Q3 2021 Telus Corp Earnings Call

November 5, 2021

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The conference is now being recorded.

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Good morning, everyone and welcome to the <unk> 2021 Q3 earnings conference call.

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

Hello, everyone and thank you for joining us today, our third quarter 2021 results news release, MD&A and financial statements and detailed supplemental investor information were posted on our website. This morning at <unk> Dot com slash investors on.

On our call today, we have remarks by Darren Entwistle, President and CEO, John Raines incoming president of tell us agriculture churn.

<unk> E V P mobility solutions, and Doug French EVP and CFO. In addition for the Q&A portion of our call. We will be joined by Daniel now G. E V P home solutions, and Tony Garen, EVP and Chief customer Officer.

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

Claim any obligation to update forward looking statements, except as required by law and we refer you to the risks and assumptions as outlined in our public disclosures, including our third quarter 2021, MD&A, our 2020 annual MD&A and filings with Securities commissions in Canada, and U S with that over to you Darren.

Thank you Ronaldo and Hello, everyone.

For the third quarter, our team once again achieved strong operational and financial results.

Our ongoing execution excellence continues to demonstrate the consistent combination of industry, leading profitable customer growth and strong financial performance coming from across our business.

Our robust performance reflects the effectiveness of our globally, leading customer centric culture and broadband networks underpinned by our highly engaged team and their passion for delivering outstanding connected experiences.

This contributed to a leading total mobile and fixed customer net additions of 320000 in the quarter, an all time quarterly record for Telus supported by industry best client loyalty across our key wireless and wireline product lines.

Notably blended mobile phone pure fiber internet object GB security and voice churn are all below 1% on a year to date basis.

Moreover, our results, we're buttressed by a highly differentiated and potent asset mix geared towards high growth technology oriented verticals, which I'm going to elaborate on in just a minute.

Looking at our consolidated financial results for the third quarter, we achieved industry, leading year over year growth.

7% across both revenue and EBIT and when excluding the impact of share based compensation at G. I R Q3, consolidated EBITDA growth would have been 8.5%.

This performance is illustrative of our unmatched capabilities and competitive position that we will continue to leverage to our advantage as the economic recovery progresses.

Looking now at our mobile operating results.

Telus achieved robust industry, leading customer growth of 245000 net additions.

The 25% on a year over year basis.

This included 135000 mobile phone and 110000 connected device net new customers.

24020, 3000 on our respective basis.

Impressively connected device customer additions represented an all time record high for our organization something to build upon yet again going forward.

Notably with respect to this momentum on connected devices <unk> was recently named GM candidate five G network provider for their onstar connected vehicle service.

This represents the first time GM has selected a domestic communications company to provide connected vehicle services for their Canadian customers.

This historic Alliance will leverage the skill customer centricity and passion of our collective jeans and a potent combination with our expanded world leading <unk> network to enable an unparalleled experience that will keep GM customers and our fellow citizens safe and.

Connected.

Importantly, our team yet again delivered another quarter a best in class loyalty results.

Blended mobile phone churn was zero debt, 9% an improvement of nine basis points over this time last year.

This performance is backed by strong digital capabilities and superior service offerings over our world, leading broadband networks and potent customers first culture that has served us so well.

At a time when the human connection continues to be more important than ever <unk> has been named the fastest mobile operator in Canada by U S based <unk> for the fifth year in a row in their Q3, Canada market report for 2021.

In addition, our team earned the top spot in six of the seven category and UK Open signals August 2021 mobile network experience the Canada report.

Notably open signal bound Telus as wireless download speed of 73, nine megabits per second at least 6% faster than the second place finisher and close to 30% faster than the third place finisher.

This represents the 10th time <unk> received a top ranking from open signal, including being recognized as having the fastest mobile network in the world in 2020.

A true reflection of the incredible expertise and dedication of our entire team led by aerospace auto.

With the ongoing operationalization of new spectrum and expansion of our National <unk> network catalysts will continue to offer Canadians globally, leading network reliability globally, leading speed coverage and low latency.

These technology attributes matter.

Because they drive continuous innovation that enables the diversity the productivity and the competitiveness of our country's private sector supporting economic growth and job creation and sustainability.

Additionally, these technology investment in our network strengthening connections to help us answer societies, most pressing social challenges challenges that were looking to answer and help education food security and environmental sustainability.

Whilst improving economic equality for the benefit of all Canadians.

Closing on mobile network revenue was up 7% reflective of our focus on high quality customer growth and excellent base management.

In a few minutes Jim's going to have the opportunity to provide further commentary on our outstanding results within our wireless business.

Turning now to our fixed operating results.

Daniela and her team once again delivered impressive wireline data revenue growth of 13% supported by great results in the beta beachfront from Nuveen and his organization.

This ongoing data revenue expansion was supported by another quarter of robust customer growth.

Third quarter Internet net additions of 46000 represented our best third quarter result, compared to all pre pandemic period since 2003.

In spite of being down slightly compared to Q3 last year, which was of course flattered by pandemic related impacts.

Importantly continued double digit residential internet ARPA growth boats exceedingly well for future lifetime economics of our fast growing fiber based internet product line.

Telus continues to drive strong TV attach rates with TV. Net addition of 10000.

Notably we remain the only provider in North America.

<unk> delivered positive GDP growth quarter in and quarter out as customers recognize the unique value of our flexible packaging and integrated over the top streaming.

Whilst residential voice line losses of 11000 were up slightly over last year when market activity was muted in the early stages of the pandemic.

A leading security and home automation. Net addition of 30000 increased by 12000 compared to one year ago, reflecting the strength of our digital capabilities and continued expansion of our home and security automation bundle.

In total we achieved robust industry best overall wireline product net additions of 75000 in the third quarter of 2021.

This was driven by our unique and highly attractive bundled offers available to customers across our superior product portfolio as well as our strong customer loyalty coupled with our team's focus on leveraging the distinct competitive differentiation inherent.

And our expanding pure fiber network that Tony and the team have been building.

Indeed fixed net additions continued to be enhanced by our significant investment in fiber and <unk> wireless technology, including our ongoing accelerated broadband expansion program being steward steward it by Tony and arrows in there.

Teams through 2022, that's yielding such significant beneficial results for this organization, both operationally and economically.

The generational investments will fuel and had customer growth and operating efficiencies and drive positive cash flow benefit as we complete our expedited broadband build and retire our remaining copper infrastructure in the next 18 months.

This is going to be a unique accomplishment in the global telecommunications sector.

Turning now to tell us to help our team drove double digit year over year health services revenue growth in the quarter, whilst achieving important milestones as we continue to meaningfully scale our health operation.

This included reaching over 19 million lives covered an increase of over 20% on a year over year basis.

<unk> nearly 138 million digital health transactions during the third quarter alone.

And finally, adding close to 1 million new virtual health care members over the last 12 months, representing a 64% increase over last year with $2 3 million members now using our virtual care solution.

<unk> will continue to leverage our leading position in healthcare technology solutions did deliver improved health outcomes for its citizens through access to better help information, which of course has never been more critical.

Furthermore, Telus agriculture or tag through our team's ongoing efforts this scale and integrate this unique business. We remain on track to generate annual revenues in agriculture in excess of $400 million in 2021.

We will continue to expect this business.

To drive double digit expansion in revenue and EBITDA contribution clearly illustrative of the value we are creating as the globally, leading provider of agriculture technology solutions.

Earlier this past week, we announced John reign, as the President of <unk> agriculture.

With over 20 years of global experience in digital Agriculture data science and farming John is exceedingly well positioned to lead the ongoing evolution of this critical area of our business.

Indeed, leveraging his tremendous expertise John will focus on driving growth opportunities throughout our agriculture business.

Using technology innovation artificial intelligence and human ingenuity to optimize the agribusiness production chain.

<unk>, helping farmers and ranchers to produce and deliver food for the worlds ever expanding population and to do it more efficiently more effectively more safely and of course more sustainably.

I look forward to supporting John and <unk> agriculture team and further progressing our goal of connecting the entire agricultural value chain with smart secure end to end technology and software solutions to ensure a safer and more nutritious.

Food supply for citizens around the world.

Following my remarks, John will share a few words regarding his vision for <unk> agriculture.

Overall third quarter revenue for T. Chek operating segment increased by more than 4% on a year over year basis.

While EBITDA was up.

<unk> of 7%.

Or 8% on an organic basis.

Doug is going to provide further details on our T chek financials in just a minute.

Turning now to our <unk> segment.

Earlier today, <unk> announced strong double digit revenue and EBITDA growth with increased profitability for the third quarter.

These continued strong results demonstrate ti position as the partner of choice for Premier digital customer experiences for our clients around the world as they look to our talented team to deliver and and Nextgen digital solutions and services powering a dip.

<unk> customer experience.

It does include a unique and unparalleled mix of content moderation data adaptation and artificial intelligence capabilities.

Doug It's also going to provide further details on <unk> financials during his commentary.

To conclude our significant ongoing broadband network investments further enable the continued advancement of our financial and operational performance strengthening our confidence in the robust outlook for our business and the long term sustainability of our industry.

Leading dividend growth program.

The five 2% dividend increase announced today represents the 21st since 2011 with our programme now unbelievably in its 11th year.

Since 2004 <unk>.

Telus has now returned more than $20 billion to shareholders, including over $15 billion in dividend representing approximately $15 per share.

Future dividend growth and affordability will be buttressed by strong EBITDA growth and value creation in our core Telus Ti health and agriculture business it.

It is also going to be supported by lower future capital expenditures.

With the preliminary guidance, we have provided for significantly reduced capital investments of $2 $5 billion or less beginning in 2023, and the meaningful resulting free cash flow expansion that we expect and that we are going to deliver as an organization.

<unk> and do so on a continuous prospective basis.

Finally, I'd like to take this opportunity to recognize our Telus team members and retirees, who continue to demonstrate their on wavering support for our communities and they do it better than anyone else globally.

Reinforcing our long standing dedication to working collaboratively with indigenous communities.

In September we introduced <unk> reconciliation commitments.

Developed in partnership with.

And in support of indigenous peoples across the country. Our commitment to reconciliation act at the cornerstone of our action plan and other related activities moving forward.

By way of example in October we launched our Telus mobility for good for indigenous women at risk program.

Through which we are providing free smartphones and data plans to indigenous women at risk or surviving violence.

In addition, this week <unk> announced a 1 million dollar commitment to digitize.

Remote and distribute the interactive authentic experience of the witness blanket in partnership with the Canadian Museum for human rights and indigenous artists carry Newman.

Created to pay homage to the children and families impacted by Canada's residential school system.

The original witnessed blanket is a 12 meter long art installation that features 887 objects gathered from 77 residential school communities across Canada, such as letter.

Photos stories clothing art and fragments of building.

Our team's efforts will help to ensure that digital witnessed blanket will have a lasting and powerful impression on every Canadian standing as a national monument to recognize the atrocities of the residential school era and promise to truth, telling going forward.

I remain exceedingly proud of.

And grateful for the entire Telus team for their exemplification of our leadership in social capitalism as we deliver outstanding results for all of our stakeholders.

On that note I'd like to turn the call over to John John over to you and welcome to tell us.

Thank you Darren and Hello, everyone, it's an honor to be invited to the call today.

I'm very pleased to join such an outstanding organization and accelerate our work in data science across the agricultural food chain.

One of the reasons I'm, so excited to join tell us.

Is the company's unique position as a pure play data science and digital agriculture business.

This offers us a tremendous competitive advantage.

For some perspective, the world Economic Forum estimates the global AG industry at approximately two and a half trillion and the global food industry at over eight trillion.

I believe tell us AG is well positioned to capitalize on this amazing opportunity through significant new value creation across the agriculture food chain.

As a data science company, we have the opportunity to deliver a whole new level of lead generation data insights they serve farmers and agriculture retailers as well as grocers.

And consumers generating value from the farm gate to the dinner plate.

The other reason is that tell us agriculture, social purpose really resonates for me My family is actively involved in production agriculture annually growing corn, and soybeans and tenant farming cotton and peanuts.

Agriculture is truly my life's passion.

<unk> mission to ensure a safe secure and plentiful global food supply for future generations is very meaningful and I'm glad to be a part of making that happen.

Over the course of the next few weeks I'll be working closely with the tell us AG leadership team to quickly get up to speed on the business and ensure we deliver on our commitments in 2021.

And then as importantly, establish actionable plans to accelerate our business in 2022 and beyond.

I look forward to speaking to you again soon.

Thanks, everyone and Jim over to you.

Thank you John.

The third quarter, we achieved another strong set of mobile customer additions and loyal group results.

Total Q3 mobile phone customer additions were 135000 up 25000 year over year.

Bringing our year to date total to a healthy 255000, and that's up 25% over the same pandemic period in 2019.

Customers see our value.

Network and customer experience leadership.

Investment in local communities and offering valuable services for the entire household.

Zane, Illinois, and our teams.

<unk> had an incredibly strong working relationship which is driving great product intensity outcomes across mobility and home services.

Product intensity combined with our customer experience.

Helping tell us lead the industry in mobility churn as Darin shared earlier.

2021 will mark the eighth straight year of <unk>.

Postpaid churn below 1%.

And our year to date postpaid churn result is only zero down 7%.

Sustained low churn enables us to focus on high value customer growth.

We continue to focus on profitable customer growth avoiding an economical promotional offers especially in the tanker segment.

And to that end we.

We focus on strong underlying financial results.

I am so very proud that our network revenue surpassed 2019 pre pandemic levels for the third straight year.

A testament to our consistent focus on high value customer growth ARPA was flat on a year over year basis.

Our base management programs are offsetting ongoing roaming pressures.

Data overage now represents only a single digit percentage of our pik.

Underlying <unk> health is coming from a mix shift towards unlimited plans.

And that's coming both from existing customers stepping up to unlimited plans.

And a shift in new additions towards unlimited plans.

In Q3, 77%.

Of all rate plan changes were either step ups or flat.

And this has been great because every quarter that number is increasing.

We expect this trend to continue as we transition to <unk> and all the benefits that it will enable from a speed reliable while ability and video quality perspective.

In Q3, Telus <unk> network has expanded to 253 new markets.

A total of 633 communities, representing 64% of the population and by the end of the year, we will cover approximately 70% of the population with fibre channel.

On the roaming front recovery is steady and controlled.

Roaming revenue as a percentage to pre pandemic 2019 levels.

As approximately 50%.

And as we progressed through Q4 and into 2022.

I expect to see steady improvement in that trend as borders open and travel recovers.

But we're also seeing favorable equipment margin and Opex trends.

Maintaining discipline on promotions, increasing certified pre owned sales customers holding their devices longer are all leading to lower costs of acquisition.

And to that extent, we are increasingly seeing mobile clinic.

A key role in the certified pre owned.

And Beware.

Okay.

Digital and Omnichannel investments are driving higher sales productivity higher digital and direct to consumer channel mix is holding despite the resurgence of retail traffic.

While conversion rates in our retail stores are increasing.

Shift to unlimited plans are reducing bill shock and substantially reducing bill shock related customer credits.

So as we move forward.

Value proposition remains very strong.

Very collaborative culture, leading to a great household product intensity outcome.

Combined with network and experienced leadership.

See ongoing low churn, which is driving high value customer mix.

Investments in our communities are further driving strong brand loyalty.

We are enjoying efficiencies from our digital and omni platforms, while productivity of our retail channels continues to increase.

We are well positioned to continue these strong wireless performance outcomes.

We have a strong track record throughout Covid.

We are confident moving forward.

And I can tell you.

As a team.

Our culture has never been stronger.

Doug over to you.

Thank you, Jim and Hello, everyone. In Q3, we can <unk> proven track record of profitable customer growth and robust financial returns.

Our mobile network revenue grew for the fifth consecutive quarter, increasing three 7% year over year, reflecting stable mobile ARPA.

Putting a modest uptick in roaming revenue of approximately $9 million year over year.

And our consistent focus on high quality customer additions and in fact, our base management.

Compared to the pre pandemic Q3, 2019 with network revenue was up zero Doc 6%, reflecting the strong momentum we built through quality loading step ups to unlimited data plans all delivered alongside a lower cost to serve structure and increase customer satisfaction as Jim <unk>.

Line roaming revenue is just below 50% of pre pandemic levels, we anticipate travel to gradually increase as we move into Q4 and into 2022.

Also data overage has now represents a low single digit percentage of our ARPA. These trends set us up for stronger <unk> and network revenue growth in 2022 and beyond.

Fixed data service revenue increased by 13% showcasing our execution.

Targeting profitable customer growth.

Excluding double digit internet <unk> on a year over year basis, we continue to be successful in driving higher product intensity in our fiber areas with an average of three products per household in addition to our strong home and mobile loading that Jim referenced.

For health services revenue, we reported 12% growth in the quarter.

This robust speaks to tell us how it's diversified revenue streams, some of which continue to be impacted by the pandemic related impact.

Impact such as our clinics and HBM services offset by the continued adoption of digital health solutions, including virtual Baird.

In total <unk> revenue grew by four 1% and adjusted EBITDA increased by seven 4% respect reflecting quality growth from all products.

<unk> operating revenues grew 23% with robust growth across all industry verticals.

Particularly strong growth in tech and games as well as E Commerce and Fintech this growth.

Successful, new customer wins and growth within our existing customer base, including expanding services offered to those existing customers.

Business acquisitions also supported the strong third quarter growth, most notably Lionbridge AI, which has been rebranded to tell us the international AI data solutions.

Adjusted EBITDA increased about 5% with strong topline growth, partially offset by two main factors the mark to market adjustment on share based compensation.

The result of Telus International's strong share price performance and the impact from foreign exchange from the strengthening Canadian dollar.

Normalized for these impact DLC <unk> adjusted EBIT da graph.

3% aligned but tell us nationals reported growth rate that they announced today.

A reconciliation a reconciliation of these reporting differences are provided on slide 17, and 18 of our posted investor presentation.

<unk> revenue and adjusted EBITDA grew by six 7% and seven 1% respectively in the quarter.

Notably our consolidated adjusted EBITDA is also up an impressive 7% compared to pre pandemic Q3, 2019, despite the continued related headwinds including roaming.

These results reflect across our diversified and differentiated business lines and execution excellent excellence throughout our organization.

In addition, the non cash mark to market share based compensation expense and Ti our consolidated EBITDA growth would've been eight 5%.

Heading into Q4, we expect consolidated EBITDA growth to remain in the same range as this quarter on track to deliver our full year 2021 results within our original guidance range in.

In February.

This quarter, we generated free cash flow of 203 million up 26% from the prior year the.

The increase in the quarter was primarily due to strong EBITDA growth lower handset contracts and lower cash taxes, partially offset by our accelerated Capex program, which continues to proceed as planned.

Although Q4 free cash flow is seasonally lower due to handset loading in renewables, our full year free cash flow, it's trending in line or above our annual target.

Our strong year to date free cash flow of $734 million reflects our execution excellence and cash flow management through a dynamic environment.

Our balance sheet remains very healthy, including total available liquidity over $3 6 billion.

Our net debt to EBITDA leverage ratio ended the quarter at $3, one nine down from $3 45 at year end.

We continue to work towards Delevering over the medium term led by our margin expansion strong EBITDA growth and cash flow generation, particularly in 2023 as we also expect a significant.

Klein and our capital expenditures at the conclusion of our accelerated broadband build.

Over the near and long term deleveraging opportunities may also be considered including divestiture of noncore assets as well as real estate monetization opportunities as part of our or decommissioning program.

In addition, we have no significant debt maturities in 2022.

Importantly, with our healthy balance sheet and financial flexibility, coupled with an attractive cash flow outlook, we remain committed to our long term standing dividend growth program and payout ratio guideline, notably.

Notably, excluding our accelerated broadband capital investments, which was pre funded with equity our dividend payout ratio at the end of Q3 was 75%.

<unk> with our targeted range.

<unk>, our third quarter results reflect our customers first culture, our execution consistency and our commitment to sustainable long term value creation for all stakeholders.

I look forward to the continuing strong operating momentum and advancing our growth strategy further as we close out 2021 and into 2022 with that Roger Robert back to you.

Thanks, Doug Mihai can we proceed with the questions now please.

Yes of course first question comes from Jeff Fan from Scotiabank. Please go ahead Jeff.

Thank you good morning, and good afternoon.

You are connected device numbers.

Had a record quarter.

Wondering if you can talk a little bit about the devices and the services that's driving the unit growth wondering if the G M.

They all contributed to have already or are there some things that you can call out.

And then is there a way for us to assess the revenue contribution or future opportunity that comes from this just from your service revenue any way for us Paul.

So close that opportunity thanks, a lot.

Yeah.

I'll take this one.

Jeff. Thank you yeah, we set.

<unk> set a record on the connected device upfront does you have duly noted.

That result is flattered by the strategic deal that we've consummated with G. M. That's all on the come that's prospective voting for us thats not material to the performance results that we've just posted.

In terms of where it's coming from it really is from a myriad of sources, which I think bodes well.

Not that it's not coming from a singular area.

But from a ton of different areas within our beta be construct and that's really exciting. Examples just so you can get a sense of it.

Tell us from a workforce productivity point of view, a workforce safety point of view of workforce engagement point of view, we have a very significant set of solutions for connected workers.

Focused on promoting safety and enhancing our productivity.

And you know the relationships that we have on this front and the significant partnerships that we have as it relates to our channel strategy are.

Our tremendous leap fruitful for us and we've got customers in this area from BC hydro to various.

Various provincial governments to CP rail to construction companies.

It for us is a tremendous opportunity.

And it continues to grow and again back to operations administration maintenance monitoring information data analytics and analytics threat.

Threat protection are real time, alerts and tracking or workforce personnel that's significant.

Other areas that have been critical for us is our smart city a push.

Something that we want to do also in concert with our fast growing security business again, we've.

Got significant customers and we have significant third party relationships that.

That are driving our Iot loading.

And the opportunities are in this space.

Our plentiful as it relates to public safety traffic optimization considerations.

Relationships are that we fostered even through our venture capital business.

Our investments in companies like my efficient from a traffic management point of view.

Other areas for us.

That are extremely potent is fleet management.

I think as it relates to fleet management and vehicles.

Aspartame considerations and the like particularly on a Canadian Pan North American basis.

This is Ben.

Extremely successful for us and we've made some smart acquisitions in this space.

With companies like focus and Skyhawk that are driving some of the loading that you have seen and key.

<unk> chips again across Canada with various municipalities are energy companies.

Including what we're doing in Ontario.

On cheerios with hydro one.

And with a number of companies through a consortium in the province of Quebec as it relates to the light rail system and Montreal other areas for us that are growing prudently or business analytics.

As a result of partnerships, we have with companies like purple teller.

<unk> analytics business analytics solutions are allowing customers in the retail and hospitality sector.

Harness location based data on premises to enhance their client.

Experience and also find new and innovative ways to market their products and services and find new customers.

Then the last thing Jeff for Us in this space.

Is what we're going to do on Iot and health.

<unk>.

And clearly in there.

That particular space.

The opportunity set is is absolutely voluminous.

And I cannot emphasize enough that the opportunity here isn't just as it relates to devices and sensors that have an attractive <unk> and an ampoule, but how we integrate it enjoys solutions overall and what we do in respective date.

Analytics, particularly when you think about it within the five G. A construct and the data monetization opportunity to drive better food outcomes in AG and better health outcomes on the health front is extremely significant to say the least.

And the other thing is the diversity isn't just related to the sectors and the users and the customers that I've articulated our Iot business is strong on retail and it's exceedingly strong on wholesale when you think about our b to b to C offerings.

And where to look for it not showing up in our financials look forward in two areas look for it driving our ARP, who prospectively as we lead the industry in scaling our Iot solutions and look for the flow through from our Pud to ampoule.

The margins that we generate on the Iot Brian are extremely attractive indeed.

Then finally look for ancillary returns when it comes to data monetization from dynamic insight all the way up to artificial intelligence. This is also a great combination area for us.

<unk> tell us and Chi I, given the overlapping business thesis here with our digital platforms.

Okay. Thank you that give you enough of what division.

That's great answer thank you.

Thanks, Jeff next question.

Of course, our next question comes from Jeremy <unk> from <unk>.

Please go ahead.

Yes. Thank you in terms of cops already to commissioning.

Are we exactly in terms of assessing this said it's of course Sandy like have you completed.

The process in certain areas and what would be your initial takeaways in terms of client reaction Ah.

And also in terms of a potential cost savings and then.

As a follow up.

On the cost front.

<unk> decommissioning operation or there may be additional one time opex that we should be expecting for maybe more next year are.

From the operation our and would they be included in restructuring also thank you.

Okay, well I got into trouble on the last call for stealing Ah Tony Zeno Thunder.

So I'll learn from my past mistakes and I'll hand, it over to Tony and dental.

I meant in terms of their answer to that multi part question.

Thanks, Tom Hodge Hi, Jerome.

With respect to a couple of fiber migration.

We expect to be down to around 12% of copper serve subs in our fiber footprint by the end of this year.

Then we can we will aim to be substantially complete by the end of 2022 early 2023.

And largely that that gives us a little bit of a tactical laborers to pick rates, which we push hard or ease back subject to all the demand on our capacity for us in your subscriber growth elsewhere in our footprint. So it's it's quite a handy later because if demand is low we can gear up and do more and if demand is high we can ease back with respect.

Two our learnings we tell them, we turned down a couple of central offices completely from copper services.

Given us great insight.

Two one the challenge of doing that and how do you manage a migration in some cases you have.

Our legacy copper customers with voice only requirements and.

They are quite happy with that capability, so our ability to communicate with them effectively and lead them through the process and put them on ultimately more reliable technology Paul.

One that with the well.

Just as we've gone through those two turned down so I'll reference.

Secondly.

It has highlighted the opportunities for considerable efficiency both in our real estate footprint from the Central office real estate that we have in the space, we need for future service technologies versus the legacy copper footprint, which means there is a significant development and rationalization opportunity ahead of us.

With substantive real estate in attractive locations in most towns and cities across our service area.

And then for customers increasingly the customers that only have Copa poor voice service.

Very fast diminishing group.

And increasingly everyone else sees the benefit of the portfolio of products, we can layer on top of a very reliable fast.

Fiber connected household so.

I think it offers a great road map items I know can expand on this the overland future services and a much higher service customer penetration.

The reliability factors for us are significant with about 35% less repairs on fiber relative to Copa and.

There's an efficiency that we can garner from supporting one network buses to so as you can imagine as we pump.

This program, we would expect to see considerable operating efficiencies being related to the business and given us opportunity to redirect capacity or or harvest those efficiencies Seinfeld would you like to talk about.

Sure Thanks, Tony and thanks to them again for that question, maybe I'll just highlight a couple of other contributing points to what Tony laid out the first Jerome it answers your question around the one time costs and what I wanted to highlight is the synergies that we have exploited in terms of driving our copper.

Decommissioning process. So what I mean by that is you've seen us be very assertive on the product intensity front and so as we drive product intensity, Doug highlighted that we had three products per household in our fiber footprint at this point and that grew 8% and so as we continue to grow that product intensity.

We are continuing to drive the copper decommissioning.

In parallel the second point is around that churn win that we get with the copper decommissioning and the <unk> lift that we get so in addition to the repair rate. The economics are very strong because we get the added margin accretion from those two components.

And finally with respect to the future of our fiber footprint, we have a strong outlay of several capabilities in terms of both the internet.

Road map with pure fiber ax, and our rollout of two and a half gigabit, which has the opportunity to expand to 10 gigabit and that is.

Highly and significantly advanced relative to the cable DOCSIS footprint and of course symmetrical. So we're very confident in our ability to continue to grow our step ups as we migrate and and incurred increased product intensity and to realize that that contributed economic.

All mix across both <unk> and and margin accretion across our repair rates and churn improvement in terms of increased customer lifetime value and finally that gives us a really great opportunity to leverage our strong customer experience to deliver more products, which you'll see coming through our roadmap.

Roadmap in the coming quarters.

From a restructuring perspective.

We have to date, there is no decommissioning costs going through restructuring.

We'll look at when Theres a complete shutdown.

<unk> or a potential to remove copper from <unk>.

The polls or wherever it may be that there could be a restructuring charge, we will be transparent when that occurs but to date there has been.

Okay, Great hopefully no one has gotten into trouble for a sensor for the sensor. Thank you.

Thanks, Rob next question please.

Yes of course and before we move on to the next question I would just like to remind everyone to press.

Star One if you want to ask a question. So please press star one.

Our next question comes from Simon Flannery. Please.

Go ahead.

Great. Thank you. Good morning, So continued strong momentum with the mobile ads the internet ads and we've seen a great quarter for the industry and I, we've heard pent up demand being a significant driver with the COVID-19 reopening so it'd be great to get some sense of what you think the sustainability of the.

The industry growth and year on year growth is going to be because we've certainly seen in the U S.

Broadband in particular slowdown on the cable side of things so any sense of how you see this over the next few quarters and how much of this quarter was driven by that.

Unlock phenomenon. Thanks.

Thanks, Simon Jim Why don't you go first and then hand it over to Zane also he covered both bookends on the broadband front.

Thanks.

Yeah.

Jim are you on yet.

Sorry, I guess it can't be on mute and answering your questions.

<unk>.

There is there is definitely some froth in the market.

Driving some pent up demand.

We definitely felt that in Q3.

I would just like to say a few things, though like I I think I really genuinely believe our core value proposition is resonating.

The network and customer experience leadership.

Finding that with mobile and home bundling.

Is leading to sustained churn churn performance, which really helps us on that and also to be.

Judicious on what promotions, we decided to execute on them.

<unk>.

And I also think the investments in simplification, our device programs and digital are allowing us to be very flexible between.

Retail channels and direct to consumer channels and.

We've.

We've done really well.

And when retail traffic comes back where there in retail traffic pulls back because of Covid concerns were there and I think thats driving some of the consistency.

The third thing is the <unk>.

And they're doing very well with bundling across and cross selling our portfolios.

Which allows us to.

Bring in the play a lot of the data analytic investments that we've made.

And even artificial intelligence to make sure that.

We're reaching out to customers that have a high probability of buying from us which has been good.

And then I think the last thing and this is what I'm really excited about is there is a trend towards more b Y O T.

And in the CPO market is increasing.

And.

Our acquisition of mobile clinic is starting to bear fruit for us.

In terms of a number of things one.

They buy sell refurbish C. P O S, which is increasing our CPO.

Inventory.

They are a nice.

Place to refer customers, who are not ready to upgrade their devices to repair their devices. So they can keep them longer.

And frankly, where we're starting to see some nice success on pulling through.

Activations on the back of CPO sales from.

From mobile clinic.

And then when you when you factor in the distribution footprint.

Aligns really well in Submarkets, where we have lower market share so.

Market's frothy our value proposition is resonating our digital investments are getting a lot of flexibility or more ways to get.

Get out that traffic.

Bundling is really working for us and mobile clinic is really starting to take advantage of that B Y O D market.

So we are like really confident and really happy with what we're seeing there.

Alright, thank you.

Thanks, Thanks, Jim on the fixed side Darren referenced some minor inflationary impact from the peak of the Covid period last year.

But our broadband growth prospects look very very strong and I think there are some very core fundamentals that support that.

Our accelerated fiber footprint is yielding great results, we're seeing our value proposition resonates incredibly well in the marketplace in terms of customers, making the choice for fiber and we are also going to see an impact of the expansion of that footprint and then.

Capabilities that five T will bring to deliver.

Continued superiority, but more so than that we also have the superiority of the individual products and our bundle and the breadth of our bundle and so those.

Touch points give us the opportunity to expand our conversations with customer and attract customers that are interested in different aspects of our bundle and to leverage that from an intensity perspective.

And then finally I think we've demonstrated that we sweat our assets very well, we take a very holistic community based approach, we drive intensity into the market and we leave no stone unturned in terms of areas like the decommissioning that we spoke to so we feel really strong and confident about our broadband roadmap and our keep.

Abilities, and our ability to continue providing differentiated customer value that's resonating in the market.

Many thanks.

Thanks, Simon next question please.

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

Thank you very much.

First I just want to clarify something on Tony's comment when he said.

Do you expect to be down 12% on copper by the end of this year the release states you're at 12% at the end of the third quarter, but I think you may be talking apples and oranges. There the 12% by end of the year would include phone only customers as opposed to the 12% now that's just television and Internet.

Sorry, Sorry, then said, it's 12% at the end of Q3.

Which is down from 15% at the beginning of the year.

We will be making measured progress continually now between now and then to 2022 and that's corpus of customers in our fiber footprint.

Okay. So.

Okay. So it would be lower than 12% by the end of 2021, yes gotcha. Okay. Thank you.

The I don't know if Doug wants to take this one but.

Since you've switched to the new reporting segments. This is the first time, we've seen GTECH segment EBITDA margins go up year over year, they're up 120 basis points, which as you know I've been.

And.

Wanting to see for some time can you give any sense as to whether that's fueled mostly are partially driven by the turnaround in the wireline segment or was that mostly driven by wireless.

And it's the combination of both.

So we are seeing good momentum on the wireline side and all the products as we mentioned.

We had the J curve with AG, and we're an unapproved to integration and starting to drive more margins on that front.

Health care was impacted by Covid as well as we talked about between our clinical and HBM environment, and so that starting to recover and the margin accretion from that in addition to the growth in our virtual care platforms. As is contributing we then have our.

Copper to fiber discussion that we've just been going.

And the product intensity that Zane I'll highlight and also contributing to margin opportunities and enhancement.

And Tony referred to the reductions in truck Rolls and repairs all of that is combining where we're getting a a good contribution.

From wireline as well as wireless raw feed on wireless obviously would be contributing to that as well and I think you're going to see a continued steady as she go on that margin enhancement as all those items continue to improve over time. We also have our business segment, that's been negative EBITDA growth for a while.

Wireless and it's been extremely strong and so business is actually positive on a consolidated se product basis between wireline and wireless and the wireline margins, which were right. We're still in the negative growth trajectory are continuing to improve.

We'll see that in 2022 as well so very optimistic.

You need to see that.

On on our base I think mix could obviously impact the average but positive momentum across the board.

Doug one more more clarification type thing, but is you've said your broadband or residential internet <unk> was up over or youre up double digits, so over 10%.

Year over year and your subscribers are up six 5%. So I just want to make sure I put those two together you're saying your residential internet revenue would be up at least 17% year over year.

I don't have the exact 17%.

Our internet our.

Data revenue was up over 12, so there'd be some give and takes between the business side and concerned about your you're in the ballpark and and we will look into the exact number for them to later.

Thank you.

You only have to add on the.

Comprehensive answer there Doug gave.

As it relates to margins and margins on a go forward basis, but I think are notable number one is our digital efficiency.

Is supporting a better opex profile.

For this organization Holistically across care.

Panels sales, so on and so forth.

That's a notable element does it relates to but where we can take margins prospectively as we carry on with that digital transformation.

And then the second area, maybe a paid advertisement, but it's the support of Ti.

And leveraging the efficiency of the Ti organization across <unk>.

Both wireline and wireless as Doug alluded to.

And also Ti supporting the scaling and the maturation of our emerging businesses as well.

That will also buttress our margins prospectively on a recurring basis.

Robert So go ahead go ahead.

Next question please.

Alright. Our next question comes from drew Mcreynolds from RBC. Please go ahead.

Yeah.

Yeah. Thank you very much just two for me first I guess.

Following up on Doug's response to <unk> question, just on the business market.

Maybe Doug can you give an update on where we're.

Things stand from an economic standpoint, as we come out of Covid here and as well as on the competitive side and good to see that.

Kind of renewed momentum in that segment, which I think has been in the works for a while and then secondly, just a technical question to the extent you know.

Is there any sense of when that 3500 megahertz spectrum will ultimately be released here or is that a Q4 thing or do we get a delay here into 2022. Thank you.

Okay.

On the business side.

<unk> been very Oh, and on how we approach business from an economic perspective.

So we do not chase consumer or business that is not fall into that category with the challenges that we've seen on the slowdown in investment we've.

We've seen.

The migration from legacy to digital platforms and business.

That is where we've seen the margin pressure in the growth.

Slow down.

Haven't seen you know as we brought in new new.

New products, which you know as Darren highlighted fit into that digital category as well that are easier to implement.

Less customized.

And extremely user friendly that is going to allow us to continue to drive the margins and growth and as economics I would suggest you know even on a roaming front, but it'll be a slower recovery.

And as you see we go into 2022, we are expecting both wireline and wireless products to start contributing as we get through later into 2022.

I would say, it's going to be slow and steady.

As you can see the economy recover, especially in the small medium business area.

Okay.

Hey, Doug just to talk about on the on the business side of course, we see the exciting aspects of five G really.

Database and machine to machine applications and capabilities.

Similar to the GM onstar and referenced earlier, so clearly that's an area where business and our advanced fiber penetration and great pleasure coverage will really allow our business team to take advantage of those capabilities and applications as they come to market maturity. So we would expect to see.

The five G rollout really driving.

Potential.

EBIT dollar contribution enhancements across our business space.

And on the 3500, Darrin unless you had other insight I do not have any updates on the exact timing of that.

I think 2022 is the right assumption as per the comment made earlier.

Thank you.

I mean, how do we have time for one more question. Please.

Alright. Our next question comes from Matthew Griffiths from Bank of America. Please go ahead.

Thanks for taking the question.

I wanted to go back to the 12% of the remaining.

Where customers in the copper footprint that.

I'm going to be migrated hopefully by the end of 2022 does that represent an acceleration of the pace that you have been migrating customers in the past.

And kind of related to that is the I know you have been successful in increasing the product intensity.

As customers move over to fiber.

I'm just curious about how long a tail that has is there a big step up that you see on day, one or are we going to see a long tail past 2022, where the product intensity from this cohort and previous year's cohorts of migrated customers will be continuing to experience an increase in.

The intensity just trying to get a longer term outlook on them.

Net add trajectory thanks.

Maybe I'll start.

<unk> to pick it up but in terms of the the 12% when we first launched our fiber program back in 2013, we were clearly looking to grow net new subscribers and we focused on those customers that wanted.

The portfolio of services and those customers that were existing customers that were happy with their existing service arrangement, we kind of.

Left behind.

A couple of cloud migration is really now revisiting those customer stay if the circumstances and needs a change by way of having additional services for because now it's opportune for us to go change to migrate them.

The beautiful thing about the copper to fiber migration program is it really allows us to leverage our workforce to the ultimate level, where as I said in high demand, we can turn it down.

If we have repairs anyway, we can go out and do the migration, while we're doing the repair and if we get demand request, we can do a migration at that juncture. So we have a kind of tactical lever, we can pull autoput or slowdown and pullback on.

So that kind of is dictating outflow and it really is down to us to look at market by market community by community. What is the optimum space for us to go out. So we suddenly picked up a pace over the last few years and now we're on a measured pace to closeout and we're leveraging the capacity as it exists.

Ultimately deploying out field resources.

Making sure that if all the product demand so that we can direct the capacity to that and we can we can slow down a little bit on the migration with respect to.

The customer intensity per penetration increase once they come onto fiber as I said before we have a very fast diminishing segment of the customer base that really is just landline I don't really know.

Everyone else is really a tune to internet and once you're into Internet you see the benefits of a symmetrical speeds and the capabilities that can offer for a multi device connected home.

That's symmetrical speed is essential for consistent performance.

The watchful eye of expansion within the home and then of the optic taper TV platform announced small security and future home automation efforts mean that the opportunity to drive product intensity.

It grows in <unk>.

Ill pass design allows us to talk about the kind of.

The segment of customers, we're seeing adult totally and how the rest of the base as far as following.

Thanks, Tony Yes, so as I mentioned, you know, we're leveraging that opportunity when customers wanted to add products to accelerate that migration process and when we do that we're future proofing their environment. So that products that we add later on will either be much easier to deploy or actually can be health deployed.

In a do it yourself manner, but when you think about the fact that you know our current product intensity is at 3%.

<unk> fiber households, and we're still we are unique in the market in that we have a minimum of seven core product capabilities already with a growing portfolio in the quarters to come. So if you look at online security health products, what we're doing on video.

And our ability to penetrate and in that environment, and our demonstrated ability to lean into disruption to enter new product categories that gives us a long tail opportunity that we're actually very excited about because we can continue as Jim highlighted to leverage our personalization our analog.

<unk>, our data science to understand the needs of customers and ensure that we're supporting their needs as their digital life expanse.

We're going to continue that that journey and we hope to continue it in a much more margin accretive and lower cost of acquisition manner, because we're rolling out that decommissioning and enabling future proof fiber capabilities going forward.

And in addition to that our ex GFS roadmap, which I spoke to in terms of pure fiber ax does not require material upgrades and costly upgrades there our device connectivity requirements to continue advancing that roadmap, but that can be done in a much more cost streamlined way. So we're investing now for the future.

There are all of these investments are in our disclosure and in our targets and we're excited about the roadmap that we can bring to fruition for our customers.

And there won't be a long tail just so the point in terms of your question is answered categorically.

The magnitude of the challenge in terms of copper facilities.

Just over 200000 lines.

The public our goal to have that decommission by 2023.

Comments.

During my opening remarks in that regard.

Look at our history as it relates to retiring technologies on both the wireless front.

And on the wireline front, it's part and parcel with what we do.

And so to the extent to which there is a legacy base.

In that timeframe, then we will undertake a mandatory migration so that we get the entirety of our base from a homogenous point of view on the same technology and can retire the legacy technology that has served us so well for the last 100 years and in doing so we unleash.

<unk> our cost efficiencies.

And then secondly, we open ourselves up to the <unk> accretion the multi product penetration.

And the lower churn and the automated relationship with the customer so that in the future when were provisioning clients. We can do a digitally versus requiring the physicality of a truck rule and.

And we think that.

There's a tremendous opportunity.

Particularly when we think about the synergistic context with five G and all that that pretends on a home automation base.

Great. Thank you.

Thanks, Matt and thank you everyone for joining us today, please feel free to reach out to the IR team with any follow ups and take care everyone.

[noise] everyone. This concludes the Telus 2021 Q3 earnings conference call. Thank you for your participation and have a nice day.

Yeah.

[music].

Good morning, everyone and welcome to the Telus 2021 Q3 earnings conference call I would like to introduce your speaker Mr. Robert Mitchell. Please go ahead.

Hello, everyone and thank you for joining us today.

2021 results news release, MD&A and financial statements and detailed supplemental investor information were posted on our website. This morning at Telus Dotcom slashing investors.

On our call today, we have remarks by Darren Entwistle, President and CEO.

<unk> incoming president tell us agriculture shouldn't think L. E D P mobility solutions, and Doug French EVP and CFO.

In addition for the Q&A portion of our call we will be joined by Dan I'm algae, EVP on solutions, and 'twenty guarantee EVP and chief customer officer.

Briefly on slide two this presentation and answers to questions contain forward looking statements that are subject to a restaurant uncertainties and made based on certain assumptions accordingly actual performance could differ from statements made today. So we ask that you do not place undue reliance upon them, we disclaim any obligation to update forward looking statements, except as required by law and we refer you to the risks and assumptions.

In our public disclosures, including our third quarter 2021, MD&A, our 2020 annual MD&A and filings with Securities commissions in Canada, and U S with that over to you Dan.

Thank you Ronaldo and Hello, everyone.

For the third quarter, our team once again achieved strong operational and financial results are.

Our ongoing execution excellence continues to demonstrate the consistent combination of industry, leading profitable customer growth and strong financial performance coming from across our business.

Our robust performance reflects the effectiveness of our globally, leading customer centric culture and broadband networks underpinned by a highly engaged team and their passion for delivering outstanding connected experiences.

Notably blended mobile phone pure fiber internet optic GV security and voice churn are all below 1% on a year to date basis.

Moreover, our results, we're buttressed by a highly differentiated and potent asset mix geared towards high growth technology oriented verticals, which I'm going to elaborate on in just a minute.

Looking at our consolidated financial results for the third quarter, we achieved industry, leading year over year growth.

7% across both revenue and EBITDA and when excluding the impact of share based compensation at Ti. Our Q3 consolidated EBITDA growth would have been eight 5%.

This performance is illustrative of our unmatched capabilities and competitive position that we will continue to leverage our advantage as the economic recovery progresses.

Looking now at our mobile operating results.

Telus achieved robust industry, leading customer growth of 245000, net additions up close to 25% on a year over year basis.

This included a 135000 mobile phone and 110000 connected device net new customer.

24020, 3000 on our respective basis.

Impressively connected device customer additions represented an all time record high for our organization.

Something to build upon yet again going forward.

Notably with respect to this momentum on connected devices <unk> was recently named GM candidate five G network provider for their onstar connected vehicle services.

This represents the first time GM at selected a domestic communications company to provide connected vehicle services for their Canadian customers.

This historic Alliance will leverage the scale customer centricity and passion of our collective teams and a potent combination with our expanded world leading <unk> network to enable an unparalleled experience that will keep GM customers and our fellow citizens safe and.

Connected.

Importantly, our team yet again delivered another quarter a best in class loyalty results.

Blended mobile phone churn was zero debt, 9% an improvement of nine basis points over this time last year.

This performance is backed by strong digital capabilities and the periods service offerings over our world, leading broadband networks and potent customers first culture that has served us so well.

At a time when the human connection continues to be more important than ever.

<unk> has been named the fastest mobile operator in Canada by U S based <unk> for the fifth year in a row in their Q3, Canada market report for 2021.

In addition, our team earned the top spot in six of the seven category and UK Open signal August 2021 mobile network experience the Canada report.

Notably open signal bound <unk> wireless download speed of 73, nine megabits per second to be 6% faster than the second place finisher and close to 30% faster than the third place finish here.

This represents the 10th time tell us does receive a top ranking from open signal, including being recognized as having the fastest mobile network in the world in 2020.

A true reflection of the incredible expertise and dedication of our entire team led by aerospace auto.

With the ongoing operationalization of new spectrum and expansion of our National <unk> network <unk> will continue to offer Canadians globally, leading network reliability globally, leading b coverage and low latency.

These technology attributes matter.

Because they drive continuous innovation that enables the diversity the productivity and the competitiveness of our country private sector supporting economic growth and job creation and sustainability.

Additionally, deep technology investment in our network strengthening connections to help us answer societies, most pressing social challenges.

<unk> that we're looking to answer and help education food security and environmental sustainability, whilst improving economic equality for the benefit of all Canadians.

Closing on mobile network revenue was up 7% reflective of our focus on high quality customer growth.

An excellent base management.

In a few minute Jim is going to have the opportunity to provide further commentary on our outstanding results within our wireless business.

Turning now to our fixed operating and results.

Dana Lennar team once again delivered impressive wireline data revenue growth of 13% supported by great results in the beta beat Brian from Devine and his organization.

This ongoing data revenue expansion was supported by another quarter of robust customer growth.

Third quarter Internet net additions of 46000 represented our best third quarter result, compared to all pre pandemic period since 2003.

In spite of being down slightly compared to Q3 last year, which was of course flattered by pandemic related impacts.

Importantly continued double digit residential internet <unk> growth, both exceedingly well for future lifetime economics of our fast growing fiber based internet product line.

Telus continues to drive strong TV attach rates with TV. Net addition of 10000.

Notably we remain the only provider in North America.

Recently deliver positive GDP growth quarter in quarter out as customers recognize the unique value of our flexible packaging and integrated over the top streaming.

Whilst residential voice line losses of 11000.

Slightly over last year when market activity was muted in the early stages of the pandemic.

Our leading security and home automation. Net addition of 30000 increased by 12000 compared to one year ago, reflecting the strength of our digital capabilities and continued expansion of our home and security automation bundle.

In total we achieved robust industry best overall wireline product net additions of 75000 in the third quarter of 2021.

This was driven by our unique and highly attractive bundled offers available to customers.

Our superior product portfolio as well as our strong customer loyalty.

Coupled with our team's focus on leveraging the distinctive competitive differentiation inherent in our expanding pure fiber network that Tony and the team have been building.

Indeed, pik net additions continued to be enhanced by our significant investment in fiber and <unk> wireless technology, including our ongoing accelerated broadband expansion program being steward steward it by Tony <unk>.

Arrows and their teams through 2022, that's yielding such significant beneficial results with its organization, both operationally and economically.

Indeed, the generational investments will fuel and had customer growth and operating efficiencies and drive positive cash flow benefit as we complete our expedited broadband build and retire our remaining copper infrastructure in the next 18 months.

This is going to be a unique accomplishment in the global telecommunications sector.

This included reaching over 19 million lives covered an increase of over 20% on a year over year basis.

Realizing nearly 138 million digital health transactions during the third quarter alone.

<unk> will continue to leverage our leading position in healthcare technology solutions did deliver improved health outcomes.

Through access to better help information, which of course has never been more critical.

We will continue to expect this business.

To drive double digit expansion in revenue and EBITDA contribution.

Illustrative of the value, we are creating as the globally, leading provider of agriculture technology solutions.

Earlier this past week, we announced John reign, as the President of Telit agriculture.

With over 20 years of global experience in digital Agriculture data science and farming John is exceedingly well positioned to lead the ongoing evolution of this critical area of our business.

And deleveraging has tremendous expertise John will focus on driving growth opportunities throughout our agriculture business.

Using technology innovation artificial intelligence and human ingenuity to optimize the agribusiness production chain, including helping farmers and ranchers to produce and deliver food for the worlds ever expanding population and to do it more efficiently more effectively.

More safely and of course more sustainably.

Food supply for citizens around the world.

Following my remarks, John will share a few words regarding his vision for <unk> agriculture.

Overall third quarter revenue for T. Chek operating segment increased by more than 4% on a year over year basis, while EBITDA was up in excess of 7%.

Or 8% on an organic basis.

Doug is going to provide further details on our T chek financials in just a minute.

Turning now to our <unk> segment.

Earlier today, <unk> announced strong double digit revenue and EBITDA growth with increased profitability for the third quarter.

These continued strong results demonstrate <unk> position as the partner of choice for Premier digital customer experiences for our clients around the world as they look to our talented team to deliver and and Nextgen digital solutions and services powering a dip.

Data customer experience.

This includes a unique and unparalleled mix of content moderation data allocation and artificial intelligence capabilities.

Doug It's also going to provide further details on <unk> financials during his commentary.

To conclude our significant ongoing broadband network investments further enable the continued advancement of our financial and operational performance.

Strengthening our confidence in the robust outlook for our business and the long term sustainability of our industry, leading dividend growth program.

The five 2% dividend increase announced today represents the 21st since 2011 with our programme now unbelievably in its 11th year.

Since 2004 <unk>.

Telus has now returned more than $20 billion to shareholders, including over $15 billion in dividends, representing approximately $15 per share.

Future dividend growth and affordability will be buttressed by strong EBITDA growth and value creation in our core talent.

Hi.

<unk> and agriculture business it.

It is also going to be supported by lower future capital expenditures.

<unk> and do so on a continuous prospective basis.

Reinforcing our long standing dedication to working collaboratively with indigenous communities.

In September we introduced <unk> reconciliation commitments.

Developed in partnership with.

And in support of indigenous peoples across the country.

A reconciliation act at the cornerstone of our action plan and other related activities moving forward.

By way of example in October we launched our Telus mobility for good for indigenous women at risk program.

Through which we are providing free smartphones and data plans to indigenous women at risk or surviving violence.

In addition, this week <unk> announced a 1 million dollar commitment to digitize.

And distribute the interactive authentic experience of the weakness blanket in partnership with the Canadian Museum for human rights and indigenous artists carry Newman.

Created to pay homage to the children and families impacted by candidates residential school system.

The original witnessed blanket is a 12 meter long our installation that features 887 objects.

<unk> from 77 residential school communities across Canada, such as letter photos stories clothing.

And fragments of building.

I remain exceedingly proud of.

And grateful for the entire <unk> team for their exemplification of our leadership in social capitalism as we deliver outstanding results for all of our stakeholders.

On that note I'd like to turn the call over to John John over to you and welcome to tell us.

Thank you Darren and Hello, everyone, it's an honor to be invited to the call today.

I'm very pleased to join such an outstanding organization and accelerate our work in data science across the agriculture food chain.

One of the reasons I'm, so excited to join tell us.

Is the company's unique position as a pure play data science and digital agriculture business.

This offers us a tremendous competitive advantage.

For some perspective, the world Economic Forum estimates the global AG industry at approximately two and a half trillion and the global food industry at over eight trillion.

I believe tell us AG is well positioned to capitalize on this amazing opportunity through significant new value creation across the agriculture food chain.

As a data science company, we have the opportunity to deliver a whole new level of lead generation data insights they serve farmers and agriculture retailers as well as grocers.

And consumers generating value from the farm gate to the dinner plate.

<unk> mission to ensure a safe secure and plentiful global food supply for future generations is very meaningful and I'm glad to be a part of making that happen.

Over the course of the next few weeks I'll be working closely with the tell us AG leadership team.

To quickly get up to speed on the business and ensure we deliver on our commitments in 2021.

And then as importantly, establish actionable plans to accelerate our business in 2022 and beyond.

I look forward to speaking to you again soon thanks, everyone and Jim over to you.

Thank you John.

The third quarter, we achieved another strong set of mobile customer additions and loyal because of results.

Total Q3 mobile phone customer additions were 135000 up 25000 year over year.

Bringing our year to date total to a healthy 255000, and thats up 25% over the same pandemic period in 2019.

Customers see our value.

Network and customer experience leadership.

Investment in local communities and offering valuable services for the entire household.

Zane, Illinois, and our teams.

<unk> had an incredibly strong working relationship which is driving great product intensity outcomes across mobility and home services.

Product intensity combined with our customer experience is helping tell us lead the industry in mobility churn as Darin shared earlier.

2021 will mark the eighth straight year of postpaid churn below 1%.

And our year to date postpaid churn result is only zero down 7%.

Sustained low churn enables us to focus on high value customer growth.

We continue to focus on profitable customer growth avoiding an economical promotional offers especially in the tanker segment.

And to that end we.

We focus on strong underlying financial results.

I am so very proud that our network revenue surpassed 2019 pre pandemic levels for the third straight year.

A testament to our consistent focus on high value customer growth are.

<unk> was flat on a year over year basis.

Our base management programs are offsetting ongoing roaming pressures.

Data overage now represents only a single digit percentage of our pik.

Underlying <unk> health is coming from a mix shift towards unlimited plans.

And that's coming both from existing customers stepping up to unlimited plans and.

The shift in new additions towards unlimited plans.

In Q3, 77%.

Of all rate plan changes were either step ups or flat.

And this has been great because every quarter that number is increasing.

We expect this trend to continue as we transition to <unk> and all the benefits that it will enable from a speed reliable while ability and video quality perspective.

In Q3, Telus <unk> network has expanded to 253 new markets.

A total of 633 communities, representing 64% of the population and by the end of the year, we will cover approximately 70% of the population with <unk>.

On the roaming front.

Recovery is steady and controlled.

<unk> revenue as a percentage to pre pandemic 2019 levels.

As approximately 50%.

And as we progressed through Q4 and into 2022.

I expect to see steady improvement in that trend at the borders open and travel recovers.

But we're also seeing favorable equipment margin and Opex trends.

Maintaining discipline on promotions, increasing certified pre owned sales customers holding their devices longer are all leading to lower costs of acquisition.

And to that extent, we are increasingly seeing mobile clinic.

A key role in the certified pre owned.

And <unk>.

Okay great.

Digital and Omnichannel investments are driving higher sales productivity higher digital and direct to consumer channel mix is holding despite the resurgence of retail traffic.

While conversion rates in our retail stores are increasing.

Shift to unlimited plans are reducing bill shock and substantially reducing bill shock related customer credits.

So as we move forward.

Value proposition remains very strong.

Very collaborative culture, leading to a great household product intensity outcome.

Combined with network and experienced leadership.

See ongoing low churn, which is driving high value customer mix.

Investments in our communities are further driving strong brand loyalty.

We are enjoying efficiencies from our digital and omni platforms, while productivity of our retail channels continues to increase.

We are well positioned to continue the strong wireless performance outcomes.

We have a strong track record throughout Covid.

We are confident moving forward.

And I can tell you.

As a team.

Our culture has never been stronger.

Doug over to you.

Thank you, Jim and Hello, everyone. In Q3, we can trend year proven track record of profitable customer growth and robust financial returns.

Our mobile network revenue grew for the fifth consecutive quarter, increasing three 7% year over year, reflecting stable mobile ARPA.

Putting a modest uptick in roaming revenue of approximately $9 million year over year.

And our consistent focus on high quality customer additions and in fact, our base management.

Compared to the pre pandemic Q3, 2019 network revenues that zero Doc, 6%, reflecting the strong momentum we built through quality loading step ups to unlimited data plans.

All delivered alongside a lower cost to serve structure and increase customer satisfaction.

As Jim outlined roaming revenue is just below 50% of pre pandemic levels, we anticipate travel to gradually increase as we move into Q4 and into 2022.

Also data overage has now represents a low single digit percentage of our <unk>. These trends set us up for stronger <unk> and network revenue growth in 2022 and beyond.

Fixed data service revenue increased by 13% showcasing our execution.

Targeting profitable customer growth.

Including double digit Internet <unk> on a year over year basis, we continue to be successful in driving higher product intensity in our fiber areas with an average of three products per household in addition to our strong home and mobile loading that Jim referenced.

For health services revenue, we reported 12% growth in the quarter.

This robust speaks to tell us how it's diversified revenue streams, some of which continue to be impacted by the pandemic related impacts.

Impact such as our clinics and <unk> services.

By the continued adoption of digital health solutions, including virtual Baird.

In total <unk> revenue grew by four 1% and adjusted EBITDA increased by seven 4% were spec, reflecting quality growth from all products.

<unk> operating revenues grew 23% with robust growth across all industry verticals, but particularly strong growth in tech and games as well as E Commerce and Fintech.

This growth.

Successful, new customer wins and growth within our existing customer base, including expanding services offered to those existing customers.

Business acquisitions also supported the strong third quarter growth, most notably Lionbridge AI, which has been rebranded to tell us the international AI data solutions.

Adjusted EBITDA increased about 5% with strong topline growth, partially offset by two main factors the mark to market adjustment on share based compensation.

Results of <unk> International strong share price performance and the impact of foreign exchange from the strengthening Canadian dollar.

Normalized for these impact DLC <unk> suggests that EBITDA growth would've been 20.

3% aligned with tell us nationals reported growth rate that they announced today.

A reconciliation a reconciliation of these reporting differences are provided on slide 17, and 18 of our posted investor presentation.

As holiday to revenue and adjusted EBITDA grew by six 7% and seven 1% respectively in the quarter.

Notably our consolidated adjusted EBITDA is also up an impressive 7% paired to pre pandemic Q3 2019, despite the continued related headwinds including roaming.

These results reflect across our diversified and differentiated business lines and execution excellence excellence throughout our organization.

In addition.

The non cash mark to market share based compensation expense and Ti our consolidated EBITDA growth would've been eight 5%.

Heading into Q4, we expect consolidated EBITDA growth to remain in the same range as this quarter on track to deliver our full year 2021 results within our original guidance range and.

In February.

This quarter, we generated free cash flow of 203 million up 26% from the prior year the.

Although Q4 free cash flow is seasonally lower due to handset loading and renewals our full year free cash flow, it's trending in line or above our annual target.

Our strong year to date free cash flow of $734 million reflects our execution excellence and cash flow management through a dynamic environment.

Our balance sheet remains very healthy, including total available liquidity over $3 6 billion.

Our net debt EBITDA leverage ratio ended the quarter at $3, one nine down from $3 45 at year end.

We continue to work towards Delevering over the medium term led by our margin expansion strong EBITDA growth and cash flow generation, particularly in 2023 as we also expect a significant decline in our capital expenditures at the conclusion of our accelerated Brian.

Been billed.

In addition, we have no significant debt maturities in 2022.

Notably, excluding our accelerated broadband capital investments, which was pre funded with equity our dividend payout ratio at the end of Q3 was 75%.

<unk> with our targeted range.

To conclude our third quarter results reflect our customers first culture, our execution consistency and our commitment to sustainable long term value creation for all stakeholders I look forward to the continuing strong operating momentum and advancing our growth strategy further as we close out.

2021 and into 2022 with that Roger Robert back to you.

Thanks, Doug Mihai can we proceed with the questions now please.

Yes of course first question comes from Jeff Fan from Scotiabank. Please go ahead Jeff.

Thank you good morning, and good afternoon.

You are connected device.

Numbers.

I had a record quarter.

Wondering if you can talk a little bit about the devices and the services that's driving the unit growth wondering if the GM.

Deal contributed that already or is there are some things that you can call out.

And then is there a way for us to assess the revenue contribution or future opportunity that comes from this just from your service revenue any way for us to.

So close that opportunity thanks, a lot.

I'll take this one.

Jeff Thank you yes.

<unk> set a record on the connected device upfront does you have duly noted.

That result is flattered by the strategic deal that we've consummated with GM.

All on the come that prospect of voting for us thats not material.

The performance results that we've just posted.

In terms of where it's coming from it really is from a myriad of sources, which I think bodes well.

Fact that it's not coming from a singular area.

But from a ton of different areas within our <unk> construct and that's really exciting examples just so you can get a sense of it.

From a workforce productivity point of view.

Workforce safety point of view of workforce engagement point of view, we have a very significant set of solutions for connected workers focused on promoting safety and enhancing productivity.

And the relationships that we have on this front and the significant partnerships that we have as it relates to our channel strategy.

Tremendous leap fruitful for us and we've got customers in this area from BC hydro to bear.

Various provincial governments to CP rail to construction companies.

<unk> for us.

As a tremendous opportunity.

And it continues to grow and again back to operations administration maintenance monitoring information data analytics analytics threat.

Threat protection are real time alerts and tracking of workforce personnel that significant.

Other areas that have been critical for us is our smart city push.

Something that we want to do also in concert with our fast growing security business again.

Got significant customers and we have significant third party relationships.

That are driving our Iot loading.

And the opportunities in this space.

Our plentiful as it relates to public safety traffic optimization considerations.

Relationships.

We foster even through our venture capital business.

With our investments in companies like my efficient from a traffic management point of view.

Other areas for us.

That are extremely potent is fleet management.

And I think as it relates to fleet management and vehicles.

Inspiration considerations and the like particularly on our Canadian Pan North American basis.

This is Ben.

Extremely successful for us and we've made some smart acquisitions in this space.

With companies like focus and Skyhawk that are driving some of the loading that you have seen and key relationships again across Canada with various municipalities energy companies.

Including what we're doing.

Ontario with hydro one.

With a number of companies through a consortium in the province of Quebec as it relates to the light rail system and Montreal.

Other areas for us that are growing prudently or business analytics.

As a result of partnerships, we have with companies like purple.

<unk> analytics business analytics solutions are allowing customers in the retail and hospitality sector.

<unk> location based data on premises to enhance.

Their client experience and also find new and innovative ways to market their products and services and find new customers.

And then the last thing Jeff for Us in this space is.

Is what we're going to do on Iot and how.

In AG.

Clearly in that particular space.

The opportunity set is is absolutely voluminous.

And I cannot emphasize enough that the opportunity here isn't just as it relates to devices and sensors that have an attractive <unk> and an ampoule, but how we integrated into our solutions overall and what we do in respective data.

Analytics, particularly when you think about it within the <unk> construct and the data monetization opportunity to drive better food outcomes in AG and better health outcomes on the health front.

Is extremely significant to say the least.

And the other thing is the diversity isn't just related to the sectors and the usage and the customers that I've articulated our Iot business is strong on retail and it's exceedingly strong on wholesale when you think about our b to b to C offerings.

And where to look for it showing up in our financials look forward in two areas look for it driving our <unk>.

<unk> prospectively as we lead the industry in scaling our Iot solution.

Look for the flow through from <unk> to <unk> because of the margins that we generate on the Iot Brad.

Our extremely attractive indeed, and then finally look for ancillary returns when it comes to data monetization from dynamic insight all the way up to artificial intelligence. This is also a great combination area for us between tablets and Ti.

Given the overlapping business thesis here with our digital platforms.

Okay. Thank you that give you enough of illustration.

That's great answer thank you.

Thanks, Jeff next question.

Of course, our next question comes from Jeremy <unk> from there is all the time.

Please go ahead.

Yes. Thank you.

In terms of copper decommissioning.

Where are we exactly in terms of assessing this said it's of course Sandy like have you completed the process in certain areas.

And what would be your initial takeaways in terms of client reaction.

And also in terms of potential cost savings and then.

As a follow up.

On the cost front, the decommissioning operation or there may be additional one time.

Opex that we should be expecting for maybe more next year.

From the operation or would they be included in restructuring also thank you.

Okay, well I got into trouble on the last call for stealing Tony Zeno Thunder.

So I'll learn from my past mistakes and I'll hand, it over to Tony and Daniel.

Comment in terms of their answer to that multi part question.

Thanks Hunter.

Hi, John.

With respect to covenant fiber migration we.

We expect to be down to around 12% of corpus of subsidy and a part of our footprint by the end of this year.

And then we can we are aligned to be substantially complete by the end of 2022 early 2023.

And largely that that gives us a little bit of a tactical laborers to pick rates, which we push hard or ease back subject to other demand on our capacity for new subscriber growth elsewhere in our footprint. So it's quite a handy later because if demand is low we can gear up and do more and if demand is high we can ease back with respect.

Two our learnings, we we turned down a couple of central offices completely from copper services.

Given us great insight.

Two one the challenge of doing that and how do you manage a migration in some cases you have.

Our legacy copper customers with voice only requirements and.

Quite happy with that capability, so our ability to communicate with them effectively and lead them through the process and put them on ultimately a more reliable technology. Paul is one that we have.

Well practiced as we've gone through those two turned down so I'll reference.

Secondly.

It has highlighted the opportunities the considerable efficiency both in our real estate footprint from the Central office real estate that we have in the space, we need for future service technologies versus the legacy copper footprint, which means there is a significant development and rationalization opportunities ahead of us.

With substantive real estate in attractive locations in most towns and cities across our service area.

And then for customers increasingly the customers that only have Copa poor voice service.

Very fast diminishing group.

And increasingly everyone else sees the benefit of the portfolio of products, we can layer on top of a very reliable fast.

Fiber connected household so I think it offers a great road map items I know can expand on this overland future services.

A much higher service customer penetration.

The reliability factors for us are significant with about 35% less repairs on fiber relative to Copa.

<unk>.

There is an efficiency that we can garner from supporting one network versus two so as you can imagine as we pump.

This program.

We would expect to see considerable operating efficiencies being related to the business and given us opportunity to redirect capacity or or harvest those efficiencies Synovus would you like to talk about.

Sure Thanks, Tony and thanks again for that question.

I will just highlight a couple of other contributing points to what Tony laid out.

The first Jerome it answers your question around the one time costs and what I wanted to highlight is the synergies that we have exploited in terms of driving our copper decommissioning process. So what I mean by that is you've seen us be very assertive on the product intensity front and so as we drive product intensity Doug highly.

<unk> that we have three products per household in our fiber footprint at this point and that grew 8% and so as we continue to grow that product intensity, we are continuing to drive the copper decommissioning.

In parallel the.

Second point is around that churn win that we get with the copper decommissioning and the <unk> lift that we get so in addition to the repair rate. The economics are very strong because we get the added.

Margin accretion from those two components and finally with respect to the future of our fiber footprint, we have a strong outlay.

<unk> capabilities in terms of both the Internet.

Roadmap with pure fiber ax and our.

Rollout of two five Gigabits, which has the opportunity to expand to 10 gigabit and that is.

Hi, Lee and significantly advanced relative to the cable DOCSIS footprint and of course symmetrical. So we're very confident in our ability to continue to grow as step ups as we migrate and an incorrect increased product intensity and to realize that that contributed <unk> <unk>.

All mix across both <unk> and margin.

<unk> across our repair rates and churn improvement in terms of increased customer lifetime value and finally that gives us a really great opportunity to leverage our strong customer experience to deliver more products, which you'll see coming through our roadmap roadmap in the coming quarters.

From a restructuring perspective.

We have to date, there is no decommissioning costs going through restructuring.

We will look at when Theres, a complete shutdown of NMM.

So or a potential to remove copper from.

Polls or wherever it may be that there could be a restructuring charge, we will be transparent when that occurs but to date there has been.

Okay.

Okay, Great hopefully no one has gotten to trouble for a center that's already sensor. Thank you.

Thanks, Tom.

Question. Please.

Yes of course and before we move on to the next question I would just like to remind everyone too.

Press Star.

One if you want to ask a question. So please press star one.

Our next question comes from Simon Flannery. Please go ahead.

Industry growth and year on year growth is going to be because we've certainly seen in the U S. Broadband in particular slowdown on the cable side of things. So any sense of how you see this over the next few quarters and how much of this quarter was driven by that.

Kind of unlock phenomenon. Thanks.

Thanks, Simon Jim Why don't you go first and then hand it over to Zane also we cover both bookends on the broadband front.

Thanks.

Yeah.

Jim are you on mute.

Sorry, I guess the cap you're on mute Nancy.

Hum.

Yeah.

There is there is definitely some froth in the market.

Driving some pent up demand.

We definitely felt that in Q3.

I would just like to say a few things, though like I think I really genuinely believe our core value proposition is resonating.

The network and customer experience leadership <unk>.

Finding that with mobile and home bundling.

<unk> is leading to sustained churn churn performance, which really helps us on that and also to be.

Judicious on what promotions.

We decided to execute on them and not.

Okay.

And I also think the investments in simplification.

Our device programs and digital are allowing us to be very flexible between.

Retail channels and direct to consumer channels.

<unk>.

We've done really well.

And when retail traffic comes back.

There in retail traffic pulls back because of Covid concerns were there and I think thats driving some of the consistency.

The third thing is.

Zane on are doing very well with bundling across and cross selling our portfolios.

Which allows us to.

Bring in the play a lot of the data analytic investments that we've made.

And even artificial intelligence to make sure that.

We're reaching out to customers at a high probability of.

Of buying from us which has been good.

And then I think the last thing and this is what I'm really excited about is there is a trend towards more <unk>.

And in the CPO market.

It is increasing.

And.

Our acquisition of mobile clinic is starting to bear fruit for us.

In terms of a number of things one.

They buy sell refurbish cpo's, which is increasing our CPO.

Inventory.

They are a nice.

Place to refer customers, who are not ready to upgrade their devices to repair their devices. So they can keep them longer.

And frankly, we're starting to see some nice success on pulling through.

Activations on the back of CPO sales.

From from mobile clinic.

And then when you when you factor in that.

The distribution footprint.

Aligns really well in Submarkets, where we have lower market share so.

Market's frothy our value proposition is resonating our digital investments are getting a lot of flexibility or more ways to go.

Get out that traffic.

Bundling is really working for us and mobile clinic is really starting to take advantage of that B Y O D market.

So we are like really confident and really happy with what we're seeing there.

Alright, thank you.

Thanks, Thanks, Jim on the fixed side Darren referenced.

Minor inflationary impacts from the peak of the Covid period last year.

But our broadband growth prospects look very very strong and I think theres. Some very core fundamentals that support that our accelerated fiber footprint is yielding great results, we're seeing our value proposition resonates incredibly well in the marketplace in terms of customers, making the choice.

For fiber and we are also going to see an impact of the expansion of that footprint and the capabilities that <unk> will bring to deliver.

Continued superiority.

More so than that we also have the superiority of the individual products and our bundle and the breadth of our bundle and so those.

<unk> and our ability to continue providing differentiated customer value that's resonating in the market.

Okay.

Thanks, Simon next question please.

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

Thank you very much.

First I just want to clarify something on Tony's comment when you said.

Do you expect to be down to 12% on copper by the end of this year the release states you're at 12% at the end of the third quarter, but I think you may be talking apples and oranges there 12% by end of the year would include phone only customers as opposed to the 12% now that's just television and Internet.

Sorry, sorry.

It's 12% at the end of Q3.

Which is down from 15% at the beginning of the year.

We will be making measured progress continually now between now and then to 2022 and that's helped us customers in our fiber footprint.

Okay Joe.

Okay. So it would be lower than 12% by the end of 2021.

Yes got you okay. Thank you.

I don't know if Doug wants to take this one but.

Since you've switched to the new reporting segments. This is the first time, we've seen GTECH segment EBITDA margins go up year over year. They are up 120 basis points, which as you know I've been.

Ben.

Wanting to see for some time.

Can you give any sense as to whether that's fuel mostly are partially driven by the <unk>.

The turnaround in the wireline segment or was that mostly driven by wireless.

Yes, it's the combination of both.

So we are seeing good momentum on the wireline side and all the products as we mentioned.

We had the J curve with AG and we're on an approach to integration and starting to drive more margins on that front.

Copper to fiber discussion that we've just been going.

And the product intensity that Zane I'll highlight and also contributing to margin opportunities and enhancement.

Tony referred to the reduction in truck Rolls and repairs all of that is combining where we're getting a good contribution.

Wireline as well as wireless clean on wireless obviously would be contributing to that as well and I think youre going to see a continued steady as she go on that margin enhancement as all those items continue to improve over time. We also have our business segment, that's been negative EBITDA growth for a while.

Wireless and it's been extremely strong and so business is actually positive on a consolidated.

Product basis between wireline and wireless and the wireline margins, which where we're still in the negative growth trajectory are continuing to improve.

You'll see that in 2022 as well so very optimistic youll continue to see that.

On on our base I think mix could obviously impact the average but positive momentum across the board.

Thanks, Doug.

And one more more clarification type thing, but as you've said your broadband or in a residential internet <unk> was up over or youre up double digits, so over 10%.

Year over year and your subscribers were up six 5%. So I just want to make sure I put those two together you're saying your residential internet revenue would be up at least 17% year over year.

I don't have the exact 17%.

Our internet our our.

Data revenue was up over 12, so there'd be some give and takes between the business side and concerned about here youre in the ballpark.

And.

We're looking at the exact number for them for later.

Great. Thank you.

Okay.

To add on the.

The comprehensive answer there Doug gave.

As it relates to margins and margins on a go forward basis, but I think are notable number one is our digital efficiency.

Supporting a better opex profile.

This organization Holistically across care.

Channels sales, so on and so forth.

And I think that's a notable element as it relates to where we can take margins prospectively as we carry on with that digital transformation.

And then the second area, maybe a paid advertisement but has the support of Ti.

And leveraging the efficiency of the Ti organization across both wireline and wireless.

Doug alluded to.

And also Ti supporting the scaling and the maturation of our emerging businesses as well that will also buttress our margins prospectively on a recurring basis.

Robert Go ahead go ahead.

Next question please.

Alright. Our next question comes from drew Mcreynolds from RBC. Please go ahead.

Yes. Thank you very much just two for me first.

Following up on Doug's response to <unk> question, just on the business market.

Maybe Doug can you give an update on where we're.

<unk> stand from an economic standpoint, as we come out of Covid here and as well as on the competitive side and good to see that.

The renewed momentum in that segment, which I think has been in the works for a while and then secondly, just a technical question to the extent you know.

Is there any sense of when that 3500 megahertz spectrum will ultimately be released here is that a Q4 thing or do we get a delay here into 2022. Thank you.

Right.

On the business side.

We've been very open and on how we approach business from an economic perspective.

So we do not.

<unk> consumer or business that is not fall into that category with the challenges that we've seen on the slowdown in investment.

We've seen and the migration from legacy to digital platforms and business.

That is where we've seen the margin pressure in the growth.

Go down I think we have.

<unk> seen as we brought in a new new.

New products, which as Darren highlighted fit into that digital category as well that are easier to implement.

<unk> customized.

And extremely user friendly that is going to allow us to continue to drive margins and growth and Biz economics I would suggest even on a roaming front that will be a slower recovery.

And as you see we go into 2022, we are expecting both wireline and wireless products to start contributing as we get through later into 2022.

I would say, it's maybe slow and steady.

As you can see the economy recover, especially in the small medium business area.

Okay.

Hey, Doug just to top up on the on the business side of course, we see the exciting aspects of <unk> really.

Database and machine to machine applications and capabilities.

Similar to the GM, one stern referenced earlier, so clearly that's an area where business and our advanced fiber penetration and great pleasure coverage will really allow our business team to take advantage of those capabilities and applications as they come to market maturity. So we would expect to see.

The <unk> rollout really driving.

Potential.

EBIT dollar contribution enhancements across our business space.

Now in the 3500, Darrin unless you had other insight I do not have any updates on the exact timing of that.

I think 2022 is the right assumption as per the comment made earlier.

Thank you.

I mean, how do we have time for one more question. Please.

Alright next question comes from Matthew Griffiths from Bank of America. Please go ahead.

Thanks for taking the question.

I wanted to go back to the 12%.

Remaining.

Subs.

Customers in the copper footprint that.

Are going to be migrated hopefully by the end of 2022 does that represent an acceleration of the pace that you have been migrating customers in the past.

And kind of related to that is the.

I know you have been successful in increasing the product intensity.

As customers move over to fiber.

Was curious about how long a tail that has is there a big step up that you see on day, one or are we going to see a long tail past 2022, where the product intensity from this cohort and previous year's cohorts of migrated customers will be continuing to experience an increase in.

The intensity just trying to get a longer term outlook on.

Got it.

Net add trajectory thanks.

Maybe I'll start.

<unk> to pick it up but in terms of the 12% when we first launched our fiber program back in 2013, we were clearly looking to grow net new subscribers and we focused on those customers that wanted.

The portfolio of services and those customers that were existing customers that were happy with their existing service arrangement we tunnel.

Left behind.

The couple of fiber migration is really now.

Visiting those customers say, if the circumstances and needs a change by way of having additional services or because now it's opportune for us to go changed and then migrated them and the beautiful thing about the copper to fiber migration program is it really allows us to leverage our workforce to the optimum level. If we're as I said in.

High demand, we can turn it down.

If we have repairs anyway, we can go out and do the migration, while we're doing our repair and if we get demand request, we can do a migration at that juncture. So we have all kind of tactical lever, we can pull harder or slowdown and pullback on so.

So that kind of is dictating outflow and it really is down to us to look at market by market community by community. What is the optimum speed for us to go out. So we certainly picked up a pace over the last few years and now we're on a measured pace to close out and we are leveraging the capacity as it exists.

Optimally deploying out field resources.

I'm, making sure that if all the product demand. So that we can direct the capacity to that and we can we can slow down a little bit on the migration with respect to.

The customer is.

Hence deeper penetration increase once they come on to fiber as I said before we have a very fast diminishing segment of the customer base that really is just landline I don't really know.

Everyone else is really attuned to internet and once youre into Internet you see the benefits vast symmetrical speeds.

Capabilities that can offer for a multi device connected home.

Thats symmetrical speed is essential for consistent performance.

The Wifi expansion within the home and then of the optic TV platform announced smart security and future home automation efforts mean that the opportunity to drive production tends to.

Gross.

Ill pass design allows us to talk about the kind of.

The segment of customers, we're seeing adult early and how the rest of the base as far as following.

Thanks, Tony Yes, so as I mentioned, we're leveraging that opportunity when customers wanted to add products to accelerate that migration process and when we do that we're future proofing their environment. So that products that we add later on will either be much easier to deploy or actually can be self deploy.

In the do it yourself manner, but when you think about the fact that our current product intensity is at three per.

<unk> fiber households, and we are still we are unique in the market in that we have.

Minimum.

Core product capabilities already with a growing portfolio in the quarters to come. So if you look at online security health products.

We're doing on video and our ability to penetrate in that environment and our demonstrated ability to lean into disruption to enter new product categories that gives us a long tail opportunity that we're actually very excited about.

We can continue as Jim highlighted to leverage our personalization or analytics or data science to understand the needs of customers and ensure that we're supporting their needs as their digital life expense. So we're going to continue that that journey and we hope to continue it in a much more margin.

Accretive and lower cost of acquisition manner, because we're rolling out that the decommissioning and enabling future proof fiber capabilities going forward and in addition to that our ex GFS roadmap, which I spoke to in terms of pure fiber ax does not require material upgrades and <unk>.

Lastly, upgrades there our device connectivity requirements to continue advancing that roadmap, but that can be done in a much more cost streamlined way. So we're investing now for the future. All of these investments are in our disclosure and in our targets and we're excited about the roadmap that we can bring to fruition for our customers.

Yeah.

And there won't be a long tail just so that point in terms of your question is answered categorically.

The magnitude of the challenge in terms of copper facilities is just over 200000 lines. We have a public goal to have that decommissioned by 2023.

Comments.

During my opening remarks in that regard.

Look at our history as it relates to retiring technologies on both the wireless front.

And on the wireline front, it's part and parcel with what we do.

And so to the extent to which there is a legacy base.

The significant cost efficiencies.

And then secondly, we open ourselves up to the <unk> accretion the multi product penetration.

And the lower churn and the automated relationship with the customer.

So that in the future when were provisioning clients.

We can do it digitally.

<unk>, requiring the physicality of a truck roll.

And we think that.

There's a tremendous opportunity.

Particularly when we think about the synergistic context with five G and all that that pretends on a home automation base.

Great. Thank you.

Yeah.

Thanks, Matt and thank you everyone for joining us today, please feel free to reach out to the IR team with any follow ups and take care everyone.

Sure.

Everyone. This concludes the Telus 2021 Q3 earnings conference call. Thank you for your participation and have a nice day.

Q3 2021 Telus Corp Earnings Call

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