Q4 2021 Quebecor Inc Earnings Call
The conference is now being recorded.
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Good morning, everyone and thank you for standing by and welcome to the cubic Inc. 's financial results for the fourth quarter and full year 2021 conference call.
Sure introduce Cmos Chief Financial Officer of Kibet Core Inc. Please go ahead.
Ladies and gentlemen, good morning, and welcome to get back to our conference call. My name is Jake small I'm, the CFO and joining me to discuss our financial and operating results for the fourth quarter and full year of 2021.
Our president and CEO .
And you want unable to attend the conference call will be able to listen to a recording by telephone or webcast access details as usual are available on our website at triple W Dot, Quebec, or dot com and a recording will be available until may 24th.
I also want to inform you as we always do that certain statements made on the call today may be considered forward looking and we would refer you to the risk factors outlined in today's press release and reports filed by the corporations with regulatory authorities let.
Let me now I'll turn the floor to get it out.
Yeah.
Good morning, everyone.
First off we're seems to have that completed last December the acquisition of 294 blocks five G 3500 megahertz of spectrum.
Half of our investment in Ontario, Manitoba, Alberta, and British Columbia.
As we have said before this spectrum constitutes the base of a potential expansion of our telecom services across Canada should of course, that's still pending M. D. N O regulatory framework for all we'll say more about wireless service.
Is establish favorable conditions.
Ensuring the economic viability of Indiana.
We are also still eagerly awaiting the competition Bureau ruling on the Roger Shaw transaction another opportunity to create real.
Last thing competitive dynamic, bringing to Canadians the benefits of technological innovation superior client experience and lower prices as we have done here in Quebec for many more than 10 years.
Speaking of the competitive telecom environment in Quebec.
Our financial results for the last quarter and the year of 2021 reflects these temporary we believe more intense promotional dynamics.
Both in wireless and broadband despite.
Which we managed to generate increases of five 5% in revenues 111, 1% and EBITDA.
Eight 3% in cash flows from operations for the year with an increase of 25 million or seven four in cash flows in the fourth quarter.
In light of these resolved and following our plan to gradually increase dividends to represent 30% to 50% of our net free cash flow and happy to report that can handle more than directors declared yesterday.
Quarterly dividend of <unk> 30 per share on both class a and class B shares.
From the 27 five cents a 9% increase.
Turning to operational matters and starting with Telecom you do talk actively pursue is <unk> deployment in the greater Montreal, and Quebec city areas provide.
Providing increased speed expanded connectivity minimum latency and opening a world of opportunities for our customers.
Moreover, the first phase of operation I see all.
Our project to deliver high speed Internet to 37000 households, and several municipalities across the province is proceeding well.
In December we connected our first.
And the northwest suburbs of Montreal, and the residents response had been very enthusiastic so far pointing to a successful program for which I wish to salute not only our team, but also our partners, Quebec government and government.
Government, Florida these important initiatives.
Our earnings Activations reached 157000 for the first for the fourth quarter.
Presenting our best performance of the year and the sixth can take consecutive quarter with more than 100000 customers. In addition to our services.
Subscribers to our superior service totaled over $1 2 million as of December 31st 2021.
In a market characterized by ongoing cord shaving and cutting.
So it all stands out with its ability to limit the impact on its video customer base due to its state of the art platform and second deny and client experience.
Internet subscriber growth was 800000 Jermaine.
8000, sorry during the quarter and 44 at that 44.
Year over year, a performance that compares favorably to that of our large Canadian peers and competitors.
Internet Art, who increased dollar 33, or two 5% over the last year.
During the quarter, we launched many great features in the Unix ecosystem subscribers can now access Amazon Prime video directly on the next day, they control I voltage thermostat by the chemical company and control smart door locks right.
August directly with the Fi Act.
On the wireless front, we posted 31000 ads during the quarter.
Despite the ongoing aggressive competition from a loading and renewal perspective.
Our April we were able to improve our churn level slightly for the quarter and captured once again, the largest combined share of gross adds and come back with more than 32% for our two brands you do it at home and food <unk>.
Warning to do the new ads quarterly tracking by leasing.
This number one position, which had been solidly established for several quarters.
Clearly demonstrated the strength and pump complimentary of our brand and certainly confirms do you do it all at the leader in wireless services in Quebec.
In addition, I.
I am proud to highlight that fear is tops leaves a 2021 Wow digital index offering the best online experience and telecommunications for this third consecutive year.
Consolidated wireless RPM for the quarter improved to 28 tenths of a 0.7% over the same quarter last year.
This increase is explained in large part by a roaming and data usage revenues comparing favorably to the same quarter last year.
With over 460000.
Subscribers across Quebec, clearly equal continue to invest in the production of local differentiated content from various horizon with the introduction of a brand new content offer.
In the fourth quarter Liberty go in collaboration with can they call content launch three new original films and additions to new seasons of popular series such as Wifi that takes into account is on and these are not.
They are a new deal with subscription platform dedicated to exclusive unscripted lifestyle documentary and entertainment content introduced more than 35, New original productions. In addition to acquiring some of the best International brands, where non scripted content in French.
Yes.
Growing to more than 42000 subscribers in less than five months right.
Is a huge success and a perfect complement to literally go which is dedicated to series movies and use program.
But it is also available on kit backwards integrated digital news and entertainment content platform and that is that you did if you don't have customers, who do not subscribe to Alex.
In our media segment advertising revenues continued to increase particularly in broadcasting up 25% in the quarter and 30% over the year.
We continue to invest in a wealth of new shows original production and exclusive content in the fourth quarter to maintain our leadership position in the face of increased competition from offering on multiple platforms.
Thanks to our I caliber original production and major TV events DVR consolidated market share reached 38, 8%.
<unk> and part of it 25% increase for the T D channel.
Very competitive again.
Competitive environment from private competitors.
Our state broadcasters agile Canada.
Now our production and audio visual services company also performed very well growing its revenues by 47% to 86 million and its EBITDA to $23 million for year 2021.
Its best performance ever.
Finally.
On the regulatory front I would like to voice my concern once again.
Bob the Unsustainability high burden placed on Canadian Broadcasting company.
As you know with streaming subscriptions have now surpassed television distribution services Canadian companies are operating in an increasingly precarious environment a situation would lead to the weakening of the TV industry and of local production.
News of vital pillar.
Strong and healthy democracy will suffer unless it's Yankee license that burden.
It is high time that we to enjoy the same regulatory and commercial freedom as the flooring web giant.
Giants, which I've been eating our lunch free of charge.
I will now let you review our financial results.
Yes, you can check out.
For the fourth quarter, Quebec, whereas revenues were up 3% to $1 2 billion revenues from our Telecom segment grew 1% to $953 million, mainly explained by the wireless segment, combining customer growth and higher revenues from mobile devices.
Revenues from our media segment grew 14% to $212 million.
Quarterly EBITDA was down 5% to 499 million for the quarter. Our telecom segment reported an EBITDA of 467 million, a 3% decrease compared to the same quarter last year.
As a result of some provision reversal, which impacted us favorably last year and also lower margin in wireline and also on mobile devices.
Sales, which also accounted on the on the top line.
Our media segment reported an EBITDA of $29 million.
Which was 17 million unfavourably.
Two last year, mostly due to higher broadcast content costs in part because of the late start of the NHL 'twenty 'twenty and 2021 season.
<unk> reported a net income attributable to shareholders of $161 million in the quarter or <unk> 67 shares or dollars per share.
<unk> to net income of $160 million.
Or 64 cents per share reported in the same quarter last year adjusted income from continuing operations, excluding as usual.
Unusual items and gains or losses on valuation of financial instruments came in at a $158 million or <unk> 66 per share compared to an adjusted income of 165 million or $66.
For sure in the same quarter last year.
For the full year, Quebec quarters revenues were up 5% to $4 $6 billion and EBITDA was up 1% to almost $2 billion revenues from our telecom segment grew 3% to $3 7 billion and EBITDA increased 1% to $1 9 billion for the same period with an overall EBITDA margin of 52%.
[noise] Telecom Capex spending excluding spectrum was down $56 million for the quarter as compared to the previous year.
Mainly due to the timing of investments, where we refocused on our strategic priorities tightened our processes and operate more efficiently.
For the full year telecom capex spending decreased $59 million as compared to last year, while increasing investments in our LTE advanced and <unk> rollout.
Our cash flow from operations for the year of 2021 increased by $17 million or 5% to $1 4 billion once again, demonstrating the resilience and strength of our business model.
As well as our continued operational and financial discipline cash.
Cash flow from operations for the Telecom segment also grew $70 million or 6% to $1 3 billion.
And then as of the end of the quarter, our net to net debt to EBITDA ratio was $3. One nine times up from 268 times reported at the end of last year, mainly explained by the acquisition of the 3500 megahertz spectrum.
Available liquidity of $1 $6 billion at the end of the year and our growing cash flows.
We will continue to be more than sufficient to fulfill our commitments.
Fuel our projects for growth.
In 2021.
We purchased and canceled $8 9 million class B shares for a total investment of $282 million since we initiated our and in CIB 11 years ago, approximately $49 6 million class B shares have been purchased and canceled.
We thank you for your attention and we'll now open the lines for your questions.
[noise] right. Our first question comes from.
From a there's a bank.
Yeah.
On the thanks for.
Yeah go ahead.
We've also the Taman Thanks for taking my question, we seen this morning, the dividend being increased 9% there were things again buybacks are in the quarter as well.
I think too dissimilar to trends, we have been seeing before but still I have to ask if we should read anything in terms of the signal regarding your willingness to expand outside of Quebec has this changed at all since our last call in November .
Yes, Marshall, whereas your own.
Well no I guess that you know we were are quite clear regarding you know what.
We were considering a.
Yes.
More than all of our own situation in terms of payout.
This has been mentioned you know a few quarters ago are we do not expect you know changing our policy.
So basically you know this is why you know we've been the board of Directors decided that you know we should we should continue to increase probably you know the increases go little bit lower than some of you would expected.
But you know it's in line with the policy that we've established a previously.
Out of Quebec or rest of the day.
Defense.
You want to call it.
Pension I guess and you know I would like to refer you to my introduction in my my speech basically saying that you know we're expecting to know at this stage. Unfortunately, you know where we're clearly you know in the Dart are we expecting another CRT seem to come with the proper framework.
Work to make sure that they will it will make sense.
Yes, the overall policy you know to improve competition.
Canada and Canada.
There is no doubt that the proof has been made in Quebec for the last few years as well and it's more than a few years now and it's been a while.
So.
Sure.
We should think domain.
Unclear that affords them better.
It would be you know the best vehicles to make sure that Canadians will enjoy a more competitive landscape.
Okay. Thanks, that's a that's pretty clear and then a second one if I may I was.
Looking at our public pricing out on the website and it appears that the gap between the pricing of videotron and that of others has somewhat closed our recently I'm wondering if that means.
You are starting to get more comfortable with the current market share and if we should expect the company to enter a new phase in terms of hits our wireless strategy.
Well you know what Oh, my guess that we should say its a very volatile.
Environment.
Got it in front of me.
So an.
Excerpts from two newspapers today's newspapers.
One is from the Toronto Star and then the second one is from Montreal Gazette.
So and the Toronto Star.
Toronto start page eight seven.
We have an AD from bell, which is purified the faster than in that technology.
Starting from 80 495 per month.
This is mark.
And that's one of them will start.
I look at the Montreal Gazette.
And I got an ad from.
From balance.
Quebec fastest wrenches internet.
Starting from $59 95.
So you can see the differences out there.
$25 and just beside the bell.
Hi.
We got a Virgin App.
This shows you know unlimited Internet for suite right.
You know our dollars per month.
So it shows up.
The ecosystem is competitive in Quebec.
And how also you know that this sub brand.
<unk> been certainly adding in fact.
Overall, and probably also the internet margins that we're able to deliver so wellness.
They are environment will.
We remain.
This obviously, we don't know, but we will certainly continue to offer what we consider being.
And the best customer service with the best product.
This has been a success.
Successful recipe for them to do it all over the last over 15 years.
And I guess that right now.
There's no real reason to change our.
Positioning and marketing strategy.
Yeah.
Alright next question comes from Tim Casey from BMO.
Go ahead Tim.
Yeah, a couple for.
A couple for me please thanks.
Could you talk a little bit about maybe just sort of walk us through the EBITDA performance in the fourth quarter. It was certainly below consensus and you mentioned a couple of items, but could you maybe walk us through you know what led to that end and what the outlook going forward.
It is particularly on the telecom line.
And I was wondering if I know you don't give guidance, but could you provide some sort of color on what your expectations would be for capex cash taxes, and capex cash interest and in 2022.
And then finally, if your peer Carl you know the.
The discussion of relative pricing you know for wireline.
A couple of markets.
You know theres a number of products that are.
Priced differently across the country.
<unk> still struggling with what what is the game plan for expansion outside of.
Quebec on the wireless side.
And it's we've debated this since the deal was announced but I'm just wondering how is your thinking evolving there because you know the market is clearly struggling with what the the the end game is for Quebec or thanks.
Okay.
Okay, Tim I'll start with your first question on EBITDA.
The story of the quarter basically on EBITDA.
And a couple of things starting in margin you will if you will I'm sure has seen.
The wireline margin.
Both broadband and cable and broadband.
It's more of a matter of.
The margin is if you look at it in detail.
Not really growing as much as we have grown accustomed on the broadband and most of the debt.
The main reason for that and it is hitting us increasingly and it hadn't been hitting us increasingly over the past few quarters and I think it's coming out.
Even more clearly in Q4.
And the first reason for that is the increasing.
A portion of the growth in our broadband are being attributable to <unk> and <unk>.
Is are we you know we do we talk at length of FIS and our success in in wireless is is that it is a huge success as well.
In broadband Yeah, I'll just you know just mentioned to you. All these all these prices you know I mean the market.
It seems to be very very different obviously in English Canada than it is in Quebec, but.
We're living in Quebec is very clear I mean people are our pricing down you know and where we're seeing growth where we're really successful is with FIS.
And I suspect that this is something that's going to continue and we don't see any we certainly don't see any reason for this to suddenly turn around and we.
We see our growth being increasingly.
Do this is as opposed at a lower price point, obviously as opposed to videotron and of course.
The <unk> Q4, and all the the broadband our view for the year for the quarter is mostly flat compared.
Compared to you know growth.
Growth that we had seen for.
A few quarters ago and that was increasingly are disappearing.
[noise] don't forget as well that we are comparing ourselves with a.
A quarter in 2020 that was very how would I call. It stable you know a much fewer disconnects.
You look at if you look at it I mean, we are comparing ourselves.
With us this year in terms of growth in broadband, we're comparing 44000 right for the year, we're comparing ourselves with last year was 69000, but in 2019. It was 23000, so let's not forget that 2020, both the year and the fourth quarter were also a little bit unusual.
Our comparable right.
Turning to cable I mean.
Cable is does that mean theres nothing you win in cable TV you know.
Cord cutting and cord shaving is clearly continuing.
I think you have to look at our performance. If you look at other cable codes are in.
In Canada, and what is the cause of Gorbachev's performance and if you look at the U S. As well cable calls you will see that you know that we're managing the situation comparatively well.
But I think all of that to say that the first story I think are the first explanation in a in.
In profitability for us in the quarter has to do with margin.
Wireline margin now of course in terms of Opex there.
There is a you know we are.
We have put in place many cost reduction initiatives and they are ongoing but I think we have to realize that we're in that what I would call sort of that in between phase, where we've added you know to beat to be honest for the past couple of years you know we've added platforms. We've added networks.
And we are transitioning we are migrating a lot of our customers a lot of our subscribers from from one platform, whether it's helix, whether it's a I mean, there are a number of initiatives on the go and we're in that sort of in between Tim that in between the phase where we've added.
A lot of cost structure, and we haven't yet.
We've taken some out of court.
But not as as much as we would've liked and then perhaps it's not going as quickly as we would've liked will own up to that but the fact is that we're not done yet and we're still in the midst of that of that transition in that migration that is in terms of maintenance cost in terms of support costs in terms of licenses in terms of people.
No.
Is really costing us quite.
Quite a bit.
So this.
This is what I would really point out in terms of in terms of EBITDA story for <unk>.
For the quarter in terms of Capex I think you asked me about Capex.
Capex I think it's important it's it's it's it's continuing to come down.
Continuing the same trend as the previous quarters.
A couple of things I mean of course, you know that on equipment, you know that that transition that I talk to us. So certainly the helix migration Youll remember that we moved from a a more capex intensive.
More opex intensive model. So certainly some of that so some of that Capex decrease as naturally just linked to equipment. Another big one is self install where are we continue to increase our performance in self install them and have been able to really lower runs our installation capex significantly.
They are increasing.
<unk>.
And we're up to we're up to 63% of self install so that's I mean, that's you know we're very very proud of that performance and it's finally, leading to the results that.
That we had been expecting I mean, there is still ways to go of course and on the digitalization of our of our client journey and all of that I mean, we're still as I said quite a few initiatives along the Gulf, but the self install is certainly a great success. That's that's certainly helping on the Capex side.
More generally, though I have to be.
You've talked about this in the past and I'll repeat it.
More discipline in terms of number of projects not the scope of Capex projects that are in and the prioritization as I'm sure. You know you know companies like videotron and in another telecom.
Telecom you know we have a lot of growth related a lot of strategic projects that get underway that get analyzed that that focus you know at the time of a lot of people and cost quite a bit and and I think we are where we are gradually.
And being a lot more disciplined about this as I said in terms of number of projects that are saying you know what that was started that is the scope of these projects in a more efficient prioritization of these projects leading to you know.
US being able to focus more on the growth and the disease. The projects that are linked to growth or impact on margin.
That we you know that we hope to continue to over the year in 2020 to deliver.
And as I said you know this is certainly I think the our catheter our lower capex should not be in any way interpreted in the way that we're not focusing on on on these growth and margin related projects I mean, LTE advanced since idea as I said in my speeches is certainly one of the big ones that we that we are maintaining and in many ways.
Increasing so.
I think that covers I. Thank you in terms of guidance wealth.
In terms of Capex I think our guidance at this point would be more of a stability on the Capex front for all the reasons I've just mentioned Tim.
You know, whether it's the equipment, whether it's our performance with her as our discipline.
We believe we're in a situation to be.
We're managing the situation better and I think we can look at stable Capex for 2022.
You know I won't give you more any more guidance on EBITDA of course other than I think you've asked about.
Theres nothing I don't think Theres any change that you should take in your model in terms of cash taxes, and and other cash flow related items.
I think again I point to stability on those fronts.
Does that answer your question. Thank you.
We will continue.
On top of a four years ago.
The last piece.
Of your of your question Tim.
Well first of all you know I'd like also to reemphasize, what you said on the on the Capex I think it's worth that dimension and this discipline is certainly not to the detriment of our five G deployment, our LTE advanced also.
So we will continue to make sure that our network as you know our and this is always part of our strategy and industrial slash marketing strategy for the last decade and more that our product was one of the best if not the best in the marketplace, we intend to do.
To do the same in the wireless business.
You know that.
Ah we're.
Yeah.
We were looking to add.
Because I think it's the best thing to do.
Regarding the the Canadian landscape. So we were expecting to build our network together with Rogers.
For whatever reason, which as you know we we claim right now former leadership I would say decided that a it's not the way to go we expect that the new leadership will review disposition because again, we still think that it's the best way to go.
No matter what is the case, we will continue to make sure that our network, we'll meet our customers' expectation and technology requirement to serve them.
On the on the out of Quebec, or rest of Canada strategy Timna.
I should emphasize the fact that Oh, we got everything.
First of all this is why we participate you know.
We participated in the in the auction.
Here are a few months ago. So we have the base of our future development.
<unk>, we bought spectrum in the markets, where we expect we think that would be interesting and growth to take place.
Yes.
Is it necessary dimensions that you know we have all the other assets as an operating company. So.
All of the expertise are all the bidding systems all of what is needed to be a telecom wireless company.
Is under a long time experiencing success of a telecom operator.
The missing piece is the regulatory framework.
We look forward to get the price obviously everything will.
It depends on the price that we will need to pay for this transition from <unk>.
<unk> to a full facility operator.
As you know.
This is different than.
And then the TPI a framework, we need to build our network.
So I'm not saying that we have a free lunch for their first year, but we have certainly.
A favorable environment, if the price was to be right and again it will depend of how strong is the desire of the state regulatory bodies to make sure that Canadian will endure and competition.
But we only have a button to push if we look to move forward in the wireless business for.
Or certain other regions.
In Canada, and we look forward for the CRT D.
I tried to hurry up this exercise, which is as you can imagine being.
Slowdown by by the incumbent that do not want to see competition.
Oh.
Thank you.
Okay.
Yeah.
Alright. Our next question comes from David <unk> from <unk> Securities. Please go ahead.
Hi, a couple of questions if I may am.
So just looking at the telecom that's not seen when you talked about margins being down on wireline I guess to the success it says internet.
But I was just in China, that's always.
Aggregate them wireless and wireline so it would appear to me that wireless is probably right.
The wireless team in Dallas by slot, yes on a year over year basis in the quarter does that is that a good way to look at it.
The wireless EBITDA, David Youre, referring to no the wireless is growing.
We don't we don't separate it as you know, but no that it's.
It's definitely it's definitely grown.
It's definitely gone okay.
Yeah.
The growth have been double digit year over year.
Uh Huh, Yeah, we're very close to the double digit.
Yeah, we're in that range.
Okay, Okay on wireless EBITDA, which you have.
Which leads obviously the math being the math to what I said earlier that you know.
Pressure on on wireline.
For all the reasons I talked about but I think you know our performance is honestly David this is more challenging in wireline and it has been for for.
For for some months now.
Whereas by you know I think wireless our growth is pretty good and.
You know our view our view is as you know has grown a little bit of this this this quarter despite what the.
The fact that same as my argument that that's you know that's a win for broadband also goes for them for a wireless of course that most of our growth a good chunk of our growth in wireless comes from fans as opposed to videotron at lower price points. So theres a natural erosion as we have lived through in for many quarters.
On the <unk> and now this quarter, we're seeing a little bit of an increase in <unk> I mean, <unk> is a bit of a different beast as you know.
With them within our case with with less of our growth.
Coming from you know equipment related packages, so maybe I'll say differently more of our growth coming from be it wouldn't be from B Y O D. Obviously, there's that impact on <unk>, but.
You know as today, we don't really think in our business that that <unk> is the right way to look at it because we love the Y O D R.
Our margins are really really good and it keeps us out of that subsidy game.
You know that as you know is is it can be quite expensive.
Although there is.
Still are quite a few subsidies in this quarter as you saw yourself so were not completely out of that game, but but b Y O D has certainly helped us.
Okay.
Because when you look at the supplemental it just disclose its mobile who so yes.
Yes, we're gonna that's.
We were talking about this I think we're going to do that in some of our competitors in and then go more towards the that the you know go back I guess to the <unk>.
That's a discussion that we used to have in the past, which I personally feel is is a bit more telling.
In our business.
So I know you I know you didn't provide guidance, but what the fourth quarter wireline results.
Sort of a new trend that we should expect <unk> to 2020 , two and beyond just like what just what the margin being downloaded.
Well, it's an ongoing you know David I'm, not going to I'm not going to you know blows smoke up whatever part of view you'd like but you know even though the market is not going to change overnight you know, it's a tough market.
Talked about this this is a very competitive market, it's a price a lot of pressure on price.
In wireline and wireless, yes, but that had been ongoing for some time.
And you know that seems to be quite different from the market and in the rest of Canada, but you know we.
We don't think we're going to be the last country in the world. When you look at what's happened in the U S and in Europe and all the other countries. So you know it's.
It's it's it's not unexpected I think it's going to continue to be to be quite a.
Quite competitive you know our main competitor in AR and in broadband is continuing to be very aggressive.
So yeah.
More pointed out towards a a continuing.
Environment.
That being said you know I pointed out to a lot of cost initiatives that were still.
Working on and as I owned up you know, maybe we haven't delivered as quickly as as we would've liked.
But we will get out of that that's sort of in between stage that I talked about earlier with him and I think theres still is there still is quite a bit of runway on the you know.
On the margin and the EBITDA growth front.
Okay.
So maybe.
A question from care Com I mean can.
Can you give us an update I don't know if you can but can you give us an update on there.
There are discussions with the competition Bureau regarding this Roger Shaw transaction.
And then maybe I don't know if you can but if you could share with us.
The outcome that they would like to see.
Well, David not really I would say you know what.
We we are obviously you know answering questions from the competition Bureau, I guess, they're looking you have to have as much as information as possible and they are certainly considered that we would be a good stakeholder.
Arco educate them on your own.
The market.
Wherewithal, so and certainly no one starts to find out we're not going to try to read in and tea leaves I don't know if I can say that.
But I guess that you know the landscape I've been at.
So quite a quite clear that the port competitor.
Is certainly something that.
Shows.
Competition bring.
Some significant advantages to customers.
Is this philosophy will remain also in terms of competition, there's always a few few different.
Perspective, you know what the answer Brett.
Our interpretation of the law, but we'll see we'll see.
And I guess that the conditions are are certainly very strong for this.
Part of the transaction.
Significantly reviewed by right now by the Bureau.
Mhm.
Okay alright, thank you.
Thanks, David.
Alright, and the last question, we currently have in the queue.
It comes from drew Mick Reynolds from RBC. Please go ahead.
Please go ahead.
Yeah, Thanks, very much good morning.
Couple of follow ups here.
In terms of fiber.
Fiber to the home expansion in your cable footprint.
You know obviously the olive garden.
Chunks of urban markets over the years.
It has there been any incremental impact of.
That expansion from a competitive standpoint.
And then just with respect to provision reversals.
We're kind of.
Comping off some.
Some choppiness here as we kind of look at it quarter by quarter.
Yeah.
Should there be additional kind of provision reversals going forward just provide an update there would be helpful.
Sure.
I'll answer your second question first.
Drew.
No you shouldn't get it you shouldn't get bogged down in provision reversal. You know year ends are always you know, whether it's bonuses or.
Readjustments. After you know as we're coming out of the pandemic for our bad debt adjustments and things like that but it's not it's not.
It really should not I mean, that's not the story and I'm not going to hide behind any of this and there shouldn't be I mean, theres nothing ahead of us that or that's holding that that's holding ahead of our on top of our head or anything like that so I wouldn't I wouldn't put a.
Much focus on that.
In terms of FTE T H.
Yes, Bill as you know as you know has continued very aggressively it's F dth deployment.
But you know we as we said in the past. Many times you know we are we believe we have the you know the the flexibility due to to.
To our technology and to be able to.
Go to the node as opposed to the home in many cases and and deliver a very you know.
Well, not only very similar but but but comparable.
<unk> performance.
As opposed to having to go all the way to the home because of coax.
That being said, we do and a lot of our extensions. We do go all the way to the home when it economically makes sense for us and we have done so in and in many cases.
So I mean, there are some obviously higher costs you know what.
Related to the year to going F Dth and Bell has certainly.
Played very well that that game over the past few years, but we believe we have been Oh, we.
We've been a little bit more.
How would I say I'm, not surgical but a little bit that you know having the opportunity of of.
Of being a little more an intelligent and economically.
We are prudent in our deployment and.
And that's.
That's been a that's been positive for us while still.
Continuing to deliver the same performance in.
And these new in these neighborhoods.
In and these notes.
So our understanding drew is that you know the the dth footprint Belden basically cover all our footprint.
So yeah.
Is there you know call Dr Goldberg.
Yet that we should expect the deployment of new technology.
We don't see it.
And as.
You said, yeah, you know, it's a 58% for me it was very expensive.
We're about to do so we do not know what is the bill in Quebec as you know Theres no breakdown between Ontario, and Quebec, and so when we compare we know that they are losing significant them up with customers regarding their satellite service.
But we do not really know you know where the small increase.
Flavor subscribers are located and from our standpoint.
Also what you said and this is a north American situation you know cable subscription.
Of this phenomena, which is whatever is shaving or cutting or never never.
No the Gordon numbers anymore.
We we all know it or.
From a young boy or a young Lady you know 18 to 20.
Well certainly while there is a high probability.
Getting out of all.
Not subscribe to cable.
Obviously, they will subscribe due to wireless and we were there to offer all sorts of good products. Whatever it is you do at home brand Arps is digital or conventional to call centers that service and broader we're all doing this but it's something again that the unknown.
Because the performance of Belmond, Quebec, I guess that if they don't want if we are not breaking down the numbers.
Is that basically probably because you do not have good numbers in Quebec.
Yeah Okay.
Thank you Curt called you just just two very quick follow ups, if I can on wireless <unk>.
As we kind of look at Q4, but probably more importantly, 2022.
Just remind us where we are in terms of kind.
Kind of where roaming level set.
What kind of if there was any impact in the quarter or Q1 of this year in terms of renewed restrictions in Quebec and then my second follow up just in terms of the government programs and the footprint expansion. When do you expect to begin kind of loading I think you had alluded to a little bit of loading in Q4, but it should just be.
Steady kind of ramp up.
Footprint penetration as you go through 2022.
Drew so on the on the <unk>, Yes usage I think your question if I understood you correctly. It was more of a specifically related to usage revenues right.
That's right, yes so.
What what what went on the way down is certainly the same on the way up you will remember that we had made the comment that.
Compared to some of our competitors and our larger peers and competitors, we did not decrease as materially as they did.
In terms of usage revenues. So now we're obviously not benefiting from that same swing.
Swing back up.
So.
It really wasn't material for us and so I can't really argue that it is that that is going to continue to be so I don't think thats going to play.
Much.
Much of.
I have much impact on the on the on the <unk> going forward I think it's you know and.
And in our case it is continuing to grow our view on all of our platforms and as I say I mean fifth we we had a very I wont give you the number but we are continuing and it's continuing to incur any of the increase in our view is actually increasing.
So that's good news and so we'll have a little bit less of that.
That impact that are that we keep talking about on the overall on the overall overall our view going forward those would be my my comments on that.
In terms of the.
The the government programs that the 37000.
Doors or or addresses that we will deliver.
We are yeah, we've delivered some but very few to be honest and these will come in on stream.
More gradually.
Over the next.
Six nine months I mean, you know by the end of September is what we expect that we will have delivered all 37000.
Okay.
I promise my last one just back to the <unk>.
The roaming impact for you.
Just remind us kind of where we are on the roaming side I know, it's not a big revenue stream, but.
I'm, sorry, I didn't I didn't I didn't hear your question I'm sorry, yes.
Yes, it just sounds like the international roaming.
Any roaming revenue that you get on wireless.
International roaming.
Alright, Okay, if there're some things that I couldn't I couldn't hear you very well I mean, theres, but yeah. I mean, it's some international roaming is back but as I said I mean, it's not it wasn't it's not a huge percentage of our of our our view you know and then they are much lower than our competitors and.
So some of it is back yet and I you know certainly in Q4 that has helped us a bit in there. There's some of it in the in the you know in the 28 cents there.
But.
But again, it's not it's not the main factor.
Super Thank you.
As I joke I would say you know through that there was a lot of Quebec or that went in Florida during christmastime and the all cotton Congress Colgate.
[laughter] so they stay probably longer. So this is why you don't roaming revenues went up a little bit.
Thank you.
Don't know against everything I've been saying [laughter] alright.
Alright, Thanks drew alright.
Alright, Bob.
We just have one last question, it's Jeff fan from Scotiabank.
Go ahead, Jeff.
Jeff. Please go ahead.
Thank you very much most of the questions have been answered, but I do want to clarify on a couple of things in the first is on the cost and the margins.
For your wireline business.
You you'd mentioned a phase two or phase having.
Having an impact.
Hum.
I'm interpreting that to be cannibalization.
Cannibalization, meaning like you're adding food subscribers at a lower <unk> and perhaps some of these are coming from videotron stepping.
Stepping down.
Am I correct in interpreting that as that's happening in your base.
It didn't seem to be as much of an issue in the past. So I'm just wondering if you can elaborate if that's our cogs.
Well I mean, there is some cannibalization, Jeff I'm not going to tell you that there is none but that's not the main factor. Yes. There is you know as we're growing fears.
More faster, yes. It is taking some from from Videotron for sure, but I think it's been taking a lot and we're talking wireline right. We're talking broadband now it's been taking a lot from the TPI as I mean, let's be honest and it's been a it's been taking some from from some of the other sub brands.
So that's where it's performing most I mean, but there is some cannibal cannibalization, but as you said yourself that it's.
It's no more material today than it was in the previous quarter. It's just my my comment was more just mathematically because most of our growth in broadband in the quarter.
Was it was a it was a result of a fifth new adds as opposed to videotron that at a lower price point that that.
Does that put pressure on our on our numbers.
Do you have that for some place to try to up to your surveys and focus more on the video Truong, Brian two turned out ARPA trend around.
Well, Yeah, I mean, we're as you know Jeff its not I mean, we volatile we're positioning our two brands very differently and we are focusing on different segments of the market.
And different a different.
Geographies and demographics of course with videotron being on the performing better on that on the higher end end or the higher price points and fears on the lower price points.
But you know so what I, what I think both Jack Allen I have pointed out a number of times I mean, the market is it's a competitive and it's a price sensitive market that we are living in and then in broadband it is increasingly.
Favoring.
Performance by <unk>.
Because that's where I.
That's where we're positioning it and work or more aggressive too.
To do exactly what you pointed out at the beginning and also lower as much as we can that that cannibalization between videotron and fifth.
I would say.
Certainly not invent sub.
Brandon you had been seeing sub brand.
Low cost in the telecom business everywhere in the world.
In other industries off so that was certainly you know I'm missing part of our offering and this is why you know we launched it a few years ago.
We're expecting you know.
A certain amount of kind of cannibalization for sure.
What we can say right now is that this auction is certainly much smaller than what we are getting out of the entire market.
On the premium side on to deal with Hollywood, We've been Blayne you know.
The quarter book play here for very long time.
I guess, that's what <unk> been doing in the west.
They were in a competitive landscape, but so again you know as what you said is a different market being addressed differently, where either the fifth brand.
Going in the sub brands market and there's fewer of them. There's no fido gobbling up I'm not on the wireline side, but there's certainly Virgin and many others TPI as where the other sub brands into wireless are also numerous.
Alright.
And then sticking to it they.
Thinking through cost you.
<unk> migration it seems like a big number this quarter and a big number for 'twenty one.
That must have been a big contributor if I interpret your comments to the cost because of the platform cost. So you have to pay Comcast without service I'm also interpreting that.
Those migrations are not necessarily coming with incremental revenue.
It's hard topic of impact on margins.
And my my reading that correctly.
AH Yes, yes, you are but you are.
Just before I answer that so I just wanted to make sure that on your previous question because one thing I didn't say is that this is margin keeps increasing right. So of course, there's some cannibalization of course, we're not going to you know we have 50% of the way of the broadband market there or thereabouts. So of course, there will be some cannibalization on video trial, but but but.
Margin as is <unk>.
It's it takes a higher proportion of growth its margin keeps increasing so is this just so that you know that's that's very clear now moving onto the migration the helix migration that you're that you're pointing out that's exactly what I was saying when I talked about the platform and I talked about cost.
It isn't that you know I think it's important one is that it is a somewhat expensive.
Migration for us, especially.
While that migration is is ongoing and before we can take out.
Entirely you know the cost base that.
That is linked with our more legacy systems and our legacy platforms.
And in terms of RF Q.
This is a different.
I'd say that yes. It is.
It's a premium product I mean, it's it's got more functionality, maybe I'll put it that way.
So in many ways I can point.
Points of IRR view, but you know at the end of the day, we're living in a in a competitive market you know.
We're our main competitor is a is as in many areas.
You know reducing prices and offering its a its platform it at lower prices. So we have to you know we have to respond and we have to play the game you know.
So when and I believe we've been in terms of growth in terms of net adds I think we've been playing in a rather well.
While keeping you know while keeping an eye on that.
On that margin that I talked about so I mean, it's you know it's a bit of a balancing act and.
And we will continue we will continue to balance these two things going forward.
Thank you and then just.
To follow up on with peer calls to just two quick ones just on the shelf.
It sounds to me peer called the <unk>.
You are now more focused on the N V and old path to expanding outside of Quebec for wireless as opposed to acquiring and freedom assets to expand in my am I reading that correctly, meaning that if you defuse all that successful in acquiring freedom, but the M. B N O is the path to go.
I would say not really Tim Jeff Kent.
I guess that you know there are two fronts there.
One we spoke about earlier regarding you know the competition Bureau.
So you know where we're going to wait until.
At the end of this process, which is facing another for with that.
With the Cit's seen them, so I guess both work.
In the same direction where guests.
Guess Canadian needs competition in one side, we have the assets you know to start.
And.
Again, depending on what will be the parents.
We will face we have a good idea about the parents you know what we know what our.
<unk> in the U S. We have also intelligence elsewhere in Europe , because I know it is not something.
Something that started yesterday, it's been there for a long time ever.
Everywhere.
So we.
We hope that the CRT D C will well listen you know to our representation because this intelligence is share with them.
So making sure that again, they really believe that theyre looking for competition and this is probably why they decided that they will go with this decision last July and therefore, you know, let's make sure that all of those conditions will be there. So you know overall I would say, it's a win win situation.
Both.
Both perspective are favorable to give that color.
Great. Thank you.
Alright, and that was the last question. We currently have in the queue.
Okay. Thank you very much at all and let's talk together at our next quarter meeting.
Ladies and gentlemen, this concludes <unk>, Inc. 's financial results for the fourth quarter and full year 2021 conference call. Thank you for your participation and have a nice day.
Okay.
Okay.