Q1 2022 BCE Inc Earnings Call

May 5, 2022

In 2022, and beyond although omicron undoubtedly, causing some near term disruption, notably for Bell business markets and media advertising, we achieved robust total revenue and adjusted EBITDA growth of two 5% and six 4% respectively. In Q1. This represents the first quarter in which our.

<unk> financial results surpassed pre COVID-19 levels.

The second year of our historic Capex acceleration programs in full swing with close to $1 billion of new capital spent in the quarter. We remain on pace to deliver approximately 900000, new direct fiber connections and further expand our <unk> service footprint to more Canadians, while also launching a standalone <unk>.

Core, notably on $3 five gigahertz spectrum.

With our mid term broadband internet built build out plan, 80% completed and <unk> network service available to more than 80% of Canadians by yearend, we expect capex to begin decreasing starting in 2023.

<unk> wireless performance in Q1 was a highlight as we continue to balance market share growth with operating profitability.

We led the industry once again this quarter in service revenue and EBITDA growth in fact at eight 7% we delivered our best quarterly wireless service revenue growth rate in 11 years. This is reflective of our consistent focus on high value postpaid growth and effective.

Fiber based management.

And our new unlimited Ultimate plans introduced in February truly demonstrate the value prop of five G and highlight bell mobility differentiated offerings, serving as a catalyst for the consumer upgrade cycle from <unk> to <unk> <unk> handset and service on.

On the enterprise side of things, our accelerated broadband investments mean that innovative applications solutions and platforms that rely on converged fiber and <unk> networks are becoming more widely available and our partnerships with leading hyper scaler will expand the use of multi access edge computing and other next Gen technologies.

Building on these partnerships and our unmatched network capabilities Bell was the first telco in the world to deploy Google distributed cloud edge for core network functions and important milestone that gives them the flexibility to deploy <unk> network functionality and a variety of different architectures and just last week, we launched.

The first public Merkin, Canada powered by AWS wavelength.

The inaugural AWS wavelength zone has been launched in the Toronto region with customers, including apparel retailer rucksack rollout food delivery service tiny mile and drone operator drone delivery, Canada, among the first to leverage this new <unk> infrastructure.

As I've stated before the demands of <unk> enabled network services and applications will require the fastest data speeds and the quickest response times to provide the very best user experience and in that regard our network capabilities and footprint breadth are unmatched.

We're not standing still in fact, just this past April we raised the bar with a widespread commercial introduction of a three gigabit symmetrical Internet service in most areas of Toronto. These are speeds that cable networks just cannot match and.

And in February we acquired Internet provider E box to strengthen our competitive position and accelerate our market share gains in the value seeking consumer segment of the Quebec market.

Even as we continue to build globally, leading broadband infrastructure Telecom services also remain affordable.

If you compare the cost for example of a telecom service bundle, let's say pure fiber Internet IP television and unlimited mobile data plans to the price of gasoline and average sized car would require a monthly minimum of probably around $400 and gas. This is approximately two times higher than the cost of a starter package.

From Bell, which would give you unlimited usage $24 seven every day of any given month.

According to the most recent stats can data the price of all goods and services in aggregate across the Canadian economy over the past two years has increased about 9% versus a decline of 26% per telecom services.

Turning to media, we continue to experience good momentum across our streaming distribution platforms and digital advertising markets total Craig subscriptions increased three 4% over last year, while customers on direct streaming service grew a strong 19%.

This together with our Canadian leading CTV Avon App continued rapid scaling of the Sam television advertising sales tool where year to date bookings are already 45% ahead of full year 2021 levels and our recently launched new <unk> digital platform contributed to exceptional digital revenue.

Growth of 84% this quarter.

And lastly on media fan dual North America's Premier online gaming company struck a multiyear agreement with TSN to become its official sports book partner beginning in Ontario.

Let me now turn to our strategic imperative to champion the customer experience.

Our customer experience focused culture enabled by the strong performance of our teams and investments in AI and machine learning capabilities continues to drive improved satisfaction loyalty and retention as you see in lower year over year churn rates across all our wireless and wireline retail residential services with <unk>.

<unk> like enhanced self serve and self install award winning apps move valet and virtual repair repair sorry Bell had the largest reduction in customer complaints among national providers in the latest report from the Cts with a 36% reduction over the previous year.

The share of Bell's overall complaints also decreased by 13%, reducing our share for seventh consecutive year.

So really if you take a step back kind of ticket took a view of the full picture. We're aggressively building out Nextgen digital networks, we are aggressively executing on our digital first media strategy, we're gaining subscribers share revenue and earnings growth is coming along with it and that's on the back of our digital networks and platforms.

We're digitizing our customer experience tools both of those we use to serve customers and those that our customers are using themselves and all of this is allowing us to stop using it to in fact, decommission legacy networks products and tools from copper to satellite technologies, where appropriate and beneficial.

I also wanted to highlight now a couple of developments on the ESG front following a formalization of our commitment in 2021 to hold bell to the highest ESG standards with the launch of Bell for better we've broadened our strategic imperatives to include sustainability directly in our corporate strategy consistently.

Consistently ranked as one of Canada's greenest employers, we've said increasingly ambitious environmental targets with our commitments for <unk> emissions and waste reduction.

These include a 57% reduction of our absolute scope, one and scope two emissions by 2030, the recovery of 7 million used TV receivers modems Wi Fi pods in mobile phones over the next two years and.

In reaching and maintaining a 15% total waste to landfill reduction ratio by 2025.

Reflecting our continued efforts to engage and invest in our people. We were recently named as a top family friendly employer one of the best workplaces for young people and young professionals as well as a top diversity employer for six consecutive.

A year in 2022.

Just for those following along I'm going to turn now to slide six.

Provide some.

An overview of some key operating metrics for the quarter I'll start first with wireless.

As I mentioned definitely a highlight this quarter, we added 34230, new net postpaid mobile phone subscribers, that's up 4% from last year really a great result, underpinned by our best ever Q1, postpaid churn result, which improved 10 basis points over last year and now sits at 79% for the quarter.

We also were even more targeted in our competitive approach as our objective is to get the right market share as I've mentioned several times in past quarters, we're really focusing on high value smartphone subscribers to grow service revenue and <unk>.

It's a disciplined approach for sure and it's paying dividends as you can see by our industry, leading <unk> growth and that was up an impressive five 1% in Q1.

This was supported by increased travel, which drove higher roaming volumes and higher monthly recurring charges due to a greater mix of customers on premium rate plans.

For mobile connected devices, the strategic focus remains on Iot subscriptions as innovative new business and consumer applications begin to emerge with <unk> and these increased six 5% over last year to.

To approximately 94000.

So thats, the wireless and let's move now to the wireline.

The fiber acceleration strategy is really working and we added more than 26000, net new retail internet customers and that represents a 23% increase over last year and if you look specifically at our fiber to the home footprint. We delivered an even stronger result, with 38049, new customer additions and.

And that once again drove strong residential internet revenue growth sitting at around 8% in Q1.

We also added 12260 net new IP TV subscribers, that's up 14, 6% versus Q1 last year and that's on the back of our customer segmentation approach and lower customer churn.

And satellite TV net customer losses, where for all intents and purposes stable year over year at just over 20000.

Home phone net losses improved 17% to 42345.

At the end of Q1, 91% of Bell residential households, with Internet and TV were on our fiber network.

At Bell Media. In addition to continued strong digital momentum television advertising demand in Q1 strengthened versus last year. Despite some advertisers pulled back in some sectors due to the omicron lockdowns and some supply chain disruptions.

This was the result of a fuller lives live sports programming schedule with more NFL playoff games are Super Bowl broadcast which was the most watched program in the quarter and that helped to keep TSN and Rds are top of the rankings again.

Continued strong specialty news performance in Nouvel.

Which continued to outpace all other French language conventional TV competitors in viewership growth with prime time audiences that were up 13%. This winter.

Taken altogether. These factors drove a 7% year over year increase in total television AD revenue. This was above pre pandemic levels for a third consecutive quarter and 11% higher than Q1 of 2019.

I'm going to hand, it over to Glenn in a second but before I do I'd like to acknowledge the bell team as we began our return to a new more flexible hybrid workplace in early April after a long two year hiatus, and I want to thank them for their outstanding support for one another and for our customers under very difficult circumstances.

What they've done in keeping Canadians connected and informed every single day has been nothing short of impressive I truly believe that our company has come out of Covid stronger were still in Goldman but we're coming out of this stronger we have an ambitious customer first and agenda. We have an ambitious network build agenda and we have our corporate purpose, that's clearer and more important than ever.

And on that over to you Glen.

Thank you Marco and good morning, everyone.

Another quarter of great execution by the Bell team to deliver a strong set of consolidated financial results and Q1 adjust.

Adjusted EBITDA was a highlight growing six 4% on year over year increases across all operating segments. Despite some COVID-19 related headwinds at bell business markets, which affected data products sales in the quarter.

Service revenue growth accelerated to four 2% on strong wireless residential internet and media results, which drove a notable one six inch.

The increase in margin to 44, 2%.

Further transparency our results. This quarter included a onetime retroactive adjustment to Bell media subscriber revenue normalizing for this one time retroactive adjustment consolidated EBIT growth for Q1 would have remained quite healthy at three 5%.

Net earnings increased 35% on the flow through of strong EBITDA growth as well as higher other income driven by a onetime gain from the sale of <unk> in March and a noncash mark to market equity derivative gain as a result of BCE share price appreciation in the quarter simulator. Similarly.

Adjusted EPS was up 14, 1% year over year to 89, reflecting a high EBIT contribution from operations and lower year over year pension financing costs, reflecting the strong net surplus position of our post entire post employment benefit plans I never get tired of saying that surplus position.

Capex this quarter was down slightly year over year due to the timing of spend we remain firmly on pace to invest around $5 billion in total this year.

As free cash flow as for free cash flow. Our Q1 result was in line with plan and reflected lower cash from working capital due mainly to timing of supplier payments, which should reverse out next quarter as well as an increase in interest paid on the higher level of outstanding long term debt.

Let's turn to wireless on slide nine.

Another set of exceptional financial results that led national peers once again for the fourth consecutive quarter.

Service revenue growth improved sequentially, increasing to eight 7% from six 3% in Q4. This strong acceleration reflects our even sharper focus compared to last year on high value postpaid and prepaid subscriber growth as well as continued recovery enrolling as international travel.

<unk> activity increases in fact roaming revenues exited the quarter at just below 80% of pre pandemic levels.

Product revenue was down three 8% as total transaction volumes continued to trend lower year over year, reflecting a sustained high proportion of new subscribers activating services with pre owned devices and longer handset the handset life cycles.

<unk> is financially attractive from both a working capital and a customer lifetime value perspective, finally wireless EBITDA also accelerated significantly growing nine 3%.

On the high flow through of strong service revenue growth and our disciplined and targeted responses to competitors' promotional offers which drove a one seven point year over year increase in margin to 45, 7%.

Turning over to wireline on slide 10.

<unk> grew a solid grew solidly year over year led by Internet revenue, which increased 8% on a combined impact of higher <unk> and.

<unk> market share gains.

However, total wireline revenue was down two 2% this quarter, reflecting a 28, 6% decline in product revenue as our business markets unit continues to experience near term headwinds from ongoing global supply chain shortages that are impacting equipment availability.

This does not only temporarily deferring product sales, but also delaying product spend.

Follow on business service solutions, we anticipate these pressures will continue to persist for the remainder of calendar 'twenty two.

Also weighing on our results. This quarter was an exceptionally strong demand for telecom data equipment in Q1 of 'twenty, one from public sector customers as well as the sale of Cree attack that I mentioned earlier.

That happened in early March.

Despite lower year over year revenue wireline EBITDA growth was positive increasing <unk>, 3%, reflecting a four 2% reduction in operating costs, which also supported margin expansion of one two percentage points to 45 four.

Let's turn to media on slide 11, another quarter of industry, leading financial performance in Q1 as growth across all Bell media platforms, including digital which increased as Merkle said, an outstanding 84% year over year.

That all drove a 15, 7% increase in total revenue.

Advertising revenue up eight 5%, reflecting continued strong television advertising demand, while the COVID-19 recovery and radio and out of home is progressing it is slower than expected in Q1 due to <unk>.

Subscriber revenue was 22% higher versus last year, reflecting continued strong creative streaming growth and the aforementioned onetime retroactive revenue adjustments.

Consistent with the year over year increase in revenue media EBITDA was up 45, 5%.

However, normalizing for the retroactive adjustment media EBITDA was down slightly year over year due to higher operating costs from the increase in live sports programming this year and higher broadcast license fees as the CRT C temporarily waived fees in Q1 of 'twenty, one due to the pandemic.

Finally, a quick update on our balance sheet and liquidity position on slide 12, our investment grade balance sheet is very healthy with available liquidity of more than $2 8 billion and our leverage ratio remained stable at three two times adjusted EBITDA.

During the quarter, we executed a highly successful public debt offering offering in the U S totaling $750 million USD.

Which was used to fund the early redemption of MTN notes maturing in early 'twenty three over the past two years, we've raised a record 10 billion of long term public debt locking in low rates before interest rates began rising while extending the average term to approximately 14 years and lowering the average.

After tax cost of debt to around two 8%.

With no near term refinancing requirements for the next 18 months.

All major DB pension plans in a surplus position that will enable cash flow.

Will enable cash contribution holidays to begin later this year and substantial free cash flow generation that is growing organically year over year, we have the financial strength to execute on all strategic and capital market priorities for calendar 'twenty. Two so with this positive start to the year together with combined operating momentum.

From across the business and our consistent proven execution in a competitive marketplace I am reconfirming all of our guidance targets for 2002 and on that I will now turn the call back over to thin and the operator to begin Q&A great. Thanks, Glen So before we begin I want to remind everyone that some time constraints. This morning because of our age.

Jim Thats, taking place shortly after this call to please limit yourselves to one question and a brief follow up if you must so we can get to as many of you as possible in the queue with that set of Lena we're ready to take our first question.

Thank you Mr. Fotopoulos. So if you have a question and you are using a speaker phone. Please lift your handset if we're making your selection you have a question. Please press star one on your device with Keybanc you may cancel your question at any time by pressing star queue. Please press star one at this time, if you have a question.

It will be a brief pause about the participants register thank you for your patience.

The first question is from drew Mcreynolds with RBC. Please go ahead.

Yes, thanks very much good morning.

Great.

<unk>.

And Glenn I'll say surplus position, just because you want to say it.

More frequently.

Got that.

Quick one quick.

Quick one for me.

Data consumption question.

Maybe starting with you Marco can you just give us an update on <unk>.

Internet data consumption household consumption and where do you see demand for those bigger.

Hi speed gig plan.

Going and then just a an equivalent question on what you are observing with <unk> handsets and data consumption. There as obviously you want to migrate folks up to the.

Larger data unlimited plan. Thank you.

Thanks drew good morning look I'll start with.

I'll start with <unk>.

We're definitely.

We are definitely at the beginning of the upgrade cycle from <unk> to <unk> and it's going well.

Customers on five Mg using <unk> handsets with <unk> plans are definitely consuming significantly more data and therefore, the monthly recurring revenue is higher from that base of customers. So that's quite encouraging and also especially encouraging to my mind anyway.

It's pretty obvious point I mean, it makes us not just in my mind is especially encouraging that steps are being taken in the marketplace to really monetize by G. Because we're making some massive investments here too to cover the entirety of the country with <unk>. It's capital intensive will also spent $9 billion as an industry for that spectrum. So we always.

They happen to monetize it and <unk> seen steps being taken particularly by us but by some of the others. So you have got the unlimited ultimate plans, which are trying to encourage customers to subscribe to the higher higher value unlimited plans.

Early days, but it's working and you see some some moves like speed tier caps along that unlimited.

Package set of plans so that's very positive on.

On wireline look.

I don't have the tips of my finger at my fingertips, the exact amount of household data that's being consumed.

I have.

A bit of confidence that there'll be significant demand for the higher speed tiers as we launch those more ubiquitously three gigabits per second upload and download frankly from us on fiber is just the beginning.

We're going to continue to to.

To be aggressive on that because we really do want to continue to lead on network superiority. It works for us and we as I said before I mean cable technologies just can't match, what we will be able to offer on speed. So as those become more ubiquitous as applications and usage becomes more prevalent.

Usage grows even more than that in the home. Those plans are going that are going to have ever more value for customers and as I have been talking here drew it's the average household usage per month is around <unk>.

Over 400 gig.

Sure.

Thank you for that.

Thank you. The next question is from David Barden with Bank of America. Please go ahead.

Hi, it's Matt Griffiths sitting in for Dave Thanks for taking the question.

So I just wanted to circle back maybe to the the onetime item.

And then the media segment, if you could just maybe elaborate on how much of that was in the quarter related to exactly and then there was a comment made about.

Capex decreasing in 2023, which obviously is the year when you're rolling off of the accelerated program.

Are you also referring to the kind of base rate capital intensity of 17 has the potential of stepping down in that year as well I just wanted to.

Sure.

Counting for the decrease correctly. Thanks.

Morning, Matt, It's Greg I'll handle the first part I think Merkel will make some comments on your on your questions regarding capital intensity.

And then in the quarter, we recorded approximately a $70 million retroactive btu adjustment, which related to content that bell media.

<unk> two to another the Btu and if I normalize for that on a consolidated basis.

The service revenue that we reported at four 2% would be two nine I mentioned in my opening remarks consolidated EBITDA would be three five now this effects our media segment. So if I look at media at 15, 7%.

Consulting.

Revenue growth in the quarter normalizing for this it would be about six and again as I mentioned in my opening remarks.

Although the EBITDA is a staggering 45% if I normalize for this $70 million it would be it would be slightly negative which is what we would have mentioned in Q1, we expected.

Covered with <unk> with.

With radio and out of home has been a little slower.

Due to omicron than we would have liked so so all in all a tremendous quarter across the board. Despite this retroactive BDO adjustment.

Hey, Matt.

On the Capex question.

Im going to give guidance for future years, either on the absolute capex spend or the capital intensity, but I'll give you a directional answer which I hope is helpful. So in the.

In the kind of short ish term, where we're trying to we're shortest horizon, we're trying to get to $10 million locations in our operating footprint with next generation broadband and I'd like that split to be around 9 million fiber homes in the 1 million wireless home Internet homes that we've already made our service avail.

<unk> two so that's how you'd get to 10 at the end of this year with the.

An accelerated Capex program will be in and around $7 1 million fiber locations.

So.

There is kind of a one eight to $1 9 million more fiber locations yet to do.

And I'd like to get those done by the end of 2025, so that kind of gives you a sense of the plan. So I can tell you on capex spend is the $5 billion or so that we're spending this year is our peak capex year, and then it's going to start coming down.

By how much we will have more to say on that is.

Next year comes but you have a sense of or what our journey is and the strategy is working and this is why we're doing this and really in a fairly short period of time with 9 million fiber locations and 1 million wireless home Internet locations, we really are building kind of <unk>.

Long life fiber infrastructure and to my investors should should be very pleased with that.

And we have a clear strategy, we're making the investments that supported our we've talked about in answering <unk> question I already talked about fiber superiority to cable technology, So I won't repeat that but but not only do we have a structural advantage over cable, but we also are miles ahead of.

<unk> of U S telcos on that journey.

And.

At the end of that $10 million location build that I've been talking about there's going to be some.

Some pretty strong free cash flow upside.

Alright, great. Thank you so much.

Thank you. The next question is from Stephanie price CIBC. Please go ahead.

Hi, good morning.

Following up on the last question just curious.

Telecom.

Any takeaways highlighted the fact that you are seeing more growth in fixed wireless.

Please go ahead.

Whether that will continue.

Auto rollout technology beyond me.

I think the 1 million to 1 million locations for US is the is kind of the right footprint.

What can you kind of go up and the margins are down on the margins as we do some fiber overlaying some communities sure, but kind of $1 million is the right. One it's a service that's really in our minds directed to a better use or better.

Utilized for rural and remote locations that otherwise wouldn't have access to fiber broadband in the near to medium term. So.

Thats, where it really does hunt.

Would not put wireless home internet up against fiber I, certainly wouldn't so fibers the long the short medium and long term goal here for us and again.

Reemphasize the benefit to investors over the very long term for bell to have built.

Long like fiber infrastructure.

Underestimate the value of that for the long term.

Great. Thanks, and just to follow up on the enterprise.

Wondering if you can quantify the impact hygiene issue.

Maybe if it's a big market.

Yes.

Look so we're not.

We're not immune to the supply chain challenges Thats for sure I mean, we've manage the handset supply in the consumer side fairly well so that hasn't that hasn't been an issue, but on business data equipment. It has had an impact there are some.

Long delivery cycles that we're having to contend with Glen Glen mentioned that.

In his opening remarks, so we're expecting that to continue for the balance of the year.

The current delays on order fulfillment.

Probably isn't going to subside in the near term. The good news is that's also having an impact on follow on service revenue that would be associated with with business equipment that would otherwise be supplying but it's not it's not a competitive issue, which is the really good news.

<unk>.

It's not like business is going to competitors. It certainly is not we're just going to have to.

The tough the tough it out through the the delays on fulfillment and then the revenues will come both on the product and the follow on service revenue side.

Great. Thank you very much.

Thank you. The next question is from Vince Valentini with TD Securities. Please go ahead, yes.

Yes, thanks, very much question on wireline revenue.

Your commentary to higher acquisition retention and bundle discounts on residential services was one of the factors for the service revenue decline.

Can you flesh that out a bit more or we just short of pendulum bouncing back to close to the middle after the pandemic when there wasn't much customer activity and therefore, not as much sort of promotional cost within your within your revenue or are we actually talking about elevated levels of competition starting to creep back.

Into the battle between you and and the cable companies and if so or if not is there any major difference by region or by province, and that competitive battle.

Good morning, Vince, It's Glenn I'll make a few comments here I don't know if <unk> wants to add anything but.

For your information is perfect. This isn't.

A significant step up in promotional activity, it's more of a return to historical norms. After we went through such quiet period of <unk>.

Promotional activity during the pandemic, so I would say, there's nothing alarming hair events in our eyes, it's more of a return to return to historical norm.

No that's great Glen maybe a quick because that was a quick answer I'll do a quick follow up void Zane draft. The <unk>.

91% figure out still.

What it means 91% of your customers that take Internet and TV your own fiber to the home is that just within areas, where fiber is available or are you seeing that as a crusher entire footprint even though.

<unk> 40, 35% or 40% of your homes still don't have access to fiber.

Former Vince so its 91% of.

TV and internet customers in fiber footprint or on the fiber network.

Completely and therefore that kind of speaks to.

So theres, 9% there in fiber footprint that we need to migrate from some type of copper service might be home phone to.

<unk> fiber and then on the copper decommissioning journey that I introduced or hinted at in the last quarter and that we're really looking at very closely this year in terms of a plan a year. So that we can kind of attack copper decommissioning.

At scale against for a better word for lack of a better word in 2023 and beyond.

And the 91% the same as last quarter, but I assume that just because the fiber footprint is growing youre still migrating people, but the denominators changing.

Got it got it.

Hey, guys. Thanks.

Thank you. The next question is from Chaparral <unk> with Deutsche Bank. Please go ahead.

Hey, good morning, everyone. Thanks for taking my question.

First one is on the <unk> trend.

During the quarter, obviously, we have the data for the whole quarter, but I'm trying to assess the impact of the <unk> of January with Omicron here was there a material difference between the period during which there were restrictions and when the economy was more reopened and then second.

In terms of your guidance.

We had a broader range than usual.

The pandemic is now better understood. We've seen a company that they are increasing its guidance would it be fair to assume you maybe now expects EBITDA.

And toward the higher end of your guided range now thanks.

Good morning, Jerome, it's Glenn I'll handle the last part first.

The guidance ranges that we provided I reconfirm. This morning, we remain very comfortable with those ranges are accurate depiction of where we'll end up and I'm not going to guide.

With more specificity on where we fit into that guidance.

And in ARPA growth on January versus February versus March and they don't really have much to add there. There is not much frankly, the deviation between the three months, but let me since you raised <unk>, Let me, let me provide a little bit more color on <unk> growth certainly the roaming rebound was a factor there but.

It accounted for.

Just about half or slightly more than half of the <unk> growth.

So nowhere near the full growth is accounted for by roaming Im really pleased with that because it really demonstrates.

Healthy mix in the business.

Yeah.

We've got we've got roaming that was part of it but nowhere near the entirety of it so you're really talking about some strong organic growth there in terms of.

Showing that the strategy that we.

On is working.

Okay. That's helpful. Thanks, Thank you Daryl.

Thank you. The next question is from David Joyce with Barclays. Please go ahead.

Thank you very much.

A question on the <unk>.

G box acquisition.

What should.

Should we.

From a product and subscriber roadmap from this.

What does the leverage ability of this asset into other geographies. If you could please provide some more color on that thank you.

Yes. So you asked some pretty some pretty important strategic questions, there, which kind of I'm not going to disclose on a call for competitive reasons, let's just leave it at.

Kind of repeat what I said in my opening remarks, it's it was an important strategic acquisition for us because it will allow us to be even more competitive than we currently are particularly in the.

Value conscious segment of the Quebec market. So we're going to continue to be competitive with the pressure on in the province of Quebec, both with our aggressive fiber expansion.

And the continuation of the E box service in the box brand.

Okay I appreciate that thank you.

Thank you. The next question is from Simon Flannery with Morgan Stanley . Please go ahead.

Thank you very much good morning.

The churn was very impressive down about 10 basis points year over year. If you looked at the U S. Guys. They were up a couple of basis points year over year. So it'd be great to just unpack that a little bit in terms of what youre seeing.

Voluntary voluntary churn and how we should think about your ability to sustain or even improve from here.

Well, maybe I'll take the very last part of it and Glenn if you have anything to add please do so sustainability I think I think well I hope it is because we are doing.

Doing a number of things we've been doing a number of things strategically to get churn down. So clearly the customer first approach that we're on is working so we have better customer experience overall, we are offering tremendous overall value whether or not it's on pricing on quality <unk> et cetera, and certainly we are at the forefront of that but the industries.

Doing a tremendous job overall installment plans the launch of those a couple of years ago. Certainly has helped churn in my view.

And devices are lasting longer which is helping.

Churn and then on the involuntary churn is stable and that voluntary churn is down.

Exactly.

And just as Merkle said.

We're seeing lower transactions in the industry and that obviously benefits all in churn.

To your point incredibly pleased with with our postpaid churn in the quarter at $1 7 million in the improvements quarter over quarter and year over year.

Great. Thank you.

Thank you. The next question is from Sebastian <unk> with Jpmorgan. Please go ahead.

Thank you just following up on the wireline segment I think Glenn you talked about Opex down 4% there on a year on year basis outside of perhaps the lower margin product sales that perhaps didn't come through anything else to unpack there what youre seeing perhaps related to <unk> question on the net.

We're commissioning.

Any underlying drivers we should be thinking about there as it pertains to the rest of the year outside of perhaps the product sales impact.

No I mean, obviously when we have.

<unk> product sales both in our wireless segment and in our wireline segment.

We're starting to see that play out in margin expansion low margin low margin product sales not there so naturally the consolidated.

Margin improves coupled out with on our wireless.

Segment, we had a significant flow through of roaming which comes at extremely high margin. So that drives margin expansion on the consolidated business as well.

You mentioned copper decommissioning easier early days, it's a little early for that but more we continue to rollout fiber, though everywhere, we roll out fiber, we start to see reduce truck rolls improved operating and <unk>.

I mentioned, 4% to 4% is our is our net improvement when you consider that we are absorbing inflationary pressures, which affect both wages and benefits and in our business fuel fuel probably will cost us a $15 million to $20 million more this year than a normal than <unk>.

Last year due to the escalating prices that that 4% is even more impressive. So it's really just.

Blocking and tackling.

Being cost conscious as we always are trying to find improvements reducing calls into our contact centers are doing a really good job with self serve and fiber is the gift that Jim.

Keeps on giving everywhere, we would expand fiber, we have lower cost to operate and.

As Mark mentioned earlier with our aggressive fiber program go forward I'm pretty excited about the future and what that's going to do for us on cost benefit to be pretty blunt in the copper decommissioning journey has.

Pretty much not.

<unk> started so thats not the benefits youre seeing in this quarter arent because of copper decommissioning, although it's a very important.

And significant future tailwind that's for sure.

Great Great and so maybe youre getting some of the lower customer service costs.

Business.

Our fiber customers, but the decommissioning spill later lager data and kind of.

Great.

Okay.

Anything on the wireless postpaid loading environment obviously.

It seems to be pretty solid across the industry any update perhaps on <unk>.

On a full year basis.

Well I think.

I think.

On postpaid loading we're pleased with with Q1 that's for sure.

The team executed very well and as of yet.

As you've heard me say before including this morning, where we're very targeted on the high value smartphone category and.

I would say getting even more targeted.

In that category itself and you can see the benefits in our financial results I mean, theres not theres, a FERC looking forward I think.

If you look back a couple of the last couple of quarters, including this one that we're reporting on the operating momentum has been good and it's clearly continuing and it looks like good growth across the industry. So we continue to have things like immigration upside.

Easing of the store constraints in early <unk> momentum in the.

The roaming bounce backing.

Hazard to say that competitive intensity between two potentially merging parties isn't quite there as it used to be and thats, probably benefiting the entire industry. So I'd say those are those are the elements that are.

That.

That I look at to see how things are going to go in future quarters, and it's looking good.

Thanks again.

Thank you. The next question is from David Mcfadden with Cormack Securities. Please go ahead.

Just a question on the retail internet so when youre looking at presentation.

We had 38000 fiber to the home that add the total retail Internet net adds in 2016 last 12 on DSO I was just wondering how is that compared to the prior year like in terms of DSL subscriber losses, and then quickly just on <unk> can you just confirm that most of their sons Videotron and I guess it would be logical.

And over time, you're trying to move those tons from video turnover tier network. Thanks.

So the I mean, the exact I don't have at my fingertips, the exact ratio of this quarter compared to previous quarters on DSL versus fiber, but it has been a trend for several quarters that a consistent trend that we are fiber loadings.

Our higher than the net loading as you see and we are waning and fiber footprint and where we're losing subscribers in copper footprints. So that continues to be the case on a box not to give a precise numbers I won't do that but yes strategically those box subscribers that are on our competitors' network, we will migrate over time to our network.

Kirk.

Okay.

Yes.

Thank you. The next question is from Jonathan <unk> with Canaccord Genuity. Please go ahead.

Good morning, Thanks for taking my question I wanted to start off with with a fall.

Follow up.

Michael you talked about.

What you would describe as the beginning of the upgrade cycle.

Hi Chi.

Thinking about the consumer side, you've already launched GSM type C, but I wanted to get a sense.

Do you have visibility is around the sophistication of consumable applications that are on the horizon because.

Sort of more more advanced applications that would sort of really kind of pushed that migration that along but wanted to get your thoughts on that and then.

On.

A more general level in wireless I mean, some of the U S telecoms have kind of talked about.

Some impact from the economic clouds are we starting to see including in store traffic.

Maybe some other items as well I just wanted to get a sense of looking at April maybe are you seeing any signs of that at all in that in Canada.

Good morning, Erinn I'll handle the last part before Murdo discusses the migration from <unk>, but no is the short answer we're not seeing any economic impact even in April the challenges of inflation or that the strong economy or is not impacting I think we're still in many regards coming out.

Covid, albeit it feels at times, it's two step forward one step back our store traffic and I think consumer confidence to start moving around again.

I think driving more of an impact in any economic headwind is so the short answer is area that are not feeling any impacts and that would be true of April as well.

Most importantly.

As Canadians get more and more confident we're excited that we will see more foot traffic back into our stores to more pre pandemic levels.

Yeah and on the <unk> upgrade cycle urban die.

In the early days really what's driving it likely just a better experience on the network faster lower latency.

Better more powerful handsets I think thats, what thats whats driving the initial upgrade cycle.

And we are doing our part trying to create consumer awareness and buzz around the power of <unk> and you referenced TSN Rds five GPU and that certainly has worked to elevate the brand awareness of the power of <unk> and the brand awareness of balance being at premium <unk> network.

In terms of what's next.

Yes, I think I think the limits.

Probably.

Imagination is the limit.

It would be like 10 to 15 years ago, when you move to <unk> and who would have foreseen at the very very very beginning.

To the extent.

The apps that would be unveiled for the consuming public to enjoy on their handsets and I'm expecting the same kind of thing with with <unk> and.

I'm also expecting it on the on the enterprise side and a completely different way.

Low latency converged fiber and <unk> with.

With Mac.

Cloud et cetera. So.

I think theres a lot of a lot of potential there on both the consumer side and the business side of course.

Thank you.

There are no further questions registered at this time I will now turn the meeting back over to Mr. Fotopoulos. Thank you Elena so I want to thank everybody for their participation on the call. This morning.

I will be available throughout the day for any follow up questions or clarifications. So have a great rest of the day everybody.

Thank you everyone. Thank you.

Thank you.

France has now ended.

Please disconnect your lines at this time and we thank you for your participation.

Thank you.

The conference has now ended please disconnect your lines at this time and we thank you for your participation.

[music].

Good morning, ladies and gentlemen, welcome to the BCE Q1, 2022 2022 results conference call I would now like to turn the meeting over to Mr. Thane Fotopoulos. Please go ahead. Mr. Fotopoulos. Thank you Elena and good morning to everybody. It's good to be back with all of you this quarter hosting today's conference call.

As usual here with me today are Mark how Vivek Bce's President and CEO .

And our CFO Glen Leblanc, you can find all of the relevant Q1 documents on the Investor Relations page of the BCE CA website, which we posted earlier. This morning. However, before we begin I'd like to draw your attention to our Safe Harbor statement remind you that today's slide presentation and remarks made during the call will include forward looking statements.

And information and therefore are subject to risks and uncertainties results could differ materially we disclaim any obligation to update forward looking statements, except as required by law. Please refer to our publicly filed documents for more details on assumptions and risks with that out of the way I'll hand, it over to Marco.

And good morning, everyone. We've had a very positive start to the year, our dedicated bell team. Once again delivered strong operational financial results driven by consistent and disciplined execution, leading broadband networks and services and our focus on service excellence all underpinned by a set of strategic initiatives that have guided us.

For the past two years as you know and that will continue to guide us in 2022 and beyond.

Although omicron undoubtedly is causing some near term disruption, notably for Bell business markets and media advertising, we achieved robust total revenue and adjusted EBITDA growth of two 5% and six 4% respectively. In Q1. This represents the first quarter in which our consolidated financial results surpassed.

Pre COVID-19 levels.

Core, notably on $3 five gigahertz spectrum with our mid term broadband Internet built build out plan, 80% completed and <unk> network service available to more than 80% of Canadians by yearend, we expect capex to begin decreasing starting in 2023.

Bell's wireless performance in Q1 was a highlight as we continued to balance market share growth with operating profitability. We led the industry. Once again this quarter and service revenue Arco and EBITDA growth in fact at eight 7% we delivered our best quarterly wireless service revenue growth rate.

11 years. This is reflective of our consistent focus on high value postpaid growth and effective subscriber base management.

Building on these partnerships and our unmatched network capabilities Bell was the first telco in the world to deploy Google distributed cloud edge for core network functions and important milestone that gives <unk> the flexibility to deploy <unk> network functionality and a variety of different architectures and just last week, we launched.

The first public Merkin, Canada powered by AWS wavelength. The inaugural AWS wavelength zone has been launched in the Toronto region with customers, including apparel retailer run sacked robust food delivery service tiny mile and drone operator drawn delivery, Canada. Among the first to leverage this new <unk> infrastructure.

But we're not standing still in fact, just this past April we raised the bar with a widespread commercial introduction of a three gigabit symmetrical Internet service in most areas of Toronto. These are speeds that niche cable networks, just cannot match and.

And in February we acquired Internet provider E box to strengthen our competitive position and accelerate our market share gains in the value seeking consumer segment of the Quebec market.

Even as we continue to build globally, leading broadband infrastructure Telecom services also remain affordable.

From Bell, which would give you unlimited usage $24 seven every day of any given month.

This together with our Canadian leading CTV Avon App continued rapid scaling of the Sam television advertising sales tool where year to date bookings are already 45% ahead of full year 2021 levels and our recently launched newborn for digital platform contributed to exceptional digital revenue grow.

Of 84% this quarter.

And lastly on media fan dual North America's Premier online gaming company struck a multiyear agreement with TSA to become its official sports book partner beginning in Ontario.

Let me now turn to our strategic imperative to champion the customer experience.

The share of Bell's overall complaints also decreased by 13%, reducing our share for seventh consecutive year.

So really if you take a step back and take a took a view of the full picture. We're aggressively building out next Gen digital networks, we're aggressively executing on our digital first media strategy, we're gaining subscribers share revenue and earnings growth is coming along with it and that's on the back of our digital networks and platforms.

We're digitizing our customer experience tools both of those we use to serve customers and those that our customers are using themselves and all of this is allowing us to stop using its in fact, decommission legacy networks products and tools from copper to satellite technologies, where appropriate and beneficial.

I also wanted to highlight now a couple of developments on the ESG front following the formalization of our commitment in 2021 to hold bell to the highest ESG standards with the launch of Bell for better we broadened our strategic imperatives to include sustainability directly in our corporate strategy.

Consistently ranked as one of Canada's greenest employers, we've said increasingly ambitious environmental targets with our commitments for <unk> emissions and waste reduction.

These include a 57% reduction of our absolute scope, one and scope two emissions by 2030, the recovery of 7 million used TV receivers modems Wi Fi pods in mobile phones over the next two years and.

And reaching and maintaining a 15% total waste to landfill reduction ratio by 2025.

Just for those following along I'm going to turn now to slide six.

Provide some.

An overview of some key operating metrics for the quarter I'll start first with wireless.

It's a disciplined approach for sure and it's paying dividends as you can see by our industry, leading <unk> growth and that was up an impressive five 1% in Q1.

This was supported by increased travel, which drove higher roaming volumes and higher monthly recurring charges due to a greater mix of customers on premium rate plans.

To approximately 94000.

So thats, the wireless and let's move now to the wireline.

And that once again drove strong residential internet revenue growth sitting at around 8% in Q1.

We also added 12260 net new IP TV subscribers Thats up 14, 6% versus Q1 last year and that's on the back of our customer segmentation approach and lower customer churn.

And satellite TV net customer losses, where for all intents and purposes stable year over year at just over 20000, while home phone net losses improved 17% to 42345.

So if you put it altogether accelerated fiber expansion customer experience improvement lower customer churn and the best product offerings are continuing to drive more and more customers onto bell five at the end of Q1, 91% of Bell residential households, with Internet and TV were on our fiber network.

This was the result of a Fuller life live sports programming schedule with more NFL playoff games are Super Bowl broadcast which was the most watched program in the quarter and that helped to keep TSN and Rds atop the rankings again continued.

Strong specialty news performance and novel <unk>.

Which continued to outpace all other French language conventional TV competitors in viewership growth with prime time audiences that were up 13%. This winter.

Taken altogether. These factors drove a 7% year over year increase in total television AD revenue. This was above pre pandemic levels for a third consecutive quarter and 11% higher than Q1 of 2019.

What they've done in keeping Canadians connected and informed every single day has been nothing short of impressive.

I truly believe that our company has come out of Covid stronger were still in Goldman but we're coming out of this stronger we have an ambitious customer first and agenda. We have an ambitious network build agenda and we have our corporate purpose, that's clearer and more important than ever and on that over to you Glen.

Thank you Marco and good morning, everyone. Another quarter of great execution by the Bell team to deliver a strong set of consolidated financial results and Q1 adjust.

Service revenue growth accelerated to four 2% on strong wireless residential internet and media results, which drove a notable one six point increase in margin to 44, 2%.

Net earnings increased 35% on the flow through of strong EBITDA growth as well as higher other income driven by a onetime gain from the sale of <unk> in March.

And a noncash mark to market equity derivative gain as a result of BCE share price appreciation in the quarter simulator. Similarly, adjusted EPS was up 14, 1% year over year to 89, reflecting a high EBIT contribution from operations and lower year over year pension financing.

Costs, reflecting the strong net surplus position of our post entire post employment benefit plans I never get tired of saying that surplus position.

Capex this quarter was down slightly year over year due to the timing of spend we remain firmly on pace to invest around $5 billion in total this year.

Let's turn to wireless on slide nine.

Another set of exceptional financial results that led national peers once again for the fourth consecutive quarter.

As activity increases in fact roaming revenues exited the quarter at just below 80% of pre pandemic levels.

And our customer lifetime value perspective, finally wireless EBITDA also accelerated significantly growing nine 3%.

Turning over to wireline on slide 10 residential grew a solid grew solidly year over year led by Internet revenue, which increased 8% on a combined impact of higher <unk> and continued market share gains.

This does not only temporarily deferring product sales, but also delaying product spend.

Follow on business service solutions, we anticipate these pressures will continue to persist for the remainder of calendar 'twenty two.

Also weighing on our results. This quarter was an exceptionally strong demand for telecom data equipment in Q1 of 'twenty, one from public sector customers as well as the sale of Korea tax that I mentioned earlier.

That happened in early March.

And that all drove a 15, 7% increase in total revenue.

Subscriber revenue was 22% higher versus last year, reflecting continued strong creative streaming growth and the aforementioned onetime retroactive revenue adjustments.

Consistent with the year over year increase in revenue media EBITDA was up 45, 5%.

During the quarter, we executed a highly successful public debt operating offering in the U S totaling $750 million USD.

After tax cost of debt to around two 8%.

With no near term refinancing requirements for the next 18 months all major DB pension plans in a surplus position that will enable cash flow yes.

From across the business and our consistent and proven execution in a competitive marketplace I am reconfirming all of our guidance targets for 2002 and on that I will now turn the call back over to Dane and the operator to begin Q&A great. Thanks, Glen So before we begin I want to remind everyone that some time constraints. This morning because of our age.

<unk>, that's taking place shortly after this call to please limit yourselves to one question and a brief follow up if few months. So we can get to as many of you as possible in the queue with that settling in and we're ready to take our first question.

Thank you Mr. Fotopoulos. So if you have a question when you're using a speaker phone. Please lift your handset if we're making your selection. If you have a question. Please press star one on your device with Keybanc you may cancel your question at any time by pressing Star. Please press star one at this time, if you have a question.

It will be a brief pause with participants register thank you for your patience.

The first question is from drew Mcreynolds with RBC. Please go ahead.

Yes, thanks very much good morning.

Great.

<unk>.

And Glenn I'll say surplus position, just because you want to say, it's a little bit more frequently.

Got that Tom just a quick one.

Quick one for me, it's a data consumption question.

Maybe starting with you Marco can you just give us an update on.

Internet data consumption household consumption, and where you see demand for those bigger.

Hi speed game plan.

Going and then just an equivalent question on what you are observing with five G handsets and data consumption. There as obviously you want to migrate folks up to the.

Larger data unlimited plan. Thank you.

Thanks drew good morning look I will start with.

I'll start with <unk>.

We're definitely.

So yes, we're definitely at the beginning of the upgrade cycle from <unk> to <unk> and it's going well.

Customers on five key using <unk> handsets with <unk> plans are definitely consuming significantly more data and therefore, the monthly recurring revenue is higher from that base of customers. So that's quite encouraging and also especially encouraging to my mind anyway, well pretty odd.

At this point Im going to makes us not just in my mind is especially encouraging that steps are being taken in the marketplace to really monetize <unk>, because we're making some massive investments here too to cover the entirety of the country with <unk>. It's capital intensive will also spent $9 billion as an industry for that spectrum. So we obviously have in them.

Monetizing <unk> seen steps being taken that particularly by us but by some of the others. So you have got the unlimited ultimate plans, which are trying to encourage customers to subscribe to the higher <unk>.

Higher value unlimited plans.

Early days, but it's been working and you see some some moves like speed tier caps along that unlimited.

Package set of plans so that's very positive on.

On wireline look.

I don't have the tips of my finger at my fingertips, the exact amount of household data that's being consumed.

I'll have <unk>.

A bit of confidence that there will be significant demand for the higher speed tiers as we launch those more ubiquitously three gigabits per second upload and download frankly from us on fiber is just the beginning.

Borgwarner continue to too.

To be aggressive on that because we really do want to continue to lead on network superiority and works for us and we as I said before I mean cables technologies just can't match, what we'll be able to offer one speed. So as those become more ubiquitous as applications and usage becomes more prevalent.

Usage grows even more than that in the home. Those plans are going that are going to have ever more value for customers and as I've been talking here drew it's the average household usage per month is around <unk>.

Over 400 gigs.

Super.

Thank you for that.

Thank you. The next question is from David Barden with Bank of America. Please go ahead.

Hi, it's Matt Griffiths sitting in for Dave Thanks for taking the question.

So I just wanted to circle back maybe to the the onetime item.

It is in the media segment you could just maybe elaborate on how much of that was in the quarter related to exactly and then there was a comment made about.

Capex decreasing in 2023, which obviously is the year when you're rolling off of the accelerated program.

Are you also referring to the kind of base rate capital intensity of 17 has the potential of stepping down in that year as well I just wanted to make.

Make sure.

The accounting for the decrease correctly. Thanks.

Good morning, Matt, It's Glenn I'll handle the first part I think Merkel will make some comments on your on your questions regarding capital intensity.

And then in the quarter, we recorded of approximately $70 million retroactive btu adjustment, which related to content that Bell media.

<unk> II to another the Btu and if I normalize for that on a consolidated basis.

The service revenue that we reported at four 2% would be two nine I mentioned in my opening remarks consolidated EBITDA would be three five now this.

Effects, our media segment, so if I look at media at 15, 7%.

Consult their revenue growth in the quarter normalizing for this it would be about six and again as I mentioned in my opening remarks, although the EBITDA is a staggering 45% if I normalize for this $70 million it would be it would be slightly negative which is what we would've mentioned in Q1, we expected.

Recovered with.

With radio and out of home has been a little slower due to omicron than we would have liked so so all in all a tremendous quarter across the board. Despite this retroactive BDO adjustment.

Came out and on the on the Capex question look I'm not going to give guidance for future years, either on the absolute capex spend or the capital intensity, but I'll give you a directional answer which I hope is helpful. So in the in the kind of Shortish turn where we're trying to our shortage.

Eison, we're trying to get to $10 million locations in our operating footprint with next generation broadband and I'd like that split to be around 9 million fiber homes in the 1 million wireless home Internet homes that we've already made our service available too. So that's how you'd get to 10 at the end of this year with the accelerated capex.

Program will be in and around $7 1 million fiber locations.

So.

Or is there is kind of about one eight to $1 9 million more fiber locations yet to do.

I'd like to get those done by the end of 2025, so that kind of gives you a sense of the plan. So I can tell you on capex spend is the $5 billion or so that we're spending this year is our peak capex year, and then it's going to start coming down.

By how much we will have more to say on that as <unk>.

Next year comps, but you have a sense of are of what our journey is and the strategy is working and this is why we're doing this and really in a fairly short period of time with 9 million fiber locations and 1 million wireless home Internet locations. We really are building kind of a long life fiber infrastructure.

And to my investors should should be very pleased with that.

And we have a clear strategy, we're making the investments that supported our we've talked about in answering <unk> question I already talked about fiber superiority of the cable technology, So I won't repeat that but but not only do we have a structural advantage over cable, but we also are miles ahead of.

<unk> of U S telcos on that journey.

And.

At the end of that $10 million location build that I've been talking about there's going to be some.

Some pretty strong free cash flow upside.

Alright, great. Thank you so much.

Thank you.

Next question is from Stephanie price CIBC. Please go ahead.

Hi, good morning.

Following up on the last question just curious telecom.

Basically highlighted the fact that they are seeing more growth in fixed wireless.

Updated thoughts and fixed wireless whether it's now considering the broader rollout of the technology beyond the one already.

I think the 1 million to 1 million locations for US is the is kind of the right footprint.

We'll kind of go up beyond the margins are down on the margins as we do some fiber overlaying some communities sure, but kind of $1 million is the right. One it's a service that's really in our minds directed towards better use or better.

Utilized for rural and remote locations that otherwise wouldn't have access to fiber broadband in the near to medium term. So.

That's where it really does hunt I would not put wireless home internet up against fiber I certainly wouldn't so fibers. The long the short medium and long term goal here for us and again.

Reemphasize the benefit to investors over the very long term for bell to have built.

Long like fiber infrastructure, and you can't underestimate the value of that for the long term.

Great. Thanks, and just to follow up on the enterprise wondering.

I Wonder if you can quantify the impact from the supply chain issue.

Maybe you can give us a bit more than.

With that rolling out.

Yes.

Look so we're not.

And we're not immune to the supply chain challenges Thats for sure I mean, we manage the handset supply in the consumer side fairly well, so that hasnt that hasnt been an issue, but on business data equipment. It has had an impact there are some.

Long delivery cycles that we're having to contend with Glenn.

Glenn Glenn mentioned that.

And in his opening remarks, so we're expecting that to continue for the balance of the year.

The current delays on order fulfillment.

It's not like businesses going to competitors. It certainly is not we're just going to have to tough the tough it out through the.

The delays on fulfillment and the revenues will come both on the product and the follow on service revenue side.

Great. Thank you very much.

Thank you. The next question is from Vince Valentini with TD Securities. Please go ahead, yes.

Yes, thanks, very much question on wireline revenue.

Your commentary to higher acquisition retention and bundle discounts on residential services was one of the factors for the service revenue decline.

Into the battle between you and and the cable companies and if so or if not is there any major difference by region or by province, and that competitive battle.

Good morning, Vince, It's Glenn I'll make a few comments Aaron I know Michael wants to add anything but.

For your information is perfect. This isn't.

A significant step up in promotional activity, it's more of a return to historical norms. After we went through such a quiet period of <unk>.

Promotional activity during the pandemic, so I would say, there's nothing alarming hair events in our eyes, it's more of a return to return to historical norm.

No that's great Glen maybe a quick because that was a quick answer I'll do a quick follow up void Zane draft. The <unk>.

91% figure out still.

What it means 91% of your customers that take Internet and TV youre on fiber to the home is that just within areas, where fiber is available or are you seeing that as a crusher entire footprint even though.

40%, 35% or 40% of your homes still don't have access to fiber to.

The former Vince so its 91% up.

TV and internet customers in fiber footprint on our fiber network.

Completely and therefore that kind of speaks to.

And theres, 9% their fiber footprint that we need to migrate from some type of copper service might be home phone to fiber and then on the copper decommissioning journey that I introduced or hinted at in the last quarter and that we're really looking at.

Very closely this year in terms of a plan a year. So that we can kind of attack copper decommissioning.

At scale against for a better word for lack of a better word in 2023 and beyond.

And the 91% the same as last quarter, but I assume that just because the fiber footprint is growing youre still migrating people but.

Denominator is changing.

Got it.

Thank you guys. Thanks Vince.

Thank you. The next question is from chaparral <unk> with <unk>. Please go ahead.

Hey, good morning, everyone. Thanks for taking my question.

First one is on the <unk> trend during the quarter, obviously, we have the data for the whole quarter, but I'm trying to assess the impact of the <unk> of January with Omicron here was there a material difference between the period during which there were restrictions and when the economy was more reopened and then second in terms of.

Of your guidance.

<unk> had a broader range than usual.

The pandemic is now better understood we've seen it come sit there increasing its guidance would it be fair to assume you maybe now expects EBITDA.

Land toward the higher end of your guided range now thanks.

Good morning, Jerome, it's Glenn I'll handle the <unk>.

<unk> first in.

The guidance ranges that we provided I reconfirm. This morning, we remain very comfortable that those ranges are accurate depiction of where we'll end up and I'm not going to guide.

With more specificity on where we fit into that guidance.

And in our growth on January versus February versus March and they don't really have.

Much to add there there's not much frankly in the deviation between the three months, but let me since you raised <unk>, Let me, let me provide a little bit more color on <unk> growth certainly the roaming rebound was a factor there but.

It accounted for.

Just about half or slightly more than half of the <unk> growth.

So nowhere near the full growth is accounted for by roaming Im really pleased with that because it really demonstrates a healthy mix in the business.

Yes.

We've got we've got roaming that was part of it but nowhere near the entirety of it so you're really talking about some strong organic growth there in terms of.

Showing that the strategy that we are on isn't working.

Great. That's helpful. Thanks, Thank you Joe.

Thank you. The next question is from David Joyce with Barclays. Please go ahead.

Thank you very much.

Question on the.

<unk> acquisition.

What should we.

Expect from a product and subscriber road roadmap from this.

What does the leverage ability of this asset into other geographies. If you could please provide some more color on that thank you.

Yes. So you asked some pretty some pretty important strategic questions, there, which kind of I'm not going to disclose on a call for competitive reasons I'll just leave it at.

Kind of repeat what I said in my opening remarks, it's it was an important strategic acquisition for us because it will allow us to be even more competitive than we currently are particularly in the.

Value conscious segment of the Quebec market. So we're going to continue to be competitive and put the pressure on in the province of Quebec, both with our aggressive fiber expansion.

And the continuation of the E box service in the box brand.

Okay I appreciate that thank you.

Thank you. The next question is from Simon Flannery with Morgan Stanley . Please go ahead.

Thank you very much good morning.

The churn was very impressive down about 10 basis points year over year. If we looked at the U S. Guys. They were up a couple of basis points year over year. So it would be great to just unpack that a little bit in terms of what youre seeing.

Voluntary voluntary churn and how we should think about your ability to sustain or even improve from here.

Well, maybe I'll take the very last part of it and Glenn if you have anything to add please do so sustainability I think.

I think well I hope it is I mean, because we're doing we're doing a number of things we've been doing a number of things strategically to get churn down so clearly the.

The customer first approach that we're on is working so we have better customer experience overall, we are offering tremendous overall value whether or not it's on pricing on quality <unk> et cetera, and certainly we're at the forefront of that but the industry is doing a tremendous job overall installment plan the launch of those a couple of years ago.

It really has helped churn in my view.

And devices are lasting longer which is helping.

Churn and then on the involuntary churn is stable and that voluntary churn is down exactly that Simon just as Merkle said.

We're seeing lower transactions in the industry and that obviously benefits on footfall and churn and to your point incredibly pleased with with our postpaid churn in the quarter of $7 million in the improvements quarter over quarter and year over year.

Great. Thank you thanks Simon.

Thank you. The next question is from Sebastian <unk> with Jpmorgan. Please go ahead.

Thank you just following up on the wireline segment I think Glenn you talked about Opex count, 4% there on a year on year basis outside of perhaps lower margin kind of product sales that perhaps didn't come through anything else to unpack there what youre seeing perhaps related to this question on the net.

We're commissioning.

Any underlying drivers we should be thinking about there as it pertains to the rest of the year outside of perhaps the product sales impact.

No I mean, obviously when we have.

Low product sales both in our wireless segment and in our wireline segment.

Youre starting to see that play out in margin expansion low margin low margin product sales not there so naturally the consolidated.

<unk>.

Margin improves coupled out with on our wireless.

Segment, we had.

A significant flow through of rolling which comes at extremely high margin. So that that drives margin expansion on the consolidated business as well.

You mentioned copper decommissioning. These are early days, it's a little early for that but more we continue to rollout fiber, though everywhere, we roll out fiber, we start to see reduced truck rolls or improved operating and.

Last year due to the escalating prices that that 4% is even more impressive. So it's really just.

Blocking and tackling being.

Being cost conscious as we always are trying to find improvements reducing calls into our contact centers are doing a really good job with self serve and fiber as a gift.

It keeps on giving everywhere, we would expand fiber, we have lower cost to operate and as merkle.

<unk> mentioned earlier with our aggressive fiber program go forward I'm pretty excited about the future of what that's going to do for us on cost benefit.

It can be pretty blunt I mean copper decommissioning journey is.

Pretty much.

Not started so thats not the benefits youre seeing in this quarter arent because of copper decommissioning, although it's a very important.

And significant future tailwind that's for sure.

Great Great and so maybe youre getting some of the lower customer service costs.

Business.

Our fiber customers, but the decommissioning spill later lager data kind of benefit.

Got it.

Anything on the wireless postpaid loading environment, obviously trends seem to be pretty solid across the industry any update perhaps on <unk> and how youre thinking on a full year basis. Thanks.

Well I think I.

I think.

On postpaid loading we're pleased with with the Q1 that's for sure.

The team executed very well and as again as you've heard me say before including this morning, where we're very targeted on the high value smartphone category and I.

I would say getting even more targeted.

In that category itself and you can see the benefits in our financial results I mean, theres not theres, a FERC looking forward I think.

Easing of the store constraints in early <unk> with momentum in the.

The roaming bounce backing.

That.

I look at to see how things are going to go in future quarters, and it's looking good.

Thanks again.

Thank you. The next question is from David Mcfadden with Cormack Securities. Please go ahead.

Just a question on the retail internet so when youre looking at presentation.

You had 38000 fiber to the home that add back the total retail Internet net adds in 2016 last 12 and B. It sounds just wondering how is that compared to the prior year like in terms of DSL subscriber losses, and then quickly just on <unk> can you just confirm unless theres, some videotron and I guess it would be logical.

And over time, you're trying to move those tons from video turnover here network. Thanks.

Our higher than the net loading as you see and we are gaining in fiber footprint and where we're losing subscribers in copper footprints. So that continues to be the case on a box not to give a precise numbers I won't do that but yes strategically those box subscribers that are on our competitors' network, we will migrate over time to our network.

Kirk.

Okay.

Yes.

Thank you. The next question is from Jonathan.

<unk> <unk> with Canaccord Genuity. Please go ahead.

Good morning, Thanks for taking my question.

To start off with a follow up Michael.

Michael you talked about.

Which you've described as the beginning of the upgrade cycle from <unk> to <unk>.

Thinking about the consumer side, you already launched GSM type C.

But I wanted to get a sense.

Your visibility is around the sophistication of consumable applications that the horizon because it is.

Sort of mall mall, I guess advanced applications that would sort of really kind of pushed that migration.

To get your thoughts on that and then.

Awesome.

A more general level in wireless I mean, some of the U S telecoms have kind of talked about.

Some impact from the economic clouds are we starting to see including in store traffic.

Maybe some other items as well I just wanted to get a sense of looking at April maybe are you seeing any signs of that at all in that in Canada.

Good morning, <unk> handle the last part before Murdo discusses the migration from <unk> to <unk>, but no is the short answer we're not seeing any economic impact even in April the challenges of inflation or that the strong economy or is not impacting I think we're still in many regards coming out of.

Covid, albeit it feels at times, it's two step forward one step back.

Store traffic and I think consumer confidence to start moving around again.

I think driving more of an impact on any economic headwind is so the short answer is area that are not feeling any impacts and that would be true of April as well I think most importantly is.

As Canadians get more and more confident we're excited that we will see more foot traffic back into our stores to more pre pandemic levels.

Yeah and on the <unk> upgrade cycle urban die.

In the early days really what's driving it likely just a better experience on the network faster lower latency.

Better more powerful handsets I think thats whats thats whats driving the initial upgrade cycle.

And we are doing our part trying to create consumer awareness and buzz around the power of <unk> and you referenced TSN Rds five gave you and that's certainly has worked to elevate the brand awareness of the power of <unk> and the brand awareness of <unk> being at premium to <unk> network.

In terms of what's next.

I think I think the limits.

Our imaginations as the limit.

It would be a bit like 10, 15 years ago, when you move to <unk> and who had foreseen at the very very very beginning.

The extent.

Of the apps that would be unveiled for the consuming public to enjoy on their handsets and I'm expecting the same kind of thing with with <unk>.

And I'm also expecting it on the on the enterprise side and a completely different way.

With low.

Low latency converged fiber and <unk> with Mac.

Cloud et cetera. So.

There's a lot of a lot of potential there on both the consumer side and the business side of course.

Thank you.

Thank you there are no further questions registered at this time I will now turn the meeting back over to Mr. Fotopoulos. Thank you Elena so I want to thank everybody for their participation on the call. This morning.

I will be available throughout the day for any follow up questions or clarifications. So have a great rest of the day everybody.

Thank you everyone. Thank you.

Thank you.

The conference has now ended.

Disconnect your lines at this time and we thank you for your participation.

Thank you.

The conference has now ended please disconnect your lines at this time and we thank you for your participation.

Q1 2022 BCE Inc Earnings Call

Request a DemoDemo

BCE

Bce

Earnings