2020 results news release, Mdna and financial statements and detailed supplemental investor information posted on our website. This morning, I tell us dot com slashing busters.

On a call today, we have during lunch whats, so president and CEO.

Doug French executive Vice President and CFO.

That's why that Oh group, President Chair Health Health and tells come back and just pure actually executive Vice President and President and CEO I tell us International and also joining us today for the Q any portion of the call because they know how cheap president home solutions, Genco, President mobility solutions, and Tony Guaran, SVP and Chief customer Officer.

Given we have a virtual call today, I'd Darin will be taking the questions and she will be oh, which hitting them amongst various participants on the call today.

Firstly on slide two this presentation and answers to questions contain forward looking statements that are subject to risks and uncertainties and make based on certain assumptions. Accordingly actual performance could differ from statements made today. So we ask you do not place undue reliance upon.

We disclaim any obligation to update forward looking statements, except as required by law and we refer you choose a Christian assumptions is that one or public disclosures, including our second quarter 2020, M. DNA, our 2019, M. DNA and finally, just security commissions in Canada and the U.S.

With that over do you there.

Thanks, Robert and Hello, everyone.

I would tell his team continues to respond dynamically to the needs of Canadians and our communities, while demonstrating exceptional operational execution and providing innovative solutions for our customers in communities during the cold at 19 pandemic.

Notably at a time when the human connection has never been more important our tell a team remains committed to ensuring Canadians have access to the technology and support that enables them to work and learn remotely apply for a critical government resources received vital medical care and stay connected to family of friends and.

This regard I tell his team continues to deliver on our commitment of $150 million to support Covidien 19 relief across Canada.

Additionally, since the start of the global pandemic, but tell it spend the future Foundation has contributed five and a half billion dollars to 326 charitable help projects.

With the launch of our virtual tell the themes of giving this quarter alone tell his team members have participated in 200000 active giving including 500000 volunteer hours or an 131000 milestone for our communities.

Clearly we're stepping forward.

Last quarter, we expanded our tell us internet for good programs to help people living with disabilities access the vital tools and resources they need to live but filling lives from the comfort of their own homes.

Since introducing our internet for good program on a Canadian leadership basis, we've now enable more than 65000 Canadians from low income families with low cost high speed tell us internet.

I'd like to take this opportunity the thank the entire tell his team for their tireless efforts and eating our customers and our communities and in taking care of each other.

Despite the challenges we faced with respect to the global health crisis tell us that she'd resilient second quarter financial and operational results.

Our team delivered industry, leading customer growth of 141000 net additions all while maintaining the safety and well being of our customers and team members by leveraging our strong digital capabilities and demonstrating the efficacy of our long standing strategic focus.

I'm, providing the best in class customer experience over our world leading broadband networks.

This accomplishment realized against the backdrop of an unprecedented operating environment is reflective of our longstanding focus on fostering a leading culture with a highly engaged team.

Importantly, our strong second quarter results were achieved while 95% of our team embraced working from home, while continuing to respond with excellence in meeting the evolving needs of our customers.

Leveraging our distinct an excellent digital capabilities in concert with our teams characteristic grit and adaptability within the new operational environment. We added 61000 high quality mobile phone net additions.

Right entirely of higher value postpaid customers.

We also added 47000 wireline customer additions driven by 37000, Internet and 12000 security net additions which were both.

Over last year.

This strong customer expansion was supported by leading customer loyalty across our key growth product lines.

Loading historically low low postpaid churn.

No doubt five 9% backed by the telos teams longstanding dedication that delivering premium customer experience over the world's best wireless network.

And you to consolidated revenue was up three dot, 6% well EBITDA decreased by two dollarsnine percent clearly due to the impact from the ongoing health crisis.

In that regard our second quarter results, reflecting various co bid 19 impact across the business, including lower wireless roaming revenue.

The implementation of numerous customer support initiatives in response to the pandemic.

Incremental bad debt expenses, and as well the temporary closure of the vast majority of our retail points of distribution.

Certain tell us international locations and our tell us health clinics.

Thanks to our relentless focus on improving our cost structure in this environment as well as our tireless pursuit of incremental opportunities to enhance the contributions coming from all areas of our business. We mitigated some of these downside pressures while managing through various stakeholders.

Initiatives.

How did not been for the total net impact of this exhausted units event EBITDA would have grown by approximately 5% at the consolidated level.

Notably we generated strong free cash flow of $511 million in Q2 up more than 57% over last year.

These results are a further reflection of our teams resiliency and adaptability in the face of a challenging and rapidly changing operating environment.

Importantly, our robust free cash flow is and will continue to be achieved without having to sacrifice this strategic capital investments necessary to ensure the execution and success of our long term growth strategy.

Let's take a deeper look at wireless.

Second quarter network revenue decreased by speed up 3%.

Our consistent focus on profitable high quality smartphone centric subscriber growth was offset by the aforementioned pandemic related impacts.

As a result wireless EBITDA was down three dot, 7%, partially mitigated by an intense focus on cost management at that tell us organization.

Our 61000 Q2 mobile phone net additions, reflecting very strong performance, particularly in light of the market environment, We faced with co bid 19 related channel restrictions as well as our genes agility and innovation in leveraging our digital channels and leading network to offer.

Superior customer service throughout the health crisis.

The results speak for themselves.

It is incredibly encouraging to see our smart simplification thesis playing out so effectively and our wireless loading results this quarter and that bodes well for the future.

Our ability to seamlessly pivot our wireless business to operate almost entirely through our digital platforms without missing a step along the way is only possible. Thanks to the simplification journey and the technology investments that we made in digital that began several years ago.

Healthy connected device net additions at 33000 were down on a year over year basis, primarily due to lower Io GE gross additions from a reduction in business customer activity as customers delayed purchasing decisions during the pandemic.

This was partly offset by growth in our consumer health personal emergency response system devices and part of our overall health at home security thesis.

In totality wireless net additions, including both mobile phones and connected devices were 94000 in the quarter.

Our team delivered another quarter of strong and best in class loyalty results with a mobile phone churn rate zero dot, 8%, which represents a 21 basis point improvement over this time last year.

Notably our incredibly low postpaid churn of zero debt five 9% mark to 23% basis points improvement over this time last year.

Well, if we benefited from reduced voluntary switching activity as a result, other pandemic customers are clearly staying with us for our premium customer experience delivered by our team members and our globally, leading networks built by our team members.

Telesis network has continued to perform exceedingly well throughout the crisis inclusive of the resulting significant changes and usage patterns and added demand as network volumes have become significantly amplified.

The efficacy of our ongoing broadband technology investment continues to be reflected in numerous recent awards from leading independent third Party network authority.

Pittella recognized our wireless network as Beth and consistent quality lowest latency and fastest download speeds.

Furthermore, in early July tell us one U.S. based Fuklah's twentytwenty speed test fastest mobile the ward, marking the sixth consecutive year that tell US has won this award as well as bats mobile coverage for the third time.

Notably in the state a broke Tentatives mobile network experience May Twentytwenty report UK based opened signal down that road Canadian benefit from some of the fastest download speeds in the G. Seven.

It noted that the rural experienced on television network is better and faster than in any location within G. Seven nations with the exception of Japan, clearly a significantly smaller countries in Canada.

Which at 49 Megabits per second was only slightly faster than tell us is 48 megabits per second.

Consistently earning these prestigious third party accolades is particularly gratifying as our team focuses relentlessly on maintaining robust reliability and world leading performance across all of our critical services in rural as well as urban areas.

Dick keep Canadians connected to the vital economic educational how and social resources that they need.

That they need, particularly so during the contagion.

Looking to our next major network evolution in June we announced the first wave of our Fiveg network rollout in Vancouver, Montreal, Calgary, Edmonton, and the greater Toronto area within expansion to 26 additional markets across Canada.

Throughout the remainder of Twentytwenty.

In addition, we now announced new partnerships with Ericsson Nokia for our core wireless network and Samsung for our radio access network.

Importantly, our Fiveg network will profoundly enhance the way our customers connect the information connect the resources and of course chain Act to each other.

Building on our consistently world, leading technology, our Fiveg network will bridge digital divide and drive innovation across businesses government healthcare education, and social pursuits was creating an estimated 250000 jobs and contributing $40 billion.

Annually to candidates economy.

Something that we're clearly going to need in the aftermath of cobot 19.

This critical development in our Fiveg ecosystem is a testament to our team's dedication to maintaining a world leading network experience from coast to coast in Canada from urban to rural.

We've done it for 20 years on the network front, well do it going forward with Fiveg.

Finally to close in our wireless results ABPU was $69.65 and down five down 1% and ARPU was $56.82, which was down five dot 8%.

We continue to pursue strategies with attractive economic characteristics. The mitigate the effects of the pandemic and its impact on these metrics.

This includes the continued strong adoption I'd tell it's easy payment device financing, our tell us peace of mind enlist data plans and our tell us family discount plants that are all performing exceedingly well within the marketplace.

Indeed, once again over half of rate plan changes the migration in the quarter, where either step ups or flat from a revenue perspective, and I think this should be encouraging for investors.

We're also continuing to seek out and six your new avenues of wireless revenue growth in high margin areas, such an internet of things, which will clearly get volume I as the fiveg ecosystem gets commercialized.

We are excited about prospects in this space in concert with the commercialization of Fiveg and the opportunities that this is going to unlock in terms of new long term growth curve initiatives for our wireless business that will drive not just topline revenue growth, but will drive significant EBITDA expense.

And and free cash flow generation as we exact an ROI on the capital investments that we've made in commercializing fiveg volume I've seen the speeds and delivering on the pervasive coverage.

Now, let's turn to our wireline results.

Tell us once again delivered a solid quarter with smart execution and performance buttressed by our premium diversified and evolving product portfolio.

Second quarter wireline revenues increased by 13%.

This was supported by data revenue growth of 18% driven by a combination of higher revenues coming from our diverse portfolio of services and solutions, including robust performance at tell is international with contributions from our successful acquisition of competence call.

Center as well as strong organic growth, which Jeff will top off top off on later in this call.

We're also seeing strong data growth coming from excellent results achieved once again in home and business Smart technology and security with the inclusion of 80, Canada as well as robust growth in Internet third way data services and a very resilient performance from our TV.

Right.

And finally, we're seeing significant data growth with increased revenues from the heifers scaling of our virtual healthcare solutions, where we've seen a 10 fold increase in demand for Babylon by tell us, how and 300, new corporate customers within our Akira virtual care platform.

Brad swap will provide additional color on our health results in a few moments, but clearly from wireline wireless from T. I just security to our health business. The diversity of our data growth I'd tell us is both strong resilient and.

Bodes well for continued performance in this regard prospectively.

In addition to covert 19 related disruptions that tell us international revenue growth was partly offset by a decline in health revenue from the temporary closure of clinics for all non essential services as well as reduced health benefits claim.

It was also offset by lower revenue and EBITDA from business customers as they redeployed resources to answer the unique challenges that they face within their markets within the respectively operating environment that they struggled to cope with.

Wireline EBITDA decreased by one dot to present, reflecting temporary impacts from the pandemic in the quarter, including the previously mentioned disruptions that tell us international and tell us how along with customer first initiatives, including the waving of overage fees and increase.

Bad debt expense.

Clearly we were deeply sensitive to the predicament I've our customers. During this period and act it accordingly, and respectfully and you mainly in that regard. These factors were partly offset by the increased contribution from Teluss International and our home and business Smart Tech.

Knowledge eight as well as excellent cost containment across the business. Thanks to the efforts of our team.

Looking at our robust customer expansion.

We earn industry, leading second quarter Internet additions of 37000.

812000 year over year improvement on the back of higher gross loading and significantly lower customer churn.

We also realized TV net additions of 8000, including solid double digit basis point churn improvement as well as strong security net additions of 12000, which was up a thousand over this time last year.

Not bad going given all the constraints within the pandemic from marketing and sales through to the handcuffing of a lot of our fulfillment activities that we would have done on a more traditional basis, calling for greater innovations in that regard to be forthcoming from the tell his team and indeed they were.

These results underscore the attractive bundled offers available to customers across our highly differentiated product portfolio.

Our strong results also reflect our teams debt thats focused on leveraging the competitive differentiation inherent in our pure fiber broadband network.

Notably despite being largely unable to enter the homes or premises of our customers, we achieved exceptional internet and security loading results due to the success of our innovative virtual technician model and the grid of our team in providing best in class customer experiences even in the most.

Alan Jain of circumstances, and this was the most challenging circumstances.

As a result overall total wireline argue net additions of 47000 were up 4000 on a year over year basis, which represents an outstanding achievement was facing the challenges of the global pandemic and remaining steadfast in keeping our customers and our front line.

And team members safe and healthy.

Our consistent industry, leading wireline execution clearly highlights the importance of our dedicated focus on delivering customer service excellence over our world leading fiber network.

During the quarter, our team expanded our pure fibrek coverage to approximately 73% of our high speed broadband footprint.

On our way to approximately 80% coverage by the end at 2020.

My how we have come a long way since the end at 2012 2012 to be able to be within spitting distance over the back half of 2020 now to get to a coverage footprint of 80% as it relates to our Internet broadband territory. This bodes well for the future.

Just what it means for our Ffh business, but what are pervasive fiber network will enable for our Fiveg wireless operations given the synergy between the two.

Indeed, the current environment underscores the potency other tell as pure fiber network, which enables millions of Canadians to work learn access entertainment transact online and socialize virtually from home on a significantly intensified basis or.

All this we as a nation as citizens as consumers and businesses make a quantum progression into the digital society and digital economy that will endure and grow well beyond the current global health crisis.

And we are clearly positioned for sustainable competitive advantage in this regard given the technology investments that we have made on a prescient basis over the past decade, notably the efficacy of our ongoing broadband technology investments is also reflected.

And our recent award from leading Independent Network Authority, USA, PC magazine, which ranked tell us as the fact that Internet service provider in Canada.

And this is down to the pure fiber investments that we've made and the massive footprint that we had built and realized for the benefit of customers and shareholders alike.

Despite the challenges we faced with respect to cobot 19 tell us delivered resilient financial results industry, leading subscriber growth and customer churn alongside robust free cash flow generation.

Importantly, we continue to expect to drive strong free cash flow within the lower half of our original target range of one dot for the one dot $7 billion based on management's goal to deliver flat to slightly positive EBITDA for 2020 and do.

Doing that making astute capital investments in line with their original Capex guidance for the full year Twentytwenty.

Moreover, we remain hopeful that conditions will permit us to meet or exceed our targeted dividend increase when we report our third quarter results in November.

As we continue to advance our broadband leadership and embraced our winning go to market strategy backfire globally recognized culture and industry best customer experience, we remain confident in the long term outlook for our business and the significant opportunity before us to further elevate that.

Now lets brand accelerate our growth strategy and build increasing value for shareholders and return that money to shareholders. Given the success of the implementation of our go to market actions.

Our robust think consistent performance over the longer term, coupled with our strong balance sheet and our cost containment measures positions us well to navigate the uncertainty caused by the global health emergency.

These factors alongside the incredible innovations we are driving in response to the current crisis and the tuition value that we leaned over the past several months will also support the ongoing evolution of our operating model and the resiliency of our organization ensuring that we.

Strongly position for anticipated economic challenges and the ability to also seized upon significant market opportunities.

Our team's unwavering commitment to improving outcomes for our fellow citizens in concert with our leading operational execution and are vastly superior asset mix continues the defined calluses leadership in social capitalism, reflecting the symbiotic relationship between our company.

Okay, and the community that we serve.

I remain proud and grateful to the entire team.

And I think that was exemplified over the past three months.

And on that note braswell I'll hand, the call over to you.

Thanks Darren.

Our efforts in the health space I've never been more important as the coven 19 pandemic continues to impact the country.

As we navigate this crisis the pandemic is highlighting the need to enhance our health care system to support a massive influx of patients.

Back to healthcare workers on the frontline and strengthened our mental health support services.

The recent rice in cases indicate that the risk of a second wave is real coven 19 will be with us for a longer than expected period and the need for digital health care will expand.

A recent study by the can you in medical association found that nearly half of comedians or use virtual care during dependent Mick would prefer a virtual first point of contact going forward.

More than ever tell us how its leading medical expertise robust networks and broad technology assets will be pivotal in mitigating second wave risks, providing greater efficiency of care and keeping thousands of health care professionals families and elderly people healthy and safe.

Tell us is extraordinarily well position to lead the market than that sense.

Despite some impacts from clinic closures and reduce claims our business remains strong with exploding demand for a tell a cell solutions and as a results. We continue to generate positive simple cash flow into second quarter, while revenues into health vertical including broadband connectivity were stable.

And our team is leading efforts across the entire health care system in many ways. Most of all we significantly extended the reach of our health care virtual care solutions.

There are enabling a one on one beautiful consultations with health care professionals were three pronged approach.

First.

We have the leading direct to consumer virtual care platform I belong by Telus health.

It's addressing the needs of the 5 million Canadians without a family physician today.

Avalonbay tell us out is available for free for consumers and covered through their preventional medical plants.

Initially launched NBC, we've now to expanded the service to Alberta, Saskatchewan and Ontario.

And now we significantly continue to adopt our to roll out their services across the country.

Our customer base, that's more than tripled in the last six months.

Second.

We have a leading b to b to B to B two employees virtual care platform.

Chira I tell us felt a cure is offered through employers, allowing them to take care of their health and safety over their employees like never before and it's available on demand 24 seven.

A cure on our provides greater access to care and mental health support to over 1 million people across the country.

Both platforms Babylon immature up I tell us help experience large volume increases so much that we've seen a threefold increase in the number of average daily consultations.

Consequently, how to increase our clinical staff by a factor of Threed to meet demand and keep wait times within minutes.

As a result of the surge we've doubled our customer growth forecast for both services for the remainder of 2020, we're now forecasting to reach over 420% and 350% growth increases for both Babylon immature and their customer base, respectively by the end of the year.

Third thanks to the great agility of the tell us health team.

We were able to deploy virtual visits functionality integrated into our electronic medical records or jamar within a week up the outbreak.

To date, we've now enable over 26000 Canadian doctors to conduct virtual consults with over 165000 Umar virtual visits now scheduled so far.

And just a matter of months, we've seen now a strong adoption of our jamar virtual visits functionality with a 40% penetration rate, making us bell leader in virtual console.

This three pronged approach to virtual care go direct to consumer with Babylon by Telus Health VTB too we were at your body telesales and our Jamar virtual visit enter integrated module makes us unique player in the marketplace and that clear leader in Canada.

We're enabling over 25 million Canadians to have access to virtual care today, and we're doing that with very high patient satisfaction satisfaction ratings.

Above all.

Our virtual care services are helping to alleviate the burden on our public health systems by keeping people safe safe by having them stay at home.

I think virtual treehouse capabilities to focus on the most urgent matters and allowing more proactive health care and mental health care by increasing the frequency of consults amongst other benefits.

Another way we continue to lead the pack is true our increased adoption of home health monitoring solutions across the country.

This solution enables clinicians to remotely manage monitoring care for patients diagnosed with chronic disease or chronic conditions.

Or patients that are diagnosed or exposed to covert 19, therefore, relieving pressure from hospitals and keeping patients safe at home.

As an example of adoption it's been endorsed by the British Columbia Ministry of Health, where thus far we we have now over.

1600 patients that have been or are currently being monitored for coven 19.

And deployed and we continue to deploy this solution in other jurisdictions across the country.

Furthermore.

Our living well companion direct alert by Teluss health services contribute to facilitate elderly Canadian access to 24, seven emergency supporting the comfort of their own homes.

The performance of these services over the second quarter was the strongest yet achieving a 29% increase in new customers over Q1.

This strong growth enable tell us to become the largest can you didnt own personal emergency response system service provider.

These virtual care services now complement our broader digital health portfolio of products, where we've established ourselves as the leading digital health ecosystem player.

We now manage health and wellness benefits of 13 million Canadians process claims for 60000 Allied health care providers.

Provide executive health care services for over 2000 employers support 26000 physicians to kick take care of their own patients Teluss electronic medical records.

Enable 6500 pharmacies to dispense medications be up till this pharmacy management systems.

Support 200000 can unions Yep provincial personal health records in Alberta, Saskatchewan.

And conduct 84000 patient visits per year in our 16 mid assist and copeman health clinics.

Tell itself does lead the way.

With our broad reach and integrated offering across the continuum of care from virtual care to physical consultations benefits and prescription management and now closing the loop with home health monitoring.

Also.

Caring for our most vulnerable is that the center of our cultural culture of giving.

Held for good.

Through our tell us more ball mobile health clinics brings medical care and mental health support directly to those who need at the most.

Since the beginning in a bit pandemic, we deployed or are 11 more about health clinics in communities across Canada.

To provide screening treatment and detection up though for the homeless one of the highest risk population for Kobin 19.

And now nearly 36000 onside consultations I've been realized to date.

Tell itself is well positioned for the future and as a meaningful contributor to our consolidated financial and operational performance.

We expect to see strong growth in our health care business in the wake up Kobin 19, and we're in a great position at the leading provider of health care technology in Canada.

Indeed.

We have a solid path to grow our health business as we continue to respond to increase demand for breast health care services and solutions that drive greater efficiencies across the continuum of care.

We are leveraging our core business, we are growing into adjacent markets, where we are looking to disrupt the traditional care model yard digital health technologies and at the innovative partnerships and our leading broadband networks, such as pure fiber and Fiveg.

Our digital health portfolio creates the foundation to introduce advanced capabilities like <unk> for diagnosis and treatment and by all that I I don't know that analytics for precision medicine, which has the ability to drive improvement into health outcomes and transform health care in Canada and globally.

Needless to say this represents a very exciting challenge for our tell a sell team as we are revolutionizing access to health care and creating better health outcomes for all Canadians.

I turn it over to you Jeff now.

Thanks, very much from Swan Hello, everyone.

Despite the significant challenges brought about by Cobot 19 cult international delivered excellent results in Q2.

I am so very proud of the continued resilience and the dedicated focus of our global team in rapidly enabling over 90% of our frontline team members.

If we work from home and importantly to continue providing exceptional service to our global clients during the pandemic.

Hi has continued to generate very healthy financial results, surpassing $1 billion in revenue on a year to date basis, including double digit organic growth.

We were also able to maintain strong EBITDA margins at the high end of our previously communicated 20 to 20% to 25% expectation, while also delivering robust simple cash flow underpinned by T.I.s low capex intensity profile.

These results have been driven by growth in business volumes derived from both expanded services for existing clients as well as new client growth.

This performance is even more impressive when considered in the context of how quickly government mandated lockdown disrupted our traditional service delivery model due to cold.

Beyond the rapid work from home deployment. Our team also managed our cost prudently, while driving meaningful productivity improvement that helps to bolster our strong results.

Our team and our client partners quickly embraced the new operating environment and in so doing of unlocked exciting new capabilities and success stories for our business. For example in Q2 for the first time in our history, we launched support for new clients in a 100% virtualized fashion, starting with the sales per student success to come.

Attracting recruiting onboarding and training and onto delivering exceptional performance. This was accomplished by leveraging our leading digital solutions in concert with our highly engaged team.

Our success to depend Demick has also been fueled by our diversified client base.

Right at us with meaningful inoculation during these uncertain times well certain clients have experienced challenges, particularly in the travel and hospitality space other clients such as online games and social media in particular have more than compensated with significant growth.

It has also continued to partner with tell us and many other clients to help them transform and execute on their own digital roadmap with next Gen Digital solutions, which is helping our client partners operate more effectively through the pandemic and beyond.

Oh physician and CCC that we completed at the start of this year has been performing well ahead of plan building on T.I.s track record of successful and thoughtful acquisition.

Integration activities are going very well and we're excited about the rapid scale, we've been able to achieve across Europe as well as a significant enhancement of our trust and safety practices, including content moderation has continued to be a high growth area for Ti during the pandemic, particularly in the social media space.

But all the health and safety of our team remains Paramount in all 20 countries in which we operate.

Robust safeguards are in place for our phase return to the office, including temperature check onsite medical clinics mobile symptom screening physical distancing and enhance cleaning.

Thanks to our successful work from home enablement were no rush to return our global teams to our offices. However, we will continue to work closely with our client partners and local government agencies to ensure our team members remain a safe and as productive as possible through the pandemic.

Let me now turn the call over to Doug for an update on financials, falling which I look forward to answer your questions if any doug over to you.

Thank you Jeff.

Our resilient second quarter results reflect thought leadership of our highly engaged team.

Actively embrace the new operating environment, while focusing on the wellbeing of our team members our customers and our communities.

Widespread challenges Oh that we delivered a strong status subscriber results well actively managing our financial outcomes and delivering strong free cash flow.

Our results for supported by our continued focus on driving cost efficiency and margin enhancing initiatives.

The 250 million goal that we had set for ourselves we have achieved roughly half by the end of the second quarter, we'll achieve the ratably over the next few quarters and certain of these opportunities will be permanent.

I'm proud of the teams operational execution to realize these benefits, which helped us partially offset negative cobot impacts there were outlined on slide nine of our investor presentation.

In wireless external revenue was lower seven down 7% driven by decreases in both network equipment revenue.

Network revenue declined 3% largely the result of the pandemic related impacts primarily from a roaming decline of approximately 65 million adds travel remains restricted and borders or close to.

Depending on the future timing of resumption of travel and cross border reopening the roaming recovery is expected to be slow and will continue into 2021.

Data over each was also down its customers remain home and use their Wi Fi networks, why we did experience some offsetting upside and you and voice usage you overall overage impact was negative.

Network revenue was also impacted by variants customer friendly initiatives, such as waving late payment fees and other charges.

Normalized for the total impacted Cobot 19 network revenue would have grown by approximately one dot 4%.

Mobile phone ARPU declined by five body percent. However, this decline would have been one dot to just one dock to excluding that impact.

Additionally, the mix of our customers that we loaded showed a positive trend, but 100% of the mobile phone conditions being high value postpaid customers. While we also strategically manage the pace of our our rate plan migration.

We also realized cost efficiencies are floating through our customers first initiatives, including the redeployment of resources to support those customers as well as our digital platform, which we quickly and seamlessly executed.

On in the quarter.

Our loading results this quarter were inclusive of non payment subscriber churn provisions.

And for the delayed suspensions.

Late paying accounts as we continued to support our customers through the pandemic to be more expensive specific and for contact most of the industry did not deactivate customers in Q2 for non or delayed payments.

However, we have provided for the by increasing our customer churn or the estimated number deactivations that would've occurred if not for the did alert the deferred collection activity to support our customers. During this time.

Yes provision, it's consistent and aligned to the increase in our bad debt provisions if not for these non payment churn I provision of 32000 customers our blended churn up Doughty, what had been 13 basis points lower and our postpaid churn out five nine what had been 14 basis point.

Lower.

In total our Q2 wireless.

Adjusted EBITDA decline reflects the impacts of the pandemic, including an incremental wireless bad debt expense of about 17 million related to cope with 19.

This amount at the top up from provisions we already have taken in the first quarter.

Well, we are seeing increased risk as more customers and businesses face financial hardships. However, we believe we are sufficiently provided for both bad debts and non payment customer churn.

Excluding the total impacts approach, which includes incremental savings that were realized we estimate our wireless adjusted EBITDA would've been approximately 5%.

Wireline external operating revenues increased by 17% year over year or 13% when normalizing for the 71 million gain on the retirement of a provision related to put options within the T <unk> within a T.I. acquisition.

Again has been removed from our adjusted EBITDA.

EBIT da results.

The revenue growth was given by an increase in data service revenues as highlighted by Darren.

Similar to our wireless loading our wireline net additions included non payment customer churn provisions of 23000 RG use to reflect the delayed the activation of wireline customers as we chose not to deactivate those customers for late or missed payments during Q2.

Additionally, we recorded an incremental wireline bad debt expense of 13 million to reflect the increased risk environment.

Additional provision.

And in addition to any normal growth trends.

We also undertook variance customer friendly initiatives that impacted our results, including extending promotional pricing.

Offering concessions where appropriate.

Adjusted for coated 19 impacts net and not have incremental savings and margin opportunities. We estimate our wireline adjusted EBITDA growth would have been just over 5%.

On a consolidated basis revenues up three dot, 6% or whatnot seven when normalizing for the aforementioned onetime gain.

Adjusted EBITDA declined to about 9%.

To that flow through the various tobin impacts already discussed excluding these impacts you read about consolidated EBITDA growth of approximately 5%.

Consolidated Capex of 756 million was down one got 8% over last year.

In the quarter, we took advantage of a more efficient environment by redeploying capital from some of the projects that could not be executed during covered 19 and shifted the spend two strategic projects that provided cost efficiency opportunities through supplier discounts and while buildings and other.

Wrapping et cetera, what significantly reduce in most of our our cities.

The redeployed capitals put towards fiber deployment, Alberta, fiveg initiatives and investments in our customer support infrastructure in system.

Free cash flow of 511 million increase by 187 million versus last year, resulting primarily from lower device subsidy amounts.

Tax payments that had been deferred the Q3 and lower capex.

For awareness, we deferred approximately 110 million a corporate income tax installment payments from the first half of the year into Q3.

Since you know 30 million from Q1, and 80 million from Q2, excluding cash taxes, our free cash flow increased 18% in the quarter and is up 26% on a year to date basis.

This strong free cash flow was achieved without.

Sacrificing any of our capital spend.

And is reflective of our consistent focus on sustainable cash flow expansion, which is especially important during this current environment.

And May we successfully can be completed a well received 1 billion debt offering in the quarter consisting of 600 million in seven year, two dollarsthree notes and 400 million reopening of a 30 year three dot nine five notes you'd attractive rates represent our lowest Canadian yield in seven in 30 year tenures, bringing our.

Average cost.

Long term debt Threed, Audi, 6% and our average turned immaturity shoot 13 years. The net proceeds were used to refinance early our 2021 tells corporation note maturities, which further strengthens our balance sheet and enhances our liquidity position to more than three dot 6 billion.

The strong financial position continues to support our growth initiatives as well as our strategic acquisitions to further enhance our product strategy and growth profile.

Given the nature of the global health crisis remain unable to accurately forecast an exact range for positive or negative impacts of our business and cannot.

Confidently provide official target it's time.

However for the year, we're working towards flat slightly positive EBITDA growth well also continue to expect our capital expend expenditure to be chewed up 75 billion inline with our original guidance.

Good capital spend will support our ongoing investments in the achievement of our leading network technologies to continue supporting Canadians.

And advance our fiber and Fiveg builds.

At Dallas, We believe it is not the right time now to pull back on these core capital investment in our world leading networks in infrastructure and systems that underpinned our best in class.

Excuse me customer experience, we have shown a consistent track record.

Providing an impressive returns on our capital expenditures through our high quality access asset mix, and our consistent profitable customer growth and leading customer loyalty.

At a time when our customers are communities and our country needs at most we intend to continue making the necessary investments to expand our network coverage capacity.

And expansion of products to continue our business and simplify our offer our business operations.

Importantly, we expect to continue to drive strong free cash flow.

To the bottom half of our original target of one Dot, Florida, one 7 billion.

While the remainder of the year, we'll present its own set of challenges that tell us team has consistently shown our ability to adapt and performed well in challenging times I'm confident we will continue demonstrating that through the rest of 2020 and beyond.

Robert back to you.

Thanks, Doug Mike can you. Please proceed with Chris questions for the team.

Of course, HM first question comes from Simon Flannery from Morgan Stanley. Please go ahead.

Great. Thank you very much thanks for all the detail on the color on the problems with your I Wonder if you could just talk a little bit about how how you're thinking you exited Q2 and get into Q3, where are you on store activity payment terms here. What are you seeing from the enterprise customers is just Q3 going to be.

A little bit more of a normal quarter, if based on what you're seeing so far what are the puts and takes a.

Presume or things like bad debts, and so forth, you're hopeful well progression for that so any color around that would be great and any commentary on the some of the recent moves by show on on wireless bonds. Thanks.

Thanks Simon.

Why don't I kick it off quickly on the Shaw front, and then I'll hand, it over to Jim Antal to top up in that regard.

They can also talk about store activity and I can close with a little bit of an update on the on the enterprise market in terms of Sean mobile and the launch this week.

I'm going to say somebody that I've said repetitious Lee over the years.

Tell us has a second to none superb track record on the competitive front and I think we've demonstrated that operationally and financially and in terms of the economic returns that we generated for shareholders in terms of the success of our strategies and we havent decided preference or any day of the weak for vigorous.

Competition over onerous regulation.

And when you look at the tail the tape in terms of our capability set up whether it's our world leading network superiority from pure fiber to fiveg, whether it's our leading product portfolio, whether that's the functionality of our products the breadth of our product portfolio and how that differentiates us.

What we can do in that regard on the bundling front or the inherent attributes from best in class symmetry latency content delivery functionality and our ability to deliver all of that within a customer service excellence package because of the great culture of organization the gray.

People and the way that we lead in respect of service Excellence and then lastly at the end of the day products are only going to deliver great results. If you've got great distribution channels to support them from marketing and sales through the fulfillment care and billing.

And our distribution strength is second to none in terms of the topology and clearly as App, we demonstrated by our second quarter results. Our digital capabilities are just excellent.

And that is both in its own right in terms of digital capabilities, but the way. They are also synergistic with our physical channels.

And that supports our ability to do digital go to market digital fulfillment.

Digital customer service and and support.

And so just a stop it there and then just handed over to Jim in Zeno for a little bit of additional color in that regard and I'll make a quick concluding comment as it relates to enterprise.

Jim say multiyear yeah, thanks, Darren I'll start and Zeno. Please.

First thing is obviously, we're not surprised we've been expecting shop Michel mobile launch for four years now.

We've.

Been actively bundling or base, simplifying or offers and ensuring we are simple and transparent for customers.

We possess world, leading networks across both wireless and pure fiber, which is especially important now our wireless network. As an example has significantly faster speeds and better availability in video quality.

We deliver industry best customer service driven by our team, which is incredibly engaged we have products superiority across both mobile and home.

No comparison on the breadth of services from home security virtually all over the top content and we stuck up really well on bundled pricing.

Overall tell us a significantly more points of distribution and a more effective digital experience and on the distribution front, we have over 300 stores in Alberta, and B C to less than 20 shall.

We continue to bundle or Standalone wireless space and feel that's remaining on bundled base is manageable.

And going forward, we'll continue to focus on mobile and home and our network and our customer experience leadership.

Just a quick couple words on the channel and then I'll hand, it over to obtain all 99% of our channels are operational now capacity does continue to be.

Restricted due to safety precautions.

We're seeing retail traffic is returning slowly, but still down about 30% and a return to normal we'll take a bit of time, especially in the malls with that said digital is performing really well and we'll continue to enhanced visual experience channel do you want to top up.

Sure. Thanks, Jim as Jim highlighted we certainly have expected this mobile watch from Shaw and when you look at the palace bundle, it's truly unmatched in the industry.

Each of our product capabilities from our award winning pure fiber Internet World class mobility to our superior Smart home survey, our best in class with in their Daniel.

They're based on customer centric value proposition. So the some of the parts is absolutely greater than the whole.

And then when you layer in our differentiated suite of value added products, we've demonstrated strength and enhancing customer digital lied, whether it's seen a doctor at your convenience and the comfort of your home via Babylon by tell us how things being protected uninsured online would tell us on like security or the most diverse entertainment.

Service with LTC packaging on optical and what's more in the current environment, we think customers come to experience the superiority of our networking products as well with our amazing service and place more value any capability.

We also continue to innovate and provide customers with simple and flexible service is another example of our many first in the industry yesterday, we announced a partnership with Amazon that offers prime as a benefit integrated right into the optic packaging and seamlessly accessible on our TV platform.

We've seen our product intensification strategy continued to pay dividends on both ARPU and churn and we demonstrated our channel execution in market, particularly during very difficult time.

The passion Gritten customer first culture of our team has served our customers and our business while in the POS and we believe it will continue to do so in the future.

Thank you on the enterprise front Simon that sector for US has been largely resilient our revenue is down about circa 1%.

Clearly theres some obvious areas that have been pressurized at the EBITDA level, including the wireless component of our enterprise sector. As a result of the absence of roaming.

And while there've been some sectors sadly that have been hard hit on the enterprise front because of coal that 19.

We've seen offsetting factors from growth in areas, including the public sector at the federal or the provincial and in certain cases, the enterprise level.

As these businesses or public sector is look to virtualize or digitize their operations their business models other customer support strategies and the like which is clearly the comment that Jeff was alluding to in terms of the T support that theyre affording their corporate client base.

And it's clear to me that covered nineteens going to accelerate digital transformation activities I think both tell US Corporation and T.I. are very well positioned to address this significant opportunity and so we've been focused for years on building intimacy within key verticals within.

The enterprise space and driving third wave data solutions on a data networking dedicate the ability front that include working from home capabilities and includes cloud platforms and agile I T complemented by very modern concepts, such as cyber security collaborative services and unified communicate.

Tens and what we can do for clients on the data analytics upfront and turn that information to predictive models leveraging the advent of of AI.

And I see that getting accelerated by the commercialization of Fiveg, which I think is going to accelerate this digital transformation and the opportunity to do smart things with our Fiveg networks in terms of the creation of private networks for enterprise clients by doing things like network slicing, which I think is gone.

And to be a a huge opportunity for us within the enterprise space, but also the fiveg commercializations going to support some very interesting market segment opportunities in areas like smart cities intelligent transportation and Excitingly for that tell us that organization I O T offer.

Attunitys within the Hell vertical and the AG Tech vertical.

So for US, we're pretty resilient there and looking forward the final aspect of your question.

We remain confident in the operational prospects and execution of the organization over Q3 in Q4, I think the trajectory that we've established and our ability to operate within this challenging environment is well borne out improving by our Q2 results that we've just posted.

And if you look at the quality of our loading it tell us.

Isn't just come from while wireless or wireline. It comes from both we've had excellent loading on both wireless and wireline and we've done that consistently it's not been propped up by a single product line. You know we've got good resiliency and legacy services like best in class voice erosion, we got.

Excellent performance in our staple products Internet on the wireline front end smartphones on the mobility front and then we've got excellent performance in our emerging products, whether its security health or Aiotv, I think thats, a pretty robust portfolio at the end of the day and the other thing that I think is key for investors is.

It's all about loading as quality loading so it's not about the vanity of leading on RG use it's those RG use translated into economic value creation for investors because they had the right economic attributes to begin with because of that quality loading thesis. So I think our leadership team is confident of the.

Prospects of the organization operationally going forward.

Thanks Mark.

Next question please Mike.

Sure next question comes from just fine from Scotiabank. Please go ahead.

Thanks, Good afternoon helps going as well.

Just one other follow up on Jim's response on the shell mobile question regarding bundling if we're trying to.

Got to unpack, how much bundling you've done over the years can you help us a little bit on that maybe the perspective, but look at it.

The CR Tc says that tell us about 40%.

Roughly wireless share in BC, and Alberta, I'm just wondering within your.

Internet base is that materially higher.

Yeah that would insulate you from any any competition from Shaul.

And then I guess, a quick question on the digital capabilities that you mentioned them terminals alluded to as well any learnings from your customer behavior, what they're doing all the digital fun, particularly related to loading and upgrades.

You see this digital advantage continuing even as stores start to reopen as we go through the backup for this year and maybe even into 2021. Thanks.

The Jeff I'll, let.

Jim Antal, a top up on that I'll caution them to be.

Good careful on the competitive disclosure of front, but they'll both handle that very adeptly and Tony why don't you respond to Jeff's question in terms of digital excellence continuity and what it's meant organization and what it looks like going forward and how it differentiates us.

Okay.

One on one and I go first.

And then ended over.

So Jeff we've been actively.

Actively cross selling our base now for several years and a lot of success on it.

Obviously, I I'm not I'm not it's competitive competitively sensitive how much of the base is bundled what I would say is.

Very manageable.

On bundled base right now so.

We're very comfortable with where we are.

Our customers.

I have really responded well to our bundling and I think that's been one of bar.

Areas of Great success. So you know, we're feeling really good about where we are and we.

We are seeing very good customer reaction from our bundles and especially when you tie that back to our superior wireless network and our superior fiber network.

You know the customers, that's really resonating with request so I'll leave it there and let you know that we're confident.

So sandal did you want to.

GAAP up or should we handed over to Tony for digital.

Yeah, maybe I'll just make a couple of top up point. Thanks, Jim So I I spoke about this strength at the individual products in our bundle and I think what drives our capabilities is that now were able to leverage dosing and individual and differentiated product strength across elements of the bundle and.

I think we also provide our customers with significant flexibility to dial up and dial down within the bundle. So those those are areas that separately resonated with our customers and coupled with our excellent channel execution, we've seen really significant progress in our though.

We need a bundle and me.

Growth in our capability quarter over quarter, So I'll leave it there and I ask Tony the top up on the digital.

Thanks, Thanks, I know I'm Jeff.

A couple of things about the digital well we've been investing in our platform now for a number of years and I think you can see when we executed on our peace of mind and device financing plans last year. We we didn't rushed to the first to market just for the sites, where we waited until we had an end to end type of it.

Okay that we were satisfied with work for us and for our customers and give them a great experience and we've used that mindset as we've developed capability as we watch the emerging pandemic issue is growing at the beginning of the year, we read it our platform. We made sure it was robust and could step up to the volumes, we would expect that would become.

And you can see from out Q2 results for that work well for us relative to our peers.

Turning to the real important part of what's going to happen next is not that.

Things will return to normal it how does this orientation to that channel capacity enhanced the customer experience and how do we.

On June that so make sure more and more as customers once or exact business digitally or were there for them that we think were we're in a good position right now we're not resting on our laurels. We have they have very tight plan of how we expand our capability and where we focus and what you can expect from tell us is a consistent execution.

We got.

Great. Thanks, everyone.

Jeff I would note as well that as we amplified digital throughout co vid.

We also achieved the highest customer satisfaction survey response in the history of our organization.

Which proves that you can achieve the duality of leveraging digital and enhancing the customer experience simultaneously.

Over to you Robert.

Thanks, John or make next question. Please.

Of course next question comes from Vince Valentini from TD Securities. Please go ahead.

Yes, thanks, very much Doug you mentioned.

32000 subscriber number in wireless and a 23000 subscriber number in wire line I'm not sure if I heard your incorrectly, but I think you said that 23000 subs in wireline were not treated as disconnects because they're there hadn't been paying but I think thats Rog you can you just clarify you did take out 23000.

ABS and you still we're able to put up these these strong numbers in wireline.

ABS, Doug Doug, It's really important that you get this explanation cleared because I'm going to have an embolism. If you don't if that gets misinterpreted I'm going to be a very grumpy bear.

Yes, I mean did take them out of our base and it did increase churn so our our nets were reduce or that amount.

Perfect.

And George I forgot the rules here, so dare to all I'll put this you can put it to Doug after the those 23 in 32000 figures I mean that just make sure.

And your numbers of show impressive I mean postpaid churn at 0.4 or 5% is something I don't think any of us thought wherever possible.

Can you give us some context here, though it these numbers elevated because of covidien, but they wouldn't have been zeros in in the past there's always some level like that 32000 on the wireless I can you give us any context of what it might have been and in Q2 last year.

The Doug why don't you just.

Walk everyone through the numbers one more time, and then I'll make a couple of comments as to what the ingredients are behind those results and given that your our chief customer officer, Tony I'll afford you the opportunity to top up.

Thank you so so Vince you're right. It was 32000 as a reduction in in the wireless space and 23 in wireline split between now the Internet TV and voice product and in the past the numbers, where we havent I don't have.

The exact numbers at my fingertips, but they are very close and the same products they've been previous previous quarters of.

Non payment disconnect. So it would be plus or minus a small amount, but not so.

Not materially different.

Vince key ingredients and I'll quickly handover, you, Tony but the performance culture of the organization.

Clearly is coming to the forefront year secondly, we've never let up on our progression path of continuous improvement on customer service excellence and the traction that we're getting in that regard it just terrific and the specificity of our actions.

The quality of the service from the transactional through the fulfillment component the fantastic job that Jim and Zainal have done on smart simplification, which is such a customer friendly thing to do a along the way the intimacy over a one to one marketing.

Our retention activities Uh Huh I've really been born out along the way.

We have gone from rudimentary on bundling two per efficient on bundling to sophisticated on bundling.

And the mathematical correlation from one product a dual product a triple play Quad play quintuple play in the light has really driven churn or through the floor and it's been extremely potent to say the least for our organization in that regard.

We have driven hard as it relates to network excellence and the fact of the matter is.

Kobin 19 is taught Canadians that fiber matters.

And Intelisys case, pure fiber, which means fiber to the Hong you know is the medium of choice in terms of connectivity given that people want to use that internet connection for everything from teleworking ER to network gaming and so they want the not just the downlink speed, but they want the uplink speed of Theyre doing business.

And they want low latency, if they're gamers along the way and fibers has been a massive differentiating factor if people don't want to give it up they want to get it and they don't want to give it up and you know I've I've board the Hell out of all of you with the accolades in terms of our wireless network from speed to the coverage to reliability on DCR.

So far.

And it's going on for years now I mean six years in a row as it relates to okla in that regard and and reliability and speed matters, the customers and they want to stick with us in that regard. If you look at our digital capability set and the comment I made earlier here, we are providing digital and it's not just speed of trends at.

Action or cost efficiency of transaction, there's clearly a demographic out there that's digital native that prefers digital their mentality digital first then that's the way they want to transact with us and we provide that experience and for them. That's an l. to our accretion that's better customer sat then the human contact.

And sort of be other provide that capability and get the uplift on service you're seeing that him in the stickiness of those relationships at the end of the day and then you know here we are with the social capital is in company.

No one get anywhere else in the world better than tell us the symbiotic relationship between customers and community.

And clearly our customers understand that word there for their community.

And that their patronage of Telos goes back into their community they get that symbiotic relationship. So when they have a choice as to where they're going to spend their money. They think Wow tell us we've got the best network. The best customer service. It deals with me with the best technology at the end of the day. It gives me the level of you know supporting it.

Missy that I want.

And the money goes back into my community to make a difference for for my family now those things in form of People's choices and here. We are as an organization where you won't find this very many other places in the world, but the better biggest can competitive model.

I would tell us internally, it's who delivers better customer service onshore or offshore no offshore for us isn't about labor arbitrage is both customer service excellence to complement the fantastic customer service that we do domestically to complement what we do want to digital basis and these things are getting borne out in our results which is.

Why when Tony talks about you know this isn't something that is just made for cove. It.

This is going to be the operational way of life prospectively, and we feel we're well positioned.

Tony you want to top up.

Well I'll try and find something outside that Darren. Thank you I think having Vince what we've demonstrated over the last six years is consistently outlining our peers on a qualitative basis with our odd years I'm, particularly building off the investments, we might NPO fiber and I'll talk well costs Wallace.

Infrastructure and if you consider this year you know not only was our digital channel ready to go and we think is wholly responsible to drive traffic intermodal stores when theres a cobot pandemic. So we were able to make sure we kept our customer site for Mike to transact in field operations very quickly in March.

We withdrew from crossing the customer threshold and developed within 48 hours or restriction and ability to deliver what we call a virtual technician model of supporting the customer in the us in this self install a true I video uplink and through some I all technology deployed to help customers are coming.

Inside the home work and we had expectations is that this would be.

Sort of 50, 60% successful and I have to say you know we went from a high yield where you know me in a hiatus about yield on truck rolls dropped to 60% on the first few days of deploying this but the tell US patent is really to to consider understand whats happening refine improve a move on and within a month, we were back into the high.

Ladies and in fact, we ended in June with the highest yield on our Bachelet social assistance model without tax without any crossing the threshold and now we can do that but what we do now as we monitor communities and if there are outbreaks, we focused right back to the no crossing the threshold, we want to keep our team members and our customer site and similarly enough.

So sensors over 4000, Cosiness team members, well pivoted straight to work from high not including what we did immediately thereafter on out CLL team and we go right response from our agents as we set them up when they were able to pickup seamlessly on support our customers and we now have a.

Operating model for the future that we will refine as we go forward. So we're very confident that weather phase three comes along and starts disrupting the traditional channels, we have the ability to pivot onto alco that might have operations with the enhancements, we're making all the time, we not digital channel now is a significant.

Translation, and we didn't lose abate and building a building out you fly the strict Q2.

In fact, we found we made more progress in some of our out of those if we would normally do given the light traffic that Doug mentioned earlier on where we are ready to release those properties to our marketing team and try delivery team. So we are highly competent miss the slowed in projection trajectory that we have is consistent sustainable and we know we.

Got the best execution in the business. So we're we're fairly comfortable.

Thank you.

Mike we have time for two more questions. Please.

Of course next question comes from the bump Maher Yaghi from there's a today. Please go ahead.

Thank you for squeezing me in so I wanted to ask is since the beginning of the pandemic we have seen.

The value of health technology companies increase significantly and many companies have been able to get external financing.

In the past you always stated that the Iowa as more of the immediate focus for you when it comes to.

Tapping the capital markets has.

Significant increase from the different provincial governments usage of your health solution.

May make you change your mind or accelerate maybe the plants, where pellets health to.

The capital markets to get into the new growth opportunity.

And my second question is regarding your cost structure.

We've seen.

As you mentioned, you lost 58 million close to $58 million, but because of lower roaming revenues.

I have also over its revenues that.

Probably affected your profitability what actions can you take.

Maybe to realign your cost structure, because it might take time for you to get back those revenues given that.

The pandemic doesn't seem to be letting go.

Thank you.

So Francois why don't you speak to the first question Doug you can take a second question and.

All top up on anything thereafter.

Thanks, Darren Thanks for the question my earlier I.

You're right I think we're seeing very strong valuations in the marketplace.

But let's say a couple of things. The first one is were entirely focused on serving our customers are responding to exploding demand.

And leveraging.

The multi platform and three pronged approach that we've developed.

Maximizing our growth potential in the marketplace and serving customers and Canadians.

The way they need to be serve or deal with it the way they want to be served.

Either directly or through their employers or through the.

The physicians there they're used to.

You're seeing.

We are we're seeing also well a lot of.

Companies in the marketplace focusing.

On on.

Customer growth at the expense of <unk> <unk> <unk>.

Business model that makes sense. So you look at plays into U.S., you know that are trending on a on a revenue multiple without any kind of profitable business model. That's not the way we're going out at that tell us that is in very much a sound business model that but we're putting together here.

And again leveraging the.

The strength of our distribution capabilities. When you look at whats Zeno is doing on the wireline front or what Jim is doing on the wireless front or maybe in a row and David charm are doing on on the beat to be front, it's really integrating our virtual care capabilities.

Isn't solutions.

To reach the biggest number or the largest a number of Canadians and that becomes part of our bundled approach.

And really and enhances our relationship with our customers when it comes to.

Monetizing or benefiting from.

You know doing an IPO I think you know that's for further down the line I think we're not focus right now and that kind of valuations you're seeing in a marketplace, that's not what's driving our our strategic priorities.

But Doug Darren you may want to top up.

Maybe I'll go ahead, Doug and and pickup on the cost front or anything you want to San Health and then I'll close quickly.

Excellent so on the on the cost side over the past three months as we've been going through Kobe, we've been.

Any lucky not our operating mode, and which of the learnings or we can we take from the situation.

And make them permanent which are the initiatives that we had in it started on customer experience on digital it you heard from Tony are we going to even accelerate faster.

What the underlying theme a customers and team members need to be looked after and protected along the way.

So there is definitely <unk> cost opportunities that we've been working through in our future mode of operation.

Digitization and looking at are easier to business with is obviously wine.

The benefits of fiber, we havent fully.

Utilized yet either with the a reduction in truck rolls with the.

The synergies and efficiencies that come with fiber and it's still a significant opportunity as we move forward on.

More customers on our fiber network and then there's going to be the that that direct impact of real estate costs and other color overhead costs. Good if we change the dynamic or our flexibility with our team members that I will be balancing out all of that I call. It more.

For additional overhead to the more fluid workforce. So those buttons, there would be that top of mind right out of the gate.

But there is a list of many more they were currently working through that means we started to identify and and plan for from the learnings are covered overall.

Just a on the.

Health front.

I would ask you to take your comment as it relates to those players in the marketplace and re engineer it as to what it means vertellus.

So if you're seeing those valuations out in the marketplace with other players.

Take the math of those valuations and apply it to just a component of our overall tell us help business.

Within the virtual care area to be more specific I think you'll get some interesting map as to what the valuation implications are for tell us given our position in that market. Secondly, I would say that that valuation to tell us should deserve a premium.

For two reasons number one.

We've got an integrated portfolio. Unlike our competitors in this space who are single product players. We've got a continuum of solutions from product perspective across the totality of the primary healthcare ecosystem, and secondly or profitable.

So you don't have to weigh in on negative EBITDA would tell us where EBITDA accretive and so I think that give us, though a premium on us as it relates to taking those implied valuations.

And doing an application of that to our tell us how business in terms of just one particular segment on the virtual care front.

Secondly, look at our market coverage.

Again, I could talk about tells helped more broadly, but given that your questions related to virtual care, let's burn in on virtual care, we have a direct to consumer offering on Babylon, where are we not even hit our growth stride. Yet we're just opening new markets as we speak on a provincial basis, we have a business.

Two of business to employee business to employer to employee solution with the Chira and then we have a virtual visit solution for docs with whom we've got 26000 plus relationships across Canada in terms of dr. patient or physician to patient relationship so doesn't matter what your.

Flavor of virtual care is whether its direct to consumer whether its b to b D or whether its physician and patient we covered the totality of the landscape and I would say that's pretty good competitive positioning in that regard.

Thirdly, you don't always have to access the capital markets or to create a paper capability within your portfolio at the get certain things done at a corporate development level, we can create some vehicles within healthcare and leverage the paper of those sub vehicles the support any astute corporate development outbreak.

Since that we have in terms of pursuing what we think are attractive market consolidation opportunities.

And then lastly.

In terms of the capital markets, let's stay focused on getting T. I got.

Do you guys worked really really hard delivering fantastic results building, great assets with a great management team to earn the right to take the business public and establish a transaction currency, which will amplify the addressable market of growth opportunities prospectively.

Looking to get that done in the next 12 months and that's right now what we're focused on in terms of accessing the capital markets in servitude to the T.I. strategy and I think T.I.s performance in general and T.I.s performance through co bid.

Makes that particular aspiration all the more exciting I think that trajectory. That's been established in terms of operational performance customer service performance and economic performance bodes well for our ability to tap into the capital markets all things being equal in the first half of 2021 and our goal.

So here is to be ready to go and then go if market conditions allow and if not then let's be patient that's not something that we have to do it's a nice to do you know and we'll get it done when the right conditions present themselves and post that particular move then I think we can look at other activities as it relates to how.

Ralph and the capital markets or AG Tech in the capital markets or trading paper currencies that we can use smartly to pursue our position that we want to develop within those key verticals. So that's really the essence of the strategy.

Thank you very much.

Thanks, Matt Mike We have time for my question. Please.

Sure next question comes from David Barden from Bank of America. Please go ahead.

Hey, guys. Thanks, so much for squeezing me in a appreciate it I guess is that two questions.

First Darren in the press release. It there was some verbiage that said you were hopeful that you'd be able to get to your targeted dividend increase if the board allowed it I was wondering if you could kind of elaborate a little bit or what do you think the Keith.

Board will be looking at to kind of evaluate whether they will or won't come to support that and whether that's just about kind of third quarter performance or maybe how the uncertainty of the forward 12 months, Mike we factored into that decision, making and then the second question. If I could would would be just you guys. Obviously launched here five deep product.

This past quarter you that's the.

Last month, no sampling of the strategic partner I was just wondering kind of you could elaborate a little bit on what actually happened, which spectrum bands how much spectrum.

One vendor all vendors I was just kind of interested in kind of understand where we are because we're going to be throttling 26, new cities open that's been here. Thanks.

Okay, David let me hit it.

The reason why were specific on the quote in that regard is because as we communicated for 20 years.

The dividend decision is the provenance of the board.

And that decision is made by the board.

Based on recommendations from management on a quarterly basis, and I never want to use surfeit, which is why we're always very formal and the way that we present, our pros are nomenclature in that regard as it relates to the dividend both current and prospective.

What measures does the board look at and these measures are not meant to be static, but dynamic so both at time, t. and whether going at T plus at the board looks at the EBITDA robustness in terms of what's been generated in quarter and what's expected prospectively. They look at free cash flow.

Generation again in quarter as well as prospectively, they look at where we are within our dividend payout ratio guidelines.

And what that portends, a on a perspective basis.

They are also stewards of the balance sheet and take into consideration net debt to EBITDA and the like a and then they don't want to make just a static decision in terms of what's good for a quarter or what reflects what happened within the 90 days the other quarter they want to be more dynamic the not and look at the sustained.

Ability of what we're proposing because that's the way that we manage the business so in making the adjudication. They look at the hearing now of those financial parameters that I've, just articulated and how we would expect them to evolve 12 months sense.

And then lastly, they taking into account our represent representations to the street.

So what matters to the board we've had a fantastic history track record.

Returning money and delivering against expectations to investors, whether it's our operational and financial targets or whether it's our dividend growth model.

And we've had a fantastic run in our dividend growth model and the board take that responsibility very seriously.

And it's something where it means a lot to the organization to be able to generate the results from the elements of our strategy that we can honor the representation. So the expectations that dividend growth model and if it's possible to do that we're going to do it which is why we chose the words quite purposefully you know, we're hopeful that we'll be able to meet our debt.

Dividend growth model expectations or exceed it when it comes time to announce our results in November and you know the only other data point I would give you to draw in Prince from is our trajectory on the Q2 front looks pretty healthy and so I'll I'll draw a line under it there and.

You know I would ask you how many other organizations.

Around the world not just within the telco sector give the level of forward looking disclosure that we do on our dividend growth model. Both in terms of multi year longevity and specificity as it relates to the dividend growth accretion I think we're in a pretty unique category in that regard and it's even more.

More unique when you consider that we have delivered against it year ending year out quarter ending quarter out since 2011, I don't think anyone can match that particular track record.

I missed.

Your comment on the on the spectrum front could you just reiterate that question for me sorry.

Well thanks for the color Darren Good question was really around the Fiveg launch announcing what actually happened in terms of which spectrums got launched how much spectrum is yes, that's a involved.

Et cetera.

Okay. So as it relates to the launch launches at the one dot seven gig level with 600 megahertz getting operationalized within key rural areas in the second half of Twentytwenty. Our current launched speeds are one Doug seven gigabit.

Our second across the topology of Toronto, Montreal, Vancouver, Calgary, and Edmonton, our coverage is around 16% that became population as I said my remarks, we're going to augment that by 26 municipalities over the course of the year, which we'll take our coverage up to about 30% the came population through.

Route network development and improvements will be able to buttress that one dot seven gigabits per second to be about one dot nine to gigabit per second as we look to exit 2020 in that regard look for us to participate in the mid band spectrum.

Which the government hi slated for mid 2021, that's clearly a important global ecosystem in terms of those frequencies and our ability to secure a large swaths of those frequencies to continue the fiveg marathon, because it's a marathon not at sprint as it relates to improving the commercialization.

Okay, and getting more bang for our box on the Fiveg speed front, along the way all the way through to what will come thereafter on millimeter wave spectrum auctions on the 28 to that 30 gig 40 gig 60 to 70 gig and the light I think for tell US This is a.

A huge advantage in our regard because again when it comes to new technology deployment, we have a track record second to none I'd number two we do it from urban to rural Hence my comments about Operationalizing, our 600 megahertz spectrum.

Within Alberta, and B C and to back over the latter half a 2020 in terms of bringing fiveg into the rural diminutive, Canada, which is critical for both business productivity and social services along the way.

I think what's also very exciting and unique about Fiveg vertellus is that we've got the fiber fiveg advantage, so our fiber network being so pervasive.

You know hitting 80% of our internet footprint by the ended 2020 that is extremely synergistic with fiveg in terms of amplifying our fiveg capabilities on backhaul wireless redistribution and frontal wireless deliberate leveraging our fiber connectivity. The other thing that a lot of people.

Don't get is the integration if you will between the Fiveg evolution and the Fourg platform and never has an organization built off of such success at the Fourg level, whether its world, leading speed world, leading latency world leading coverage world.

Leading reliability at the Fourg level that really underpins a jump start performance on the Fiveg launch so that we will be best in class when it comes to speed coverage and reliability out of the gate and we will be pervasive in the deployment very quickly.

Great, which again brings me to another one of our distinguishing attributes which is our network sharing relationship with Bell, which allows us to deploying new technology twice as fast because we're tapping into two labor pools, and we're splitting the geographic deployment responsibilities along the way and we can get it done more.

Currency cost efficiently, because we're using to balance sheet, rather than one and so those three things are really pretty important leveraging the network sharing relationship and the scale and scope economies that it gives us leveraging the performance excellence of our Fourg platform as a fiveg springboard and.

Leveraging the synergistic relationship between fiber and Fiveg and then lastly, one of the things that we want to do on the commercialization front is make fiveg not just about speed speed speed or dissymmetry considerations or the coverage, but what can we do on the product development front, how can we specialize depth.

Product development for the verticals that I talked about earlier when I was answering Simon's question, how can we lead the world on the data analytics side of things given the balloon than a data the fiveg is going to generate and how can we monetize that data by making a meaningful for our customers in a way that helps them answer.

Their business challenges. So that's really the path that were on now one does seven gig 600 megahertz mid band spectrum, and then millimeter wave thereafter, and we're not going to give up our leadership, Matt when it comes to speak coverage and the liability.

Thanks Darren.

Thank you everyone for taking the time to join us today.

Please feel free to reach out to the IR team is there any follow up questions and in the meantime take care and for those of you in Canada. We wish you a very enjoyable long weekend.

Mike over to you.

Ladies and gentlemen, this concludes that tell US 2020 Q2 earnings conference call. Thank you for your participation and have a nice day.