BCE Inc. Q1 2023 Earnings Call
Corded sets calls the homes that don't go as you see standby. Your conference is ready to begin good morning, ladies and gentlemen, and welcome to the BCE Q1, 2020, 'twenty results Conference call I would now like to turn the meeting over to Mr. Fotopoulos. Please go ahead, Sir Thank you good morning.
Everyone and thank you for joining our call today and here with me our president.
Current.
And our future.
And current treasurer.
Corporate strategy Curtis smell. It you can find all of our Q1 disclosure documents on the Investor Relations page of the BCE Web site, which we posted.
Before we begin.
Want to draw your attention to our safe Harbor statement on slide two reminding you that todays slide presentation and remarks made during the call will include forward looking 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 bce's.
The filed documents for more details on assumptions and risks with that I'll turn the call over to.
The Bell team delivered operating results for Q1 that were in line with our plan performance for the quarter, we've been making some significant investments in the past three years and they are bearing fruit and you can see in our continued operational momentum and particularly this quarter you can see it in our strong three 5% consolidated revenue growth and as expected.
And as we profiled internally in our quarterly budget for 2023, adjusted EBITDA decreased year over year due to a $67 million favorable one time retroactive revenue adjustment in Bell media in Q1 of last year.
Near term cost pressures from inflation strategic initiatives and the normalization of our cost structure to pre pandemic levels.
In line with our accelerate accelerated Capex program for 2023, we spent close to $1 $1 billion of new capital in Q1 and that keeps us on pace to deliver another 650000, new direct fiber connections and to grow our <unk> service footprint to 85% of the country and it will also enable standalone <unk> plus.
Service for almost half of Canadians by the end of the year. The generational investments, we're making to build the best networks are consistently being recognized by third parties for superior network quality and speed for our low latency and the best overall experience and.
And we're leveraging our world leading broadband infrastructure, our focus on service excellence and customer value proposition to offer the best networks at affordable prices and to deliver economically accretive subscriber additions across all our products and you can see that in our Q1 operating results.
Growth of five 4%.
Going forward, we're seeing very good growth catalyst for accelerated accelerating excuse me immigration levels penetration headroom the ongoing transition of five G. We're bundling wireless with Internet service as well as retail channel expansion with partners, including Staples, which we've talked about before and most recently air Canada, which we announced.
Just a couple of days ago earlier this week rather against this backdrop, we're expecting to use our proven execution and operating momentum to drive our fair share of customer growth and a competitive market.
On the fixed side of the business.
Fueled by our growing fiber footprint, we continue to gain a significant share of new Internet subscriber growth. We added 47757, new net fiber to the home customers in Q1, and that's up 24% over last year.
This brings the total number of fiber subscribers to approximately $2 5 million or 57% of our total retail internet customer base and of these close to 1.1 million are taking speeds of one gigabit or better which contribute it to bells industry, leading consumer internet revenue growth of 10%. This.
This quarter.
These results are a testament to the power of fiber based Internet service that provides the fastest dedicated symmetrical speeds that cable just cannot match Bell has the broadest multi gig footprint with three gigabits per second or higher speeds now available to more than 5 million locations and at the end of this year $4 million of those will have.
Access to symmetrical speeds of eight gigabits per second.
It's a major competitive differentiator and this will keep US sustainably ahead of any of our peers.
We also continued to advance our cloud capabilities through an expanded partnership with Palo Alto networks for cloud security solutions and the acquisition of FX innovations, which is a leading Quebec based it services and consulting company, which has a specific expertise in digital workflow automation, we announced that today and that'll.
Further accelerate our growing team of cloud certified professional services employees.
These developments are the latest building blocks and strengthening <unk> position as a tech services leader for enterprise customers.
Let me turn to media now despite an advertising market that continues to face near term headwinds headwinds across the continent digital AD revenue was up 4% over last year and that's a positive results certainly.
When you think about the current market backdrop generally.
On the customer experience front, we continue to focus on serving customers on their terms. We've introduced the self serve Wi Fi optimization tool and we've improved our self serve guides with step by step processes for same day service Activations and we expanded our manager appointment application.
Our customer first approach is clearly, making a difference and you can see that in the latest results from the Cts.
That's C. Cts report that I'm, referring to shows fell as the only national service provider to experience a decrease in complaints with a 6% reduction even as complaints were up 12% across the industry.
In fact bell share of complaints has decreased 16% over the past year and impressively, 55% over the past five years really really proud of the team on this in the end of our progress generally.
We've achieved our financial and operating results against the backdrop of wireless prices that have remained essentially stable even as the Canadian economy continues to face a sustained inflation.
If you refer to the latest stats can data the price of all goods and services in aggregate has increased four 3% over the past year, but if you look at the cost of cellular services, they've risen only like 3%.
And I want to highlight for you a few notable es G accomplishments as well.
You'll see that this was the first year that Bel issued an integrated annual report it's a first for a major communications company in North America we.
We also ranked third among global telecom companies in corporate Knights 2023, Global 100 ranking of the most sustainable corporations in the World and we were right rated highly in the sustainable investment category and that was driven by our investments in fleet electrification electric vehicle charging stations renewable energy alter.
It is an energy savings.
And reflecting our ongoing efforts to engage and invest in our people Bell was named by immediate Corp. As a top family friendly employer in Canada for an 11th consecutive year as well as one of the best workplaces for young people and young professionals in recognition of our graduate leadership and internship programs.
I'll turn now if you're following the slides I'm going to turn now to slide six.
Take a look at some of the operating metrics for Q1, I can start with wireless.
We added 43289, new net postpaid mobile phone subscribers, that's up 26, 5% from last year pretty strong results in what is typically a seasonally slower quarter for acquisitions.
This was a function of an 18% increase in gross activations and that was driven by higher retail traffic as pandemic related restrictions. We are still in place in the early stages of Q1 of 2022 population growth continued <unk> momentum and healthy business customer demand.
Although customer churn increase year over year, which reflected greater overall market activity was still well below pre pandemic levels at 9%.
Our ARPA was up 9% and that's our eighth consecutive quarter of growth. This was supported by further roaming revenue improvement and now sits at 129% of pre COVID-19 levels.
And our continued focus on higher value subscriber loadings.
And with only 44% of postpaid customers currently are <unk> capable devices. The vast majority of which are subscribing to premium unlimited data plans, we're seeing good RFP support going forward, despite competitive pressures on base rate plan pricing and the financial impact of the ongoing shift to installment plans.
For mobile connected devices net adds were up 45% over last year to 70742 and that was driven by continued strong customer demand for Bell's Iot solutions.
Let's turn to wireline now.
We added 27274 total new net retail internet customers and that's up 5% versus last year, but that number includes the competitive loss of DSL subscribers in our in our non fiber footprint.
But as I already mentioned fiber net subscriber additions were much stronger at 47757.
We also added around 11000, net new IP TV subscribers, that's down slightly versus last year, but we expected this due.
Due primarily to higher customer the activations on our five TV streaming service after last year's FIFA World Cup.
Satellite TV and home phone net losses, both increased modestly compared to Q1 of last year due to a step up in promotional offer intensity with a full return to pre COVID-19 levels of competition.
Over at Bell media now our.
<unk> demand held up reasonably well under the current circumstances and comparatively better than our peers and this was the result of our TV broadcast the World Junior Hockey and the Super Bowl and it shows if you've got strong content that viewers flocked to it's going to deliver value to advertisers and advertisers are play.
<unk> value on premium sporting events and that also helped TSN and Rds maintain the number one rankings in Q1.
And allowed us to continue to grow in digital advertising, which I mentioned before but really does bear repeating.
Outlook. So in terms of our outlook for the balance of 2023 for media the AD recession should begin to stabilize and improve gradually later in the year.
Over at Crave, we continue to deliver with total subscribers up 6% over last year and we're now more than $3 2 million subscribers. This was underpinned by a 24% increase in direct to consumer streaming subscribers.
And we also recently launched our TSM plus streaming product, which allows sports fans to access augment and feeds multitask and other feature content, that's incremental to the premium sports content that we're delivering across the flagship TSN platform.
On the French language TV front, we once again led all competitors in Q1 in the specialty market, including news and sports, while continuing to grow viewership with Buzzworthy programming, such as survivor, Quebec, which premiered in early April on Bell medias conventional TV channel Nouvel.
Lastly.
You will have seen our press release from us the other day announcing a landmark long term an exclusive licensing deal with Warner Brothers discovery that builds on our previous agreement from 2019, the deal ranges across many parts of their vast portfolio of content. It includes HBO and Max originals, the DC universe the Wizard.
During world of Harry Potter, New cable series Library television series pay at postpaid window rights for Warner Brothers films, and Library films as well as French language rights across a wide range of content.
Our valuable long term HBO deal basically just got longer and broader than that it's going to provide further compelling content supporting our made in Canada Crave TV service streaming TV service of course in summary, a solid start to the year with results directly on plan for Q1 and results that again rich.
<unk> teams consistently strong execution.
Confident and will further extend this proven track record throughout the remainder of 2023.
So I'm going to hand, it over to Glenn and just a moment.
But first obviously I want to acknowledge the news we issued this morning that Glenn will retire as CFO effective September one.
Under Glenn's leadership as you all certainly know Bell has attained a solid financial position with a robust balance sheet substantial cash flow and pension solvency and all of that has helped us accelerate bell's capital expenditures to expand our fiber and wireless networks and position us competitively and strategically for years and years to come.
On behalf of everyone at personally want to thank you Glen for your exemplary leadership and invaluable contributions to the company and to the executive team and to me personally. Thank you Curtis currently SVP corporate strategy and treasurer will be promoted to CFO effective September one.
Curtis has a deep background in the financial industry and strategic leadership here at Bell and he's well positioned to take on the CFO role and work closely with Glen and with me during the remainder of 2023 and beyond to ensure a successful transition.
Glenn again huge thank you to you and of course, you're not going very far you'll be right back here with me in August and Curtis for our Q2 results and Curtis Congrats and with that over to you Glen.
Thank you Marco and good morning, everyone before I get started I want to express my gratitude to Morocco, and the entire Bell team for 30 incredible years, as Merkle mentioned and I want to reinforce Curtis is well positioned to take on the CFO role and is a strong leader who will guide bell.
Through the next generation, he and I will work closely together through the remainder of 2023 to ensure a smooth transition.
And now on to results, we had a positive start to the year with strong three 5% consolidated revenue growth that was achieved despite lapping a one time $67 million retroactive revenue adjustments at Bell media and coping with the economic conditions that continue to impact media advertising.
And the B to B sector.
Normalizing for this one time revenue adjustment from Q1 2022 revenue was up nearly 5% this quarter a very strong result, driven by continued robust wireless and internet growth.
A notable recovery in the business data equipment sales.
While this revenue strength did not flow to the bottom line. This quarter. Our EBITDA results are very much expected and are fully reflected in our internal forecast given the aforementioned one time revenue adjustment that bell media last year as well as the known near time incremental cost pressures from inflation in our strategic initiatives.
Higher TV content and product.
Programming costs.
And normalization of the cost structure to pre COVID-19 levels.
Adjusting for just the media, one timer and normalizing for the TV hockey schedules this year.
Underlying consolidated EBITDA growth in Q1 was close to 2%.
Net earnings and adjusted EPS were also down year over year, mainly the result of the lower expected EBITDA increased interest expense due to higher rates.
Depreciation and amortization expense as more capital assets are being put into service consistent with our accelerated broadband network build out plan.
Our net earnings results. This quarter also included an asset impairment charge related to the consolidation of real estate space due to Bell's hybrid work policy.
And he box were largely offset in the quarter by lower sales of international wholesale long distance minutes, which can be quite lumpy and the sale of Korea Tech in March of last year.
On the product side very strong growth with revenue up 24% year over year. This.
This was attributable to hire business data equipment sales and improved product availability compared to the shortages, we experienced last year.
As well as a greater sales mix to higher value mobile phones and more overall contracted device transactions.
Notwithstanding close to 5% increase in total Cts revenues Q1, EBIT growth was more modest at 1.3%.
This was the result of some near term expected cost pressures that I described earlier, which contributed to an 8.1% increase in operating costs this quarter.
As we cycled through some of these added cost we expect a stronger EBITDA growth trajectory for the balance of 2023 as was contemplated in our quarterly budget that we profiled for the year.
Over to Belle media on slide 10, as projected and in line with our budget total revenue was down.
In Q1, decreasing five 5% year over year, despite an ongoing despite the ongoing AD recession, that's reflected global advertising markets.
That's affecting global advertising market excuse me advertising revenue for Q1 held up better than we expected going into the quarter and.
Much better than our peers.
This can be attributed to a diverse asset mix and focused execution on our digital first transformation strategy.
Subscriber revenue declined 4% due to the aforementioned one time retroactive revenue adjustment that we'd left from last year, which was also a major contributor to the 36, 5% decline in Bell Medias EBIT done this quarter.
Normalizing for this one timer from Q1 22, EBITDA was down only 6%.
That's pretty good performance, given the macroeconomic context, and the very much anticipate and very much anticipated, giving the normalization of hockey schedules. This year.
And the content cost inflation for premium sports.
And entertaining programming.
Turning to the balance sheet on slide 11.
Are consistently strong operational and financial performance supports a robust balance sheet and liquidity position, which totalled $3.7 billion at the end of Q1 of that majority schedule remains very well structured with an average debt to majority of around 13 years and a low after tax cost of debt.
Of just 2.9%.
Additionally, our balance sheet strength is further enhanced by a sizable pension solvency surplus amounting to 3.7 billion.
And substantial recurring free cash flow generation that is reliable and well protected from macro uncertainty.
Let's turn to slide 12, B, CS fundamentals and competitive position remain as strong as ever with the financial results. We delivered Q1, we are right on our internal plan.
Which may not have been obvious to the street is we don't provide quarterly guidance.
Together with continued operating momentum across the business and are consistent proven execution in a competitive marketplace I am reconfirming all of our guidance targets for 2023.
And on that note I will turn it back over to you. Okay. Great. Thanks, So before we start the Q&A I want to remind everyone that you see some time constraints. This morning, because of her ATM taking place right. After this call.
Limit yourselves.
Answer your question.
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Ready to take our first question.
Thank you.
Not the question.
If you had a question and you are using a speakerphone. Please list to hand said before making your <unk>.
Yeah.
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<unk>.
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My first question is do make my nose from I B C. Please go ahead.
Yeah. Thank you very much and good morning, and Glenn Congratulations it's been great working with you and I'm sure everyone will will share the same sentiments you've been fantastic.
Due to a couple a couple of questions for me sorry, I missed some of the the opening remarks just on the.
I think the street, you know was well aware of the slower start to the year, just give us a tough cop on the EBITDA side.
You know when you see it improving year over year for the remainder of the year is that more or less a straight line.
I normally don't.
Kind of as the performance of of of any company directly relative to competitors, but certainly.
The mobile postpaid and it adds notably.
In line with expectations, but notably below.
Rogers was able to put up in a quarter.
I'm just wondering from your perspective, you know what you thought the market dynamics were in the quarter and with respect to cue to just the overall strength of the wireless market is it continue thank you.
Thank you drew all jumping on the first before Marco gives his remarks I made it 30 years without giving quarterly guidance. So I guess I won't start now what I would say as as I look out to the back half of the year of the back three quarters, we remain very confident under the guidance, we have given nature EBITDA as I said in my opening remarks, we were laughing I'm pretty tough.
Comp for Q1 due to that one time retroactive adjustment in the normalization of hockey schedules I normalize for those are just sub two per cent I expect that to ramp each quarter go forward and and quite confident or very confident in the ability to deliver on the guidance provided.
Thank you for your comments through.
And on the second on the second drew up really quite sad quite happy actually with with our wireless result completely.
Completely on plan and what we want it what we set out to achieve for the beginning part of the year Q1s.
For us and generally speaking before us as a seasonally slower quarter and we were closely watching promotional activity in Q1 fact pulled back on hardware pricing in Q1 quite deliberately and we're glad to see handset discounting come down in January January generally and remain pretty.
Manageable and again I've talked about this over and over.
Again, since becoming a C E O over three years ago, where we watch closely or.
Our mix.
Across the brand the family of brands and we had record Bell mix on gross adds in on that ads and and that's the right way to go because it drives organic revenue growth going forward and again just disappointed after you ones always seasonally light, but really strong if you compare two hour on prior Q once we're up 26 and a half.
Percent so.
Really happy with with where we are eight consecutive quarter of our crew growth whichever pointed out in the in the opening remarks, probably saw it in in our.
Release, but certainly pointed that out any remarks. Thank you.
Sprinkle with thank you.
Thank you.
Question, you Summer Mayor Yankee from Scotiabank. Please go ahead.
Yes. Good morning, Thank you for taking my questions and Glenn It was a great working with you always very easy and meticulous on the financial so you'll be missed.
I wanted to ask you a question.
Now that's the Rodgers merger is complete.
Merkel when does the presence of a fourth layer and.
Versus three previously meaningful the longterm market structure in house on the Canadian while I was in the street and your views as well as implications for regulatory policy and maybe I just wanted to ask you.
You know when I looked at your Internet subs up 8% year on year, but your wireline data revenue was only up two and a half per cent.
It's a big by Virginia, and I'm trying to figure out what's going on because it's surprising since you you know a lot of the <unk> add that you're adding here are on new technology that you know what's costly to implement and.
I'm trying to figure out what's the pricing on new customers versus old customers and I should we see that that that revenue growth in pool in the back half of the year. Thank you.
Okay. Thank you Mark on look.
Look on the first one.
So you have if you take a step back and you look at the industry in our country. We're now have.
Four well capitalized significant players with.
So that is very rare across the global footprint.
And I think if you're sitting there from a public policy position Amy having four players like that is quite significant.
And will enhance competitive competition and consumer value and on the wireless side. Specifically, we are one of the very few countries with four players and probably the only with with the convergence between wireline and wireless.
Just mentioned so we have four wireless players.
I think the job ought to be considered as being having been done now on on the wireless front from a public policy and regulatory perspective.
And we're continuing to deliver value in my in my opening remarks, I I I did.
Take the time to point out how wireless pricing compares to.
<unk> of the Canadian population, I'm, not making bell points here I'm, making an industry point, so increase value improve networks.
Generating growth, we're delivering what consumers want.
U S doesn't have for Australia doesn't have for Germany doesn't have for Finland doesn't have for South Korea doesn't have forward I could go on and on and on as far as the regulatory.
Developments go you asked me about that too like I'll, just say, we're closely watching regulatory developments and we're gonna see how that's going to affect our investment decisions going forward.
For the rest turn it over to Glenn.
Thanks for your question on data.
Let me remind you that consumer Internet is up 10% and obviously data is more than just consumer Internet. It's really a product of legacy data and business service solutions that haven't recovered yet satellite, but let me remind consumer and it up per cent.
10% in total Internet up 8% were extremely pleased with the growth we're seeing in those products.
Okay. Thank you thank.
Thank you.
Thank you.
All following question you some Linda.
T get please go ahead from kind of going to need <unk>.
Good morning, Thanks for taking my question and let me just add my congratulations as well and a tremendous run it at <unk>.
I just wanted to maybe <unk> could I go back to the enterprise side of the business that Bell business.
You know maybe just touch on the backdrop, that's D. F X acquisition, what you announced I think last quarter with respect to Bell benches, you know you walk to the plan to maybe get that back to it's you know in your trolley D. U OS instead of growth is that really a case of sort of.
May be waiting for the I O T side of five G to kind of developed a certain level, where you can see those tailwind how do you see the shape of recovery in that in that business over the next couple of years, just wanted to get a high level sense of that.
You think you are a into so.
Just.
Maybe maybe a couple of sentences on the quarter and then and then looking forward on this strategy. So.
Bears repeating what Glenn centres opening remarks that on the enterprise side with our best quarterly service revenue performance since the third quarter of 2020.
I've been seeing on these calls for.
For the last few quarters that we haven't been seeing cancellation of projects just pauses on on new orders and pauses or on our ability to complete projects given supply chain constraints, we're seeing signs of improvement and supply chains, and we saw that of course and the product sales and Q1 of this year. So all.
Now in terms of the strategy.
Talked a lot over over the last couple of years of of how we are going to focus on Iot private network security cloud in Mac.
And and quickly unpacking those are Iot business continues to be strong.
And that will that will grow over the years private networks.
Yeah, we're seeing we're seeing now the beginnings of some interest in that I would've thought that that would be slower than mirc. For example, but it's turning out that at private networks May may haunt first on Mirc. It still continues to be.
To be we're going to have to be more patient on MC and then that brings us to security and cloud.
We are we are we are quite a meaningful player in the security space and I think that that part we're going to continue to grow and lean into and then on cloud and we announced I.
I guess it was probably 18 months ago. The deal is with AWS and Google Cloud and now you're seeing the the focus we're going to put in the cloud space and the effects and innovations.
Innovations deal shows that we are going to.
Have a focus and cloud, particularly with F X on digital workflow automation, So enterprises, who need assistance professionally managed services as a as a digitize their workflows in their journey stood the cloud we're going to go hunting there and <unk> is very strong in that space.
So.
Basically urban though that's kind of in a nutshell. The the main areas that we're going to go hunting for growth and B B M. And now you are starting to see a sharper focus and some of those areas and of course on the legacy side I'll just complete the full answer on the legacy side of our business or the more traditional side of our enterprise, there's probably a better way to put it.
Although we're you know we're starting to see some improvement there were always very very diligent on the cost structure. We just have to make sure that the underlying cost structure across the entirety of entirety of Belle that supports the enterprise business is in line with the revenue profile.
Of that more traditional business, while while of course, we go we go.
Thing for the growth I mentioned.
That's helpful. Thank you Michael help us like.
Thank you.
Following question you saw on Vince Valentini from P. D. Colin Please go ahead.
Sure. Thanks, very much two quick things one the recent air Canada deal looks very impressive and interesting I'm wondering if you can add any more color on how much impact do you think that could have on your market share of the new immigration market to Canada, and maybe any comment on whether you think you haven't been punching you know to your.
Proper weight in that space in the past few months.
Second on the regulatory front again.
Great Comics Merkle, when I couldn't agree more of that.
The policy objective should be met here on on wireless, but but just to reinforce that even further.
A lot of the pricing studies seem to focus on sort of advertised pricing as opposed to what the industry actually realizes in in our boots and we've seen a move this morning by one of your competitors do just lower the advertised rate to 65 from.
85 for 25 gig plan I'm wondering what your thoughts are on it that I get the phone from a competitive perspective, but also is.
Does it make more sense to have everyday pricing advertised at lower levels should the government sees that as opposed to just discounting off those rates every time, we get those back to school and Black Friday period and ended up at the same that point anyway.
Yeah look on the documents to Merkel.
So on the the our peers announcement. This morning guess it just further supports the point that I made in that.
You agree with it as a competitive industry isn't it and then it will always be ready and it shows the announcements. This morning also shows that.
It really doesn't matter in the marketplace to consumers and it's going to continue to be an important differentiator differentiator and the players with the largest wireline basis in my view will do very well.
And on that we cover 75% of the country with wireline infrastructure increasingly fibered as you know.
On the pricing studies and the pricing discourse.
Let me say this it's like it's sadly unsophisticated the discourse that we have on pricing.
Comparing.
Rack rates on our website, and saying and comparing those two prices around around the world and saying that candidates therefore significantly.
Significantly more expensive stolen sophisticated ignore so many things it ignores really what the consumers actually pain and points in time matter.
If you look at if you look at rack rate pricing in Q1. It tells you nothing about what kind of customers are actually paying because everybody who operates in the industry know that the majority of sales are in the back half of the year Q3, and Q4 back to school Black Friday, the holiday season.
And that's where the promotional intensity actually happens that's one of the majority of sales happen and that's what most because consumers in Canada. Our planes are paying so you gotta you gotta pay attention to typical buying patterns in typical complaint competitive intensity.
Patterns and then you can't pretend that handsets don't cost over a thousand dollars and ignore that either so again the pricing dialogue is unsophisticated, maybe maybe the move this morning by a by a competitor to kind of bring what was otherwise perhaps spill over the line pricing above the line will help that.
Dialogue.
Platform is extremely powerful our family of of of of brands Bell Virgin Lucky as well and putting those two together is I think going to be a very powerful proposition for both companies, but first and foremost for for consumers.
Yeah, I'd like five G growth a lot of <unk> a lot of wireless growth is going to come from his coming and will continue to come from newcomers to Canada and this allows us to speak directly to newcomers before they even enter the country on the airline that most newcomers used to to.
Make the new home in our in our country. So it's going to be powerful for both companies and for consumers.
But nothing on whether you can do better and do you think the company should be doing better in that in that square than it has been murko or are you still does this incremental but you've already been satisfied because we need to do better and this is going to be a big big.
Initiative to make sure we deliver on doing better.
Thank you.
Thank you all following question from Tim Casey from BMO. Please go ahead.
Thanks, Good morning, I'm Merkel could you talk a little bit about.
Oh, you're thinking about wireless and wireline and and bundling given you know you're you're you continue to <unk> the fiber footprint and you know just.
Speeds with five G converge or get closer to wire line, how you're thinking about.
Addressing go to market strategies that may include a more holistic bundle rather than just.
Yeah. So we'll have to we'll have to continue to monitor closely kind of developments in wireless speeds.
And wired line speed and holistic bundles rather than.
Kind of.
Necessarily a discounted price bundle if you buy two services like this it may be where the world evolves I don't think we're there yet but look fundamentally wireless will never catch up to wire line speed certainly not the wireline speeds that we're delivering today and will continue to deliver.
The fiber advantage is profound structural and it's fairly long term and we're going to continue to lean heavily on that advantage to drive continued consumer Internet service revenue growth and these are still healthy revenue you still healthy revenue at 10%.
Quite sizeable.
And look I, if you look at those numbers and unpack them to 47700 fibre Internet net adds up 24%, that's a big number and but you see you see that we are losing continue to lose customers, where we don't have fiber. So the strategy. Therefore speaks for itself and.
And and kind of also shows who doesn't it that kind of our competitors who have cable infrastructure realize that they just can't compete where we have five or so they are going to go hunting, where we don't makes it makes total sense.
But the bigger point is just basically shows you have fiber wins, so we're going to we're going to use the fiber pipe.
And then we have.
Five G or five G networks are leading networks and we're going to continue to push on the areas of wireless growth and we have like I said in my in an earlier response, we have 75% of the country.
Where we have wireline infrastructure, where we can do what I, just said that to my advantage.
Okay question.
Mmm. Thank you. The following question is <unk>. Please go ahead.
Good morning, and thanks for taking my questions to for me first one I think it's fair to say that last quarter, you made sure that investors understood. Your medium term Capex plan now.
Now there's a different messaging from from Ottawa. So is it is it possible that these can a couple of years capex plan might be might be change depending on.
On the outcome of the reviews by Ottawa D. T. P. I a side and second question would be on the cost and the quarter.
Mmm might've been a bit higher than than usual or are you might've expected.
You mentioned, some some tough comps, but there are there are actual cost and the quarter that you want that you anticipate won't be as present them to come in quarters. Thank you.
Okay. So.
I'm Gonna keep.
My my answer to your first question short just so that.
Proper emphasis is placed on it so you asked me.
And decisions from Ottawa affect our accelerated Capex plans and I'm gonna answer very simply yes.
Over to Glenn.
Yeah. There is some cost as I mentioned in my opening remarks in Q1 that we don't see repeating the first one is the amortization of television broadcast hockey schedules that was fairly sizeable in the first quarter and obviously that's normal normalize now labour inflation, we think we're starting to laugh that.
As well as fuel and felt inflation. So we feel that the the the worst is behind us and you'll see that are more normalized cost structure into the future. So we're.
As always I think we've proven time and time again that it's a core competency a b C to take the necessary steps, we need to right size, our cost structure and I can sure where I can assure you were doing that as a matter of fact, you saw it in Burma charge. We took in Q1 as we continued to really push hard on on real estate rationalization and that's an opera.
Unity for US and then the final thing again said in my opening remarks television content. So all in all we were in line with where we thought we'd be in yes, Deron world will have a <unk>.
Better quarter over quarter comps on on costs in the coming three quarters.
Great. Thank you congrats going on the career and that also congrats to Curtis. Thank.
Thank you drill.
Thank you.
I just want to win question you some David bargain from Bank of America. Please go ahead.
Oh, Hi, good morning, Thanks for taking the question, it's not sitting in for Dave and Glen Congratulations on the announcements and best of luck going forward.
Just two quick ones for me by focusing on really the submit ads feel for wireless is there any way to provide some color on the strength coming from consumers versus business business, providing a second line to the workers and so on and with that has legs cause I think on the consumers.
Side with population growth I think everyone sees that as having lakes to continue.
Fairly strong and on the broadband side.
Mostly focusing on like the DSL footprint that you still have.
Yeah. Thank you alluded to higher intensity from cable in those areas, but also I wanted to see if you could provide any color on if you are seeing.
The subsidized builds that the government is focusing on to extend networks. You know further out where the service is generally limited for high speed connections whether that is having an impact with you anticipate that it'll have an impact on subscriber losses and the D. S. L. Crinkling forward. Thanks.
On the second one on we are we are also a significant player in securing subsidies. So actually that allows us to accelerate our our fiber footprint in a way that we otherwise wouldn't wouldn't be able to do commercially in those areas. So I I think it ends up being fairly neutral if you consider the share of subsidy.
We get compared to what others get and in some in some geography's, we actually we actually get more of the subsidy and therefore cover more of a subsidized footprint than our competitors. So I wouldn't say that's going to be a driving factor in this map and then on.
On wireless postpaid acquaintance quite happy with the strength in all the segments, whether or not it's consumer and we talk about him a consumer or enterprise horse mommy.
And like I said in my in in probably all answering the first question, we're really happy with the strength of the Bell mix.
Both gross sales and the mix in the 43000 that ads.
Hi, Hi, preponderance of Bell brand mix on both those sales and that's.
Thank you so much.
Thanks.
[noise]. Thank you.
Following question you some stiff any price from CIBC. Please go ahead.
Good morning, and congrats Glenn.
Thank you.
Just wanted to to circle back on the free cash flow in the corner. Just curious you could get some more color on what side of the working capital changes and it keeps you in any change it to bad debts and how we just kind of think about that working capital of Arsenal turned a year.
Yeah first.
Bad that's no change, we're not seeing any increase in.
Days sales outstanding or anything like that fingers crossed that that will continue through the through the calendar year like if you look at free cash call [laughter].
Fourth quarter was one of the highest spending capital quarters in the history of B C E.
Obviously, the payables of that work would would have been recorded in Q1.
Secondly.
If you look at where we are for capital spending in Q1, we are actually up over 100, I think $127 million if memory serves correct year over year in Q1.
Which.
When you consider that for the full year, we've given guidance that will be $300 million under what what really happened in the quarters, you may K with the Sunshine and the weather allowed us to get out and do fiber construction earlier than we envisioned and plant in the earlier you build it the more customers. We can load. So we've done that but of course that affects working capital and then we had.
Some timing of tax installments I was completely planning on but they can be lumpy from year to year and we've encouraged them early this year. So Stephanie that's the kind of on the parking a y.
The consensus on free cash flow versus what we deliver it is so different yet I remain so confident in the delivery of the annual free casual guidance.
That type of color. Thank you and then just one more from me curious on the integration of <unk>. What do you have migrated decides to be Fi network, where that's possible and how we should kind of think about the potential for margin improvement from that second.
Strategic strategically Ah you know in terms of distribute tell in the box, where we have where we have fiber network and and Ah distributed subscriber is currently on.
The cable platform, we will migrate them over over over to fiber over time.
And and note here distribute Hell is a brand of Bell, Canada. So there is no separate legal entity distribute tell any longer it's part of Bell, Canada and it remains a brand. So we're gonna move distributed horrendous bill subscribers to bell fiber footprint, where we can overtime.
Thanks, so much.
Thank you.
Question It sounds the best piano Petty some J P. Morgan.
Please go ahead.
Hi, Thank you for taking the question just wanted to see if you can update us on the competitive environment and your wireless and wireline yeah. Thus far in the second quarter, obviously, it talked about it a little bit more of a I think normalization and once you <unk> what are you seeing thus far and then secondly <unk>.
Looking across you, perhaps maybe sports asset holdings.
You know, obviously headlines about the Ottawa Senators, perhaps setting a record for any gel you know sale.
Yep that is no leverage is maybe a major concern or you know access to the capital markets.
How are you evaluating perhaps monetization or you know the longterm strategic value of some of your sports holdings. Thank.
Good morning, Sebastian it's Glenn on their second question America will handle the first one the sports assets. We are very comfortable with the assets. We have we feel that the value. They deliver continues and we have no intention of doing anything with the sports assets in the near term.
Yeah and on and.
And on the early.
On the early signs for four Q2, I would say generally in line with what we what we saw in Q1, where you typically use you know.
A typical seasonal slowdown compared to Q4 of last year.
Generally speaking I think at the bank flanker brand level, you'll see higher competitive intensity generally, but nothing out of the ordinary or nothing that we didn't expect.
And like is always we'd have to carefully watch to see how the dynamics going to evolve we're gonna have to assess this morning's announcements by by one of our competitors and.
And watching these kinds of things is definitely top of mind and everything we do and but bottom line is that there is a lot of growth in the wireless industry still logical and for all industry participants whether or not it's immigration newcomers to Canada, which we've talked about our people moving from from LTE to five G or greater store traffic.
A return of business activity et cetera, et cetera, So I think that that that growth with will float all boats and we're ready to compete.
<unk> great Yeah, as we're approaching the nine a M and time this will be our last question, though.
Perfect. Thank you so I would like to turn the meeting back over to you.
Right. So thank you all for your participation. This morning as per usual I will be available along with Richard to answer any questions and clarification that.
You may have as a result of our announcements this morning.
That thank you very much and have a great day.
Thank you everyone. Thank you.
Thank you [noise].
The conference has now ended please disconnect your lines at this time and we thank you for your participation.