Q4 2023 Quebecor Inc Earnings Call
Welcome to Videotron teleconferencing.
Well the service off off date, EPP, she's like Oh for service in English press too.
For myself is off I'll say geez.
You joined the conference entry your access code followed by the number sign.
The conference is now being recorded.
Attempt to slow it down.
As expected.
Fuel wireless ARPA decreased by $1.72.
37% and 44, mainly attributable to the dilutive impact of freedom prepaid services is.
There is lower our food as well as the overall competitive intensity I described earlier.
I Should've mentioned that.
Contrary to our.
Hi. This is the operator may have your first name please.
Hi, your phone maybe on mute.
We remain aggressive.
So that more and more Canadians can enjoy our great mobile services and benefit from our efficient and customer oriented approach.
Sorry to interrupt this is the conference operator may I have your name please.
And then you went on lung.
Q4 'twenty three.
Versus Q4 'twenty two.
We said, we had a plan to reduce churn and again we deliver.
Posting the best churn performance in the industry.
Excluding Friedman our churn rate.
Jane sorry, without improved by 10 basis points.
Compared to the same quarter in 'twenty two.
<unk> the strong performance of our two brands foods had to do at home and the Quebec Mark.
Wireless revenues increased by 84% during the year to 2 billion or five and wireless EBITDA reached 833 million up 65%.
Of course due to the addition of freedom mobile revenues as well as increases in service revenues and equipment sales.
On the wireline front, we continued to generate revenue growth.
And more importantly manage to increase our cable revenues and gross margin as compared to last year.
In the face of particularly our style retaliation measures taking by our longtime competitor.
<unk> Internet and bundled packages at an all time low price that are 40% below the prices for the same package outside of Quebec.
How long will they remain well they maintain.
This almost shameful disparity between their own customers.
I will not venture an answer as these repeated behaviors.
To be how they choose to operate but I can tell.
I wondered why Dell installed is so terrifying.
The new CRD CF TTP rates of approximately 70.
$70 excluding consumption.
When they are offering the same service at.
At a much lower monthly rate.
More than $30 lower in some cases.
So despite this fierce environment.
Our broadband services customer base.
Increased by 6000 net adds in the fourth quarter of 'twenty three.
For a year over year growth of 25000.
We continue to be very disciplined in our pricing strategy and this translate into a remarkable internet argue improvement of 57 cents in 'twenty three.
We will continue to focus on pricing optimization and strategic positioning of our brands.
Reserve margin.
To overcome the dilutive effect of <unk>.
And lower planned mix and to maintain our profitable growth trajectory.
While our competition only talks about speed or the illusion of speed I should say.
It was long reputation for the quality of the customer experience is questionable.
Through 'twenty Dream, you go to overseas that roll distinction of that front too many to go through them, all but I lighting. The recently Z Huawei Index survey in 'twenty four whereas those offered the best in store experience in Quebec.
In addition, certain C is placed first for online experience in Canada telecommunication industry for the fifth year in a row. According to the same Lizzie surgery.
These.
<unk> Bancshares attests to redo it all unique and privileged relationship with our market and our clients.
As we continue to grow and expand across Canada.
We are committed to raising the bar in bringing the things stellar standards of service.
Performance and experienced all Canadian.
Turning now to our media segment.
Our 23 resolves.
Were severely impacted by.
By a very difficult advertising market.
That shows no sign of improving anytime soon.
A significant decline in studio business through the actors and writers strike in the U S.
And aesthetic regulatory environment that continues to put us at a disadvantage at a disadvantage in our fight against the web Giants and the national broadcaster.
<unk> experienced decrease of $49 million in revenues and $25 million in EBITDA for the year as compared to 22, leading to a negative EBITDA of $5 million.
As you know.
Audio visual that media landscape throughout the western World is undergoing profound and unprecedented changes as a result of the globalization of television viewing.
Driven by the proliferation of on demand digital broadcasting platforms.
And the tectonic shifts in advertising spending to the web Giants.
These are no short term changes.
For the long term trend that is reshaping.
Broadcasting ecosystem.
And forced us to take unprecedented unprecedented actions to rethink how we will operate a remedial activities in this new reality.
India has historically been a beacon for Quebec culture language and news.
We have a duty to preserve it and ensure its sustainability.
The difficult yet necessary measures, we announced last year.
Are changing the way we do business.
To withstand the market pressures and to face the competition.
We are refocusing our activities.
Reducing our operating costs and concentrate on this trend that set us apart and make it a big favorite TV network.
We will continue to invest.
In the original Quebec got them and to bring all Quebec or as reliable coverage of news and major sporting events.
As a matter of fact.
The positive impact of our continuing significant investment.
Our clear when group did a guy increasing is viewing market share by point too.
In doing market share to reach 41%.
At December 31, sorry.
Double that of our competitors.
As we adapt to the new market realities.
We remain the undisputed reference for news and entertainment and Quebec.
Finally, our sports and Entertainment Division maintained its momentum with revenues and EBITDA of 213 and $23 million respectively for the year.
Major shows at <unk> Town Center include Kiss, Ciena, Duane and shows how two where great successes in the last quarter.
Before turning to you.
For the financial review I.
I would like to point out our continued balance sheet discipline.
As demonstrated by our ability to repay more than 400 million of net debt and Britain, bringing our net debt to EBITDA leverage ratio down from three six to $3 four and just nine short months since the acquisition of <unk>.
Freedom mobile.
Our clear intent.
Is to continue.
To delever over the next months.
Get our investment grade rating and to sustain our leverage ratio in the low three times area.
Turning to our incumbent competitors, who continue to eat and joy.
Status and operate with a leverage ratio at least three times higher.
Sorry.
Three times higher than our than ours with no tangible signs of improvement.
I will now let.
You review, our detailed financial results.
Yes, the checkout.
On a consolidated basis in the fourth quarter of 2023, Quebec quarter reported revenues of $1 5 billion.
Up 27% and.
And EBITDA of $565 million up 17% and adjusted cash flows from operations of $396 million up 10% from the same period last year.
Our telecom segment generated $399 million and adjusted cash flows.
And then an 11% increase compared to the same quarter last year EBITDA also increased 17% to $559 million.
Revenues reached $1 3 billion or 35% increase compared to the same quarter last year. In addition to freedom mobile which accounts for most of the increase our videotron and <unk> brands continued to deliver growth in both wireless and Internet service revenues.
Telecom Capex spending excluding the acquisition of spectrum licenses was up $45 million in the quarter and $80 million for the full year as compared to the same periods. In 2022. This variance is essentially due to the integration of freedom mobile as we remained on guidance for 2023.
For key initiatives, such as LTE advanced and <unk> network extensions and geographic expansion in all markets.
For 2024, we will remain disciplined and strategically continue to invest on five G technology, new revenue growth opportunities in targeted areas and maximizing return on our investments maintaining our competitiveness and staying committed to our strategies.
Our media segment recorded revenues of $205 million, a 5% decrease in EBITDA of $14 million, an 8% decrease compared to the same quarter last year.
Our sports and Entertainment segment revenues grew 4% to $56 million.
And EBITDA was down one 5% to $2 million in the quarter.
Rebecca <unk> reported a net income attributable to shareholders of $146 million in the quarter or <unk> 63 per share compared to a net income of $143 million or.
Or <unk> 62 per share in the same quarter last year.
Adjusted income from continuing operations, excluding unusual items or gains or losses on valuation of financial instruments.
Came in at $168 million.
Or <unk> 73 per share compared to an adjusted income of $159 million or <unk> 69 per share in the same quarter last year.
For the full year <unk> revenues were up 20% to $5 4 billion and EBITDA was up 16% to $2 2 billion.
<unk> annual revenues from our Telecom segment reached $4 7 billion reps.
Representing a 25% increase.
While EBITDA grew 17% to $2 2 billion in the same period, an improvement of $317 million over last year.
EBITDA margin stood at 48% and on the Opex side the increase of 29%. This year is due to the consolidation of course of freedom mobile as the cost containment initiatives on videotron and fifth continuing to de lever.
Telecom segments finished the year in record figures with $1 7 billion and adjusted cash flows from operations and a 16% increase compared to last year and EBITDA margin stood at 48%.
Yes.
As of the end of the quarter, Quebec, or inks net to EBITDA ratio net debt rather to EBITDA ratio remained stable at 339 still one of the lowest of all of our competitors and telecom competitors and peers.
In the nine months since the closing of the freedom mobile acquisition, we repaid more than $400 million and net debt and already brought down our leverage ratio from three six to less than $3 four as Scott mentioned earlier.
We intend to continue to Delever as we've said to get our investment grade rating and continue to operate in the low threes.
Available liquidity of more than $1 $9 billion at the end of the fourth quarter and our growing free cash flows will allow us to continue to improve our already very strong balance sheet.
In 2023, we purchased and canceled 260000.
500 class B shares for a total investment of $7 8 million.
Finally in light of these results and following our plan to gradually increase dividends to represent between 30% and 50% of our net free cash flows.
I'm happy to report that Quebec, <unk> Board of directors declared yesterday, a dividend a quarterly dividend of <unk> 32, five cents per share in both class a and class b shares up from 30.
And he is representing a reasonable 28% payout going forward.
We thank you for your attention and we'll now open the lines for your questions.
Alright, the first so just to remind everyone to ask a question star one.
The first question comes from Maher Yaghi from Scotiabank. Please go ahead.
Hi, yes, thank you Marshall.
They came in and AK steel.
I will not ask you to discuss your views on the new fixed wireless relaunch, but Rogers announced this morning, but probably not the best place to discuss this publicly but I will ask you on your own investments in wireless network deployment can you discuss.
What's your priorities are in 2024 in terms of wireless network deployments, specifically on three five gigahertz spectrum and can you share with us any views on your Capex budget that you expect to spend in 2020 for either for wireless or for the company on it.
Consolidated basis.
And also as a follow up.
We're seeing more intense pressure competitive pressure you mentioned that in your prepared remarks across Canada affecting margins for <unk>.
All the players how should we think about margins for could be core Ah in 2024 as you continue to focus on gaining market share outside Quebec. Thank you.
Thank you.
A lot of questions. This morning.
So I guess that there were three questions I will try to find out.
Okay.
While the first one.
I guess that youre not going to be surprised you know that I will tell you that we do not plan to talk too much of our.
<unk> strategy.
We can say, obviously and this is a relation that what we've been doing and what we said also in.
Our speech that we will continue to do so we will continue.
To make sure that we're offering.
That service and the best products to our our footprint, we certainly hail with Baidu.
By the fact that the envy of no regulation is now up to speed, obviously again.
We would not be surprised to see a blockage any source of things that you are incumbent incumbents will put in front of US we have been used to it and we've been used to continue to fight and at the end of today, you know, making sure that our plan will succeed.
So basically this is the overall strategy I would be able to tell you. Other also may be deal and this is something else that we addressed and this is something we look forward to put forward as we have been seeing ppas in the province of Quebec, you know.
Speaker Change: I lead.
Speaker Change: But then during the last years.
Speaker Change: This situation changed dramatically.
Speaker Change: After the acquisition of most of the GPI to buy either a bell.
Speaker Change: Small and does it go but this is not the same thing that we're seeing elsewhere, and we look forward and to be able to propose.
Speaker Change: <unk> a wireless operator also services on the on our bundling purpose.
Speaker Change: So we look forward to implement those who offer and to improve our proposals to the Canadian market in the very near future.
Speaker Change: On the on the Capex side.
Speaker Change: I think that we should not expect major changes I think that what we said and we will repeat to say it is we consider ourselves discipline.
Speaker Change: We will continue to do so.
Speaker Change: It's not something that we consider a saving and we're always considering capex you know.
Speaker Change: And importantly to continue to grow.
Speaker Change: But also in the meantime, we make sure that what we spend is properly span and expand for the purpose of servicing our customers better and one of them.
Speaker Change: On the on the margin I will I will let the U S.
Speaker Change: The explanation.
Speaker Change: On on margin.
Speaker Change: We've.
Speaker Change: We we've said and we said this even before that.
Speaker Change: The acquisition of the.
Speaker Change: Acquisition of freedom.
Speaker Change: That we were expecting our view.
Speaker Change: To come down.
Speaker Change: It's not.
Speaker Change: Not only were expecting what are we expecting it but we're you know we're at the heart of it you know and.
Speaker Change: It is a more competitive market is what we got into with our eyes fully open and we expected that and in order to be able to continue to grow margin. We always said that we had an advantage that.
Speaker Change: That very few of our competitors have as our long standing.
Speaker Change: Cost culture I'll call it.
Speaker Change: I think you will agree that compared to any of our competitors.
Speaker Change: Has been over the years and this is not recent you know we have been very very.
Speaker Change: Disciplined I'd, even say tight operators.
Speaker Change: On the cost front, and and <unk> and we certainly intend to continue and use that advantage to make sure that we can continue to grow margin.
Speaker Change: And in an environment of.
Speaker Change: Pressure on the topline.
Speaker Change: More specifically in our don't forget as well that there are opportunities and.
Speaker Change: And synergies that are still haven't been fully.
Speaker Change: <unk> that are in our results from.
Speaker Change: From the Freedom acquisition, obviously, as we are continuing to to integrate and to develop the business.
Speaker Change: And to invest in it and to really change.
And continue to improve the culture.
Speaker Change: To our high standards.
Speaker Change: Our cost management that I that I just talked about so you know margin.
Speaker Change: Is it is it is is where we believe that we are positioned very very well compared to our competitors.
Speaker Change: But you know I think we have to be we have to be recognition of the fact that the you know the the revenue market than the will remain will remain competitive and we certainly intend to remain competitive but.
Speaker Change: But we think we can continue to perform better than anybody else in that in that type of environment.
Speaker Change: Thank you.
Speaker Change: Alright, well my next question.
Speaker Change: Yep.
Muslim Debris: Next question comes from Muslim debris from Vishal, Sir Please go ahead.
We are also very much centered upon me Castillo.
Muslim Debris: First question for me is is on the comment you.
Maher Yaghi: You made at the end of the prepared remarks.
Maher Yaghi: You've been saying you said that pro.
Vishal: Pro forma the dividend increase that gives you a.
Maher Yaghi: The dividend payout the approximately 28%.
Maher Yaghi: Just running the quick math here. It gives me a free cash flow.
Maher Yaghi: So in our guidance.
Maher Yaghi: $1 billion and $70 million for next year that would be higher than what we expected can you take from that.
Speaker Change: Yeah. I mean this is this is this is what we're expecting in a non cash flow I think you will agree with me she along that we've been delivering the goods and.
Speaker Change: Again this is not recent and even even since the acquisition of <unk> and even more so since the acquisition of freedom.
Speaker Change: While continuing to invest.
Speaker Change: And with with.
Speaker Change: With some as we see in Q4 with some impact on EBITDA through increased advertising and and and branding and investments in our retail network and our call centers and all of that and in a very competitive fourth quarter as it's historically always been.
Speaker Change: You know, we managed to generate a.
Speaker Change: Significant cash flow and to repay $400 million of debt in nine months alone.
Speaker Change: So we.
Speaker Change: We believed based on my comments on margin for example, in our discipline going forward and Capex that <unk> talked about where we see a moderate increase for next year based on that but very more and more of sort of that.
Speaker Change: Stability leaning towards a moderate increase next year.
Speaker Change: You know that we will generate that we will continue to generate these these very impressive cash flows that will.
Speaker Change: That will lead us to.
Speaker Change: Our two investment grade and two to continue to Delever. So.
Speaker Change: Comfortable certainly with the number that we've that we've provided.
Speaker Change: Great.
Speaker Change: Go ahead.
Speaker Change: Obviously, theres a lot of measures.
Speaker Change: Uh huh.
Speaker Change: Through highlights whatever it's EBIT dollar revenues are Pooh turn them I would say that you know one we could consider the most important for us is our capacity to generate cash and so what kind of cash are you generating to be able to bring the bay your interest.
Speaker Change: To pay your income taxes debate your capital expenditures and at the end of the day brain at the bank to reduce your debt and your debt leverage that will give you the possibility to improve the relationship of the return that you.
Speaker Change: You're offering to your shareholders.
Speaker Change: Or obviously, you know alpha and your balance sheet to make sure that it will be in a good position for capitalizing any sorts of opportunities that may become.
Speaker Change: So when we're looking at our numbers, we see in some of our competitors that are basically paying 100% of their free cash flow and dividends and at the end of the day instead of seeing their death being reduced.
Speaker Change: <unk>, increasing and their ratio also so I guess that this is certainly not the way that we would like to proceed and we will continue to have a balance between the different elements that where we need to serve.
Speaker Change: At the end of the day dividends interest.
Speaker Change: And capital expenditures to make sure that our again.
Speaker Change: Form that will building.
Speaker Change: And service our customers the best way at the lowest prices the maintain the margin as ire as possible.
Speaker Change: And then if I could just squeeze a second one in here just trying to triangulate these comments.
Speaker Change: The margins, where we're seeing in the quarter.
Speaker Change: If you can just maybe try to explain the seasonality of the freedom business.
Speaker Change: Maybe in the quarter or Q4 profitability accretive versus what it would be in another quarters. Please. Thank you.
Speaker Change: Yeah.
Speaker Change: Yeah, Yeah as I mentioned in my comments when I ask you at all.
Speaker Change: Q4, It can't you can't just use especially since it's a recent acquisition that you can't just use.
Speaker Change: And I guess your type thing as you're talking to me right now.
Hi.
Speaker Change: One elders.
Speaker Change: Oh someone elses, well if someone else could go on mute because itself.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: My point is you can't just you know use Q3 for example, because I think we'll all agree that Q2, which was our first quarter with freedom.
Speaker Change: Non representative you know we were just.
Speaker Change: Getting our hands on the business end.
Speaker Change: And we didn't.
Speaker Change: We didn't make any particular waves.
Speaker Change: Certainly you can't use Q3.
Speaker Change: You know as as a proxy for Q4, where you know Black Friday is now of course as you all know not only a day, but it's almost a month and then which Morris very quickly enter into Christmas and boxing week.
Speaker Change: And it's exciting and it's that time of its a highly it's the highest.
Speaker Change: Promotional.
Speaker Change: Time of the year and when you are the price leader like like like Freedom. You know it is obviously a time of year, where you lose your pricing advantage and you know and we've been you know and we've been I.
Speaker Change: I think I think quite transparent about this that that we feel as we are continuing to invest in the business growing.
Speaker Change: You know improving our network improving our customer service.
Speaker Change: Being more creative in terms of packages and what we offer our clientele.
Speaker Change: That we need to continue to offer a price advantage to be able to continue to gain market share and you know in Q4 quite frankly it is less it is less possible for us as is all of our competitors becoming.
Speaker Change: Extremely.
Speaker Change: Promotional and we lose that that's a little bit of an advantage. So it's been historically, even at videotron as we were growing in all you'll remember that it was historically a time of year, where we didn't do all that well and net ads.
Speaker Change: And that's why and I'll just make a comment on net assets, where as we're going through.
Speaker Change: You know when I think 66000 in the quarter is it's actually very good when you compare.
Speaker Change: Our base to some of our competitors and when you compare what we did 14 last year.
Speaker Change: It was three it was pre a freedom of course, but I don't remember that freedom did all that well either.
Speaker Change: In Q4 of last year. So anyway, all of this is where where I'm going with this is that Q4 is the time of year, where you lose that that a little bit of advantage. So you have to invest more you have to invest more in advertising, which we did in branding.
Speaker Change: What's more operational costs that are associated.
Speaker Change: With that and lastly, but perhaps more importantly.
Speaker Change: The handset subsidies.
Speaker Change: The time of year, where a lot of handsets as you know.
Speaker Change: It leaves the leave the stores.
Speaker Change: And we take a one time hit that is higher than you know then.
Speaker Change: Unusual and certainly when we compare our negative equipment margin in the quarter and especially at freedom.
Speaker Change: Because a lot of our handsets came out there.
Speaker Change: You know we have more of a you know we have more of a negative margin in the quarter. So, but that's you know, but that's it it's nothing unexpected.
Speaker Change: Expected and its seasonal and it's you know it's.
Speaker Change: The accounting wise its a one time hit.
Speaker Change: So I think all in all I think it's the margin that the that the performance both in EBITDA and in net adds in the in the quarter. If I may say, so I think we managed to reach that equilibrium that you know that we were seeking in terms of continuing to gain market share any any any crazily.
Speaker Change: Promotional time.
Speaker Change: While maintaining a while.
Speaker Change: Trying to minimize the impact on margin and.
Speaker Change: And continue to grow.
Speaker Change: These would be my comments.
And finally as you all anything else.
Speaker Change: So maybe we can go through the next question.
Operator: Operator of course of course, our next question comes from Vince Valentini from TD are please go ahead Vince.
Speaker Change: Thanks very much.
Vince Valentini: I apologize if you've kind of answered some of these things but.
Vince Valentini: Q you normally give us telecom segment capex guidance or budget for the upcoming year have you given that number.
Speaker Change: No I have not given that number.
Vince Valentini: I kind of mentioned like a site that I think we believe that I believe we had finished the year at 536 or five in just slightly under 540. So.
Speaker Change: A slight increase on this we're probably looking at the 600 area.
Speaker Change: For for 2024.
Speaker Change: Yes.
Speaker Change: So you can increase your capex slightly.
Speaker Change: And still get to somewhere.
Speaker Change: Close to one point or <unk> 7 billion in free cash flow I'm, just trying to reconcile that ethanol.
Speaker Change: That would make it seem like theirs.
Speaker Change: Very little spent on wireless handset subsidies.
Speaker Change: Or restructuring costs or working capital or any of those other.
Speaker Change: Forget about EBITDA, we can predict that on their own but all those other items below EBITDA. You you have no concerns about any of those line items that would hold you back from getting above $1 billion.
Speaker Change: Well I don't I.
Speaker Change: I don't know if I'd go as far as saying I have no concerns I mean, we're in.
Speaker Change: We're in a tough market as you know and but I I would put it differently I would say that I believe in our ability to generate.
Speaker Change: This free cash flow I think we.
Speaker Change: In the past.
Speaker Change: We've been in this situation before Vince as I'm sure you remember and we've been able to deliver and.
Speaker Change: I am confident that you know that we will you know that the $1 billion number and free cash flow is not is not this is as far from being unreachable.
Speaker Change: Excellent.
Speaker Change:
Speaker Change: If I can.
Speaker Change: Tried to drill down on something else related to margins and costs in the fourth quarter.
Speaker Change: Your answers seems to imply Moshe.
Speaker Change: The bit of the.
Speaker Change: Deceleration in wireless EBITDA growth that we saw was just seasonal marketing costs and enhance its subsidies and all of that which I think is.
Speaker Change: Quite justified.
Speaker Change: As you would understand is there any impact from from roaming fees. I mean, you offer free roaming in the U S and Mexico and now 81 other countries as it is this not becoming a material line item in your Opex as well.
Speaker Change: Well, it's I mean, it's there for sure as we offer.
Speaker Change: Roaming packages that are obviously a lot more generous than they were in the past that yes. There is some loss of that revenue. So it's not it's not huge but it definitely is there yes, okay. Good.
Speaker Change: Yes. It is.
Speaker Change: One of the things that I.
Speaker Change: I could have.
Speaker Change: I could have talked about but you don't want the reverse side of.
Speaker Change: What we did though is that we.
Speaker Change: It certainly gave us.
Speaker Change: Some some significant momentum in gaining customers so.
Speaker Change: And it was a bit of a different twist as I'm sure you'll agree.
Speaker Change: He can play on price, but you need to find other leavers than that but that was a pretty good one which ran it resonated with customers. So yeah, I mean, a little bit of giving up a little bit of revenue but.
Speaker Change: We.
Speaker Change: We still think it was a good.
Speaker Change: It was.
Speaker Change: It was a good decision.
Speaker Change: Yeah and also another point don't forget that international roaming charges are much lower than the Canadian ones right. So we've talked about this before so so less of an impact on that front.
Speaker Change: Last thing then.
Speaker Change: Somewhat related to that.
Speaker Change: Your networks improved you're giving away. These these extra parks like roaming.
Speaker Change: Are you satisfied maybe theres more for pure Karl are you satisfied with $36 <unk>.
Speaker Change: <unk> and you said in your opening remarks, you expect to remain aggressive I mean, we obviously you don't normally see carriers keep their black Friday.
Speaker Change: <unk> continuous rate base.
Speaker Change: At the end of February where we're at now.
Speaker Change: Do you is this just some sort of temporary plan to get sales momentum going or do you think this is the right level to.
Speaker Change: $29 offers out there and in your ARPA with 36 are you are you happy with that or is this temporary in your view.
Speaker Change: Sure.
Speaker Change: We need to put this in perspective first of all you know when we arrive at.
Speaker Change: Freedom I guess.
Speaker Change: Uh huh.
Speaker Change: They were kind of a lift both situations with perhaps a year and a half.
And I'm not sure I'm completely also what was the mindset.
Sure was considering for this business.
Speaker Change: So we arrived.
Speaker Change: And.
Speaker Change: Sure we can consider being a very good transaction in terms of <unk>.
Speaker Change: EBIT Doyle.
Speaker Change: Homeless man.
Speaker Change: Yes.
Speaker Change: Then starting operating it.
Speaker Change: For whatever reason the investment.
Speaker Change: We're pretty sure.
Speaker Change: Because of the environment, where they were coming from.
Speaker Change: It was a priority for us.
Speaker Change: To try to implement if you will.
Speaker Change: Continue to do so because it is a reason of our success in Quebec.
Speaker Change: We implemented a culture that will bring customers firms.
Speaker Change: And this is why we went forward with the <unk> deployment.
Speaker Change: With price freeze.
Speaker Change: In recognition of the support of our customers.
Speaker Change: To continue in this direction and I would like to focus and this is what this is.
Speaker Change: Moving targets.
Speaker Change: And we cannot fix this our boot forever and the moving target will be our capacity to deliver multi <unk>.
Speaker Change: Services vehicle to offer more aggressive bundles and <unk>.
Speaker Change: Terms and what will be the response.
Speaker Change: The competition in the territories, we are servicing.
Speaker Change: Therefore, which also as we mentioned you know we just started.
Speaker Change: The business of service.
Speaker Change: And would it be.
Speaker Change: Larger in Manitoba.
Speaker Change: That will bring.
Speaker Change: Additional services and we cannot.
Speaker Change: So they anticipate what will be the reaction of our competitors.
Speaker Change: Well the reaction would be the same as what we've been seeing in Quebec. I mentioned. This you know where were seeing prices and bundles that we've never seen before and where the difference is a very very important but we are able to continue despite this strong pressure.
Speaker Change: To service, our customer because our customer service.
Speaker Change: <unk> experience and expertise which is ideally.
Speaker Change: I really appreciated by our customers and.
Speaker Change: And we look forward in the bundle proposal that we're going to offer and make a difference.
Speaker Change: So the situation that we're living here we'll.
Speaker Change: Certainly you know the exported growth on growth in the different markets that we have depth of service in the very near future. So then therefore, you know is there are.
Speaker Change: For wireless makes sense make strictly sands.
Speaker Change: I would say.
Speaker Change: Less and less in the future.
Speaker Change: Fair enough. Thank you.
Speaker Change: Thank you Vince.
Speaker Change: Another question.
Yes next question comes from Stephanie price from CIBC. Please go.
Stephanie Price: Go ahead.
Stephanie Price: Good morning, Stephanie.
Stephanie Price: Just a follow up to Vince's question, just curious if you could talk a little bit about the timeline to bundled internet offers for the freedom brands.
Stephanie Price: Like Kudo and Virgin are offering internet bundles, but that's part of it stopped the com Internet offer just curious if you see a strong demand for internet bundling within the flankers.
Stephanie Price: Well you know first of all I think that you know we are in a good position technologically in order to do so with the acquisition of the media we already have the experience of a tpa.
Stephanie Price: We need to make sure that the stock joining with the freedom will be accomplished certainly also look I think that we should highlight the technology that we.
Stephanie Price: We need you brought in the table and this is one of the reason why we thought it will be a good idea to acquire it.
Stephanie Price: Dolby vision.
Stephanie Price: <unk> are bringing to the company so putting all of this I guess that's on the technology on the technology front, we have what is appropriate to move forward.
Speaker Change: Got it.
Speaker Change: The part of the equation that we don't control and we highlighted it.
Speaker Change: Is that kind of blockage that we will see and we were met.
Speaker Change: With the.
Speaker Change: In the network operators.
Speaker Change: We are forced to connect to.
Speaker Change: We expect this will go.
Speaker Change: Fluidly I don't know if I can use that word.
Speaker Change: You know what I mean unfortunately.
Speaker Change: In the past this is not something that we experience.
Speaker Change: For example, when we designed it to be a PPI a on the bell monopoly footprint and that it's D. We were forced to go to in front of the CRT see many times four at the end of the debate.
Speaker Change: <unk> be in a position to offer our service, but we lost.
Speaker Change: Between nine and 12 months today.
Speaker Change: And I guess that this is certainly not a good thing to do for Bell.
Speaker Change: We took a significant portion of their marketplace. So much that we are now intending or we are in the process to build the network or to overbuild.
Speaker Change: Cablevision platform, which is the dental platform and that needs to be so therefore, obviously.
Speaker Change: Growing from a PPI a through a network operator.
Speaker Change: We look forward to keep this in mind, we are a facility base.
Speaker Change: Company that had been built like this even.
Speaker Change: In the old times that they're showing you all and we intend to remain the same and this is why you know when we started in 2006 and Diego operator, we participated in.
Speaker Change: All of the representation to make sure that we will get access to spectrum. We built the rig currently the platform. The convinced I said, which was that I said at that time was only industry to make a spectrum reservation for new entrants.
Speaker Change: We were we win that game then today you know from no wireless operator.
Speaker Change: We are other than other than.
Speaker Change: Then our friends and Maritimes the only <unk>.
Speaker Change: Operator and wireless.
Speaker Change: For which also with.
Speaker Change: I would say favorable regulation that we will be able to offer a bundled obviously, we experienced significant success in Quebec offering bundles and we look forward to do the same and again that means that do not mean that we should not be able also to operate as a standalone wireless.
Speaker Change: Operator.
Speaker Change: As we've been doing it.
Speaker Change: It's not completely true because we also offer internet, but as we've been doing it for the last four years with our fifth brand.
Speaker Change: And for which we thing and we should say that we were quite successful.
Speaker Change: And this is something that we look forward to replicate in the other areas. So in a nutshell for for your to answer. Your question is we're ready to go and what we're seeing is opposition from the incumbent to be able to connect to the network.
Speaker Change: Okay. Thanks for the color and maybe just one more from me you mentioned is there just curious what you're seeing in terms of this is beta program in English Canada has the rollout been as it's expected to been any response from competitors and how do you think about any cannibalization with the freedom.
Speaker Change: Well you know this is always a quote unquote, you know a little bit of kind of kind of AR and utilization.
Speaker Change: But at the end of the day you know the question is it would you.
Speaker Change: Prefer to get to your customers.
Speaker Change: <unk>.
Speaker Change: Luiz.
Speaker Change: Last two are your competitor are keeping them.
Speaker Change: I would say that you know.
Is what we experienced in Quebec was not it was.
Speaker Change: Certainly you know offering a service to it.
Speaker Change: But get the kyat do you know that.
Speaker Change: Digital savvy people younger people that would be.
Speaker Change: That would prefer to be.
Speaker Change: Service by digital environment that no call center, adding probably a lower price, but on our side of the equation.
Speaker Change: On the lower price or the lower margin.
Speaker Change: Is compensated by lower cost.
Speaker Change: So at the end of the day, you know it bring us in terms of free cash flow.
Speaker Change: Very interesting.
Speaker Change: Inputs. So again, we cannot expect completely anticipate what's going to take place, but we see certain areas.
Speaker Change: Or are we more open to this kind of service.
Speaker Change: Two what we can call traditional.
Speaker Change: Services that does that mean that.
Speaker Change: We will not continue to offer.
Speaker Change: Self install that will help our cost base and this is something that we've been doing.
Speaker Change: In Quebec, and we look forward also to implement this in a in a more traditional.
Speaker Change: Wayne.
Speaker Change: Thanks for the color.
Speaker Change: Thank you Stephanie.
Speaker Change: Gordon.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Next question comes from Matthew Griffiths from Bank of America. Please go ahead.
Matthew Griffiths: Oh, Hi, good morning, and thanks for taking the question if I could I just wanted to maybe circle back for a moment to the Capex question and if you could give any color on like the split between.
Matthew Griffiths: Maybe you know your cable investments in the coming year and wireless.
Matthew Griffiths: Clearly I'm thinking about the comments per call made about rolling out.
Matthew Griffiths: Wireless to new market.
Matthew Griffiths: And if there was any context you could provide around those rollouts, obviously, you don't want to name them, but.
Matthew Griffiths: If you could.
Matthew Griffiths: How material.
Matthew Griffiths: In addition to your addressable market are these rollouts are they relatively small which would be in line with no change in capex guidance.
Matthew Griffiths: Or.
Matthew Griffiths: Perhaps they're larger than I might be thinking that would be helpful. Thank you.
Matthew Griffiths: Okay.
Speaker Change: Thanks, Matt for the question on the on the Rollouts I mean, they know that the Rollouts are significant rollouts are significant through R&D and O agreements.
Speaker Change: Which gives us a good lever on Capex as you know so.
Speaker Change: I think we have to be just a.
Speaker Change: Just a little bit.
Speaker Change: Make sure we.
Speaker Change: Yeah.
Speaker Change: Very.
Speaker Change: Very large improvement through MD I know it doesn't necessarily translate short term and to a much higher a much higher capex increase.
Speaker Change: So I think we're in the right position to increase our coverage area significantly and you know in Ontario.
Speaker Change: And Ontario, and Alberta and BC.
Speaker Change: Without.
Speaker Change: While still being quite quite disciplined on the Capex I mean the.
Speaker Change: On the Capex to answer your first question I mean, the priority is network improvement for sure.
Speaker Change: And we will continue.
Speaker Change: We talked in the past about Densification about making sure we address the backhaul and the issues with our within our our our own coverage areas and this is where we're continuing to focus our investments.
Speaker Change: And and.
Speaker Change: So that would be you know I won't give you the specific split as we as we never do but.
Speaker Change: That's certainly where are our priority would be would be in terms of capex, but I think that they're really.
As you know.
Speaker Change: Is no dichotomy between.
Speaker Change: Our our expansion plans and our and our Capex guidance.
Speaker Change: Okay. That's helpful and maybe just on churn.
Speaker Change: And I apologize if I missed it I believe you provided some color on churn excrete them, but what was wireless churn in the quarter and then now that we're two thirds or so of the way through the first quarter. How have you seen churn kind of evolve after that period, where the <unk>.
Speaker Change: Industry overall really experienced elevated levels has it remained.
Speaker Change: Seasonally higher than you would expect or has it reverted back to.
Speaker Change: Previous year's churn levels on the wireless side. Thanks.
Speaker Change: Matt our churn is actually down in Q4 in all of our brands and our bump in our three brands.
Speaker Change: Overall of course, our freedom, having a higher churn.
Speaker Change: Obviously, when you make when you do the average it dilutes and it increases the overall.
Speaker Change: Churn number but every grand even freedom has started and you remember I'm sure you will remember we talked about that saying we have to have our eyes on the on churn.
Speaker Change: As we you know and we needed to put in place a number of steps we referred to that many times.
Speaker Change: Two it to to be able to continue to.
Speaker Change: Some of the black spots on some of the network issues, we talked about some of the customer issue, you've got a customer service issues et cetera, et cetera to make sure.
Speaker Change: You know that we are that we address churn and and you know what we did it because of.
Speaker Change: Our freedoms churn is already down.
Speaker Change: Sequentially, and and Thats, you know to us.
Speaker Change: This is huge and ex freedom also to answer your question. We said that you know our videotron Enphase brands together trend was down 10 basis points. So we're continuing to bring downturn as well and are in our home markets and we see this is as you know is very important.
Speaker Change: And as a as a clear indication that our customers are increasingly resilient are increasingly hard to you know two to steal from us as we are improving our service and our and our network is as we said, we would you know and and that's good.
Speaker Change: To be the name of the game you know.
Speaker Change: Because ultimately that's that's where we're positioning ourselves where the price leader, but we need to improve the technology front and the service front and I believe that the churn numbers that we're already showing our are proving that we're on the right track on this.
Speaker Change: Thank you very much.
Jewelry: Alright. Our next question comes from jewelry from core Mark Securities. Please go ahead.
Jewelry: Alright, Thanks for squeezing me in.
Jewelry: Firstly, just on wireline a relatively stronger net adds here.
Jewelry: Some quarters, you know you've talked about heightened price competitive competition from one of your largest competitors.
Jewelry: Can you maybe speak to some of the moving parts that drove the relatively stronger subscriber loading during the quarter and just the competitive environment in general on the broadband side.
Okay.
Speaker Change: Yes, actually yes, we our performance was really good on I'm still I have to say guys that I still irked about the.
Speaker Change: The underlying assumption that our that our performance on wireless it isn't net ads isn't good.
Speaker Change: We actually think is pretty good at 66000, when we did 14 last year and freedom.
Speaker Change: A heck of a lot, but anyway I'll set that that frustration assigned already yes, I'll answer your wireline question.
Speaker Change: Where we did where we just way better than last year I mean, it's it's a hugely hugely competitive market. We've talked about this desktop talked about this in his opening remarks I mean, we have our main competitor that is.
That is crazily competitive offering prices in Quebec set for the same package is 40% to 50% higher in Ontario and elsewhere in the country.
Speaker Change: And and we are still managing on the basis of our of our of our of our strong service because quite transparently, we are not responding.
Or has not been responding.
Speaker Change: On price and because we believe that we have we have.
Speaker Change: Way more to offer and we are very strong on retention and being able to keep.
Speaker Change: Some customers and that's why our performance has been has been has been quite it's been quite interesting and.
Speaker Change: And in wireline.
Speaker Change: Net adds you know.
Speaker Change:
Speaker Change: But.
Speaker Change: To answer your second question I mean, it's I'd be lying if I said that the overall promotional and competitive environment is easing in Quebec, it's not.
Speaker Change: And but but but I think we're showing that this is.
Speaker Change: We've been competing with bell and wireline for for quite some time, you know and <unk>.
Speaker Change: It's ebbed and flowed and.
Speaker Change: Right, Yes of course, I'll admit that right now we're in that we're in a tough spot with them and they are particularly aggressive but you know we are we've been successful in the past it.
Speaker Change: Against them and we will.
Speaker Change: You know we will we will continue to be successful.
Speaker Change: They are bringing down the overall value of the market.
Speaker Change: But we believe that EBIT, so we [laughter].
Speaker Change: We're even better place than they are to compete in that type of environment and we will continue to succeed.
Speaker Change: We've been in this.
Speaker Change: Yes.
Speaker Change: Many years.
Speaker Change: <unk> used.
Speaker Change: We used it but if you if you look at our performance in the competitive performance.
Speaker Change: But I like the fact that decided very competitive.
Speaker Change: Steve It getting more competitive.
Speaker Change: I don't know where it shouldn't be the conclusion other than to say that there are not successful and this is why they continue to reduce their prices.
Speaker Change: So maybe they should ask themselves are they doing something good and when they are you are looking at the overall numbers.
Speaker Change: We've been seeing or improvement.
Speaker Change: Lower than previous quarters.
Speaker Change: Sure.
Speaker Change: By May I remember, even though the we need 3000 net additions in video, which is lower than what they used to on.
Speaker Change: We don't know the split between Ontario, and Quebec.
Speaker Change: Right.
Speaker Change: Maybe it talks about itself. So we're used to it and we will continue to you have to make sure that we will we are offering the best service. The best proposal and we are doing here.
Speaker Change: Efficiently and.
Speaker Change: And wisely.
Speaker Change: Spending your money and things that don't make sense.
Speaker Change: No.
Speaker Change: Yeah.
Speaker Change: <unk> return.
Speaker Change: Okay, Great and then sorry.
Speaker Change: Just one last one for me.
Speaker Change: You typically disclose wireless EBITDA and maybe you did in your prepared remarks, I apologize if I missed it but I think the growth in wireless EBITDA was 65% are you able to disclose the amount of wireless EBITDA during the quarter.
Speaker Change: Yeah, Yeah, I can disclose the $220 million from AR in the quarter from memory I'll just check my number right now to be sure to.
Speaker Change: Yes, 222, 20 in the quarter in terms of our wireless EBITDA.
Speaker Change: Okay, great. Thanks, guys.
Speaker Change: Thanks, It is our friend David on vacation.
Speaker Change: No. He just he just had a meeting.
Speaker Change: He's here.
Speaker Change: Alright.
Speaker Change: Who doesn't have enough time for us then.
Speaker Change: I'll call him this afternoon, who reminds them.
Speaker Change: Florida are important too.
Speaker Change: [laughter].
Speaker Change: No its a joke.
Speaker Change: [laughter]. Thanks, we'll take the next question and I think it's lost on me.
Drew Mcreynolds: Yes. Indeed, so last question comes from drew Mcreynolds from RBC. Please go ahead drew.
Drew Mcreynolds: Oh.
Drew Mcreynolds: It looks like drew dropped dropped off and.
Drew Mcreynolds: But we have Mayer yaghi from another.
Maher Yaghi: Another one that rolled out of the rock and roll it out.
Drew Mcreynolds: Charlotte.
Drew Mcreynolds: Yes.
Drew Mcreynolds: Alright.
Speaker Change: Sorry, I I have I have to come back I have to come back to this because it's fascinating when you were talking about churn I.
Drew Mcreynolds: Bye Bye [laughter].
Speaker Change: Do you have anything to add.
Speaker Change: And to your colleagues won't talk to US maybe you can talk to us.
Drew Mcreynolds: [laughter].
Speaker Change: We can hear you very well.
Speaker Change: Yeah I needed to go back sorry, it's fascinating when.
Speaker Change: When you talked about churn being down sequentially on sales.
Speaker Change: On your brands are on wireless.
Speaker Change: When we saw a significant increase sequentially for for the incumbents I mean at the end of the day don't you think that the experience that we saw in Q4.
Speaker Change: We'll probably highlight.
Speaker Change: That is less likely.
Speaker Change: Going forward that we'll see that kind of significant competitive dynamic happening again because.
Speaker Change: You know, having higher churn for incumbents, but not able to bring you down.
Speaker Change: It is not it's not profitable for anyone so I go back maybe to say.
Speaker Change: The experience we saw in Q4, it doesn't give you pause in terms of our debt.
Speaker Change: At the risk that this will occur again.
Speaker Change: Is less.
Speaker Change: Probably.
Speaker Change: We're not matter that you're asking you know with.
Speaker Change: Exit existential questions.
Speaker Change: Should we anticipate you know again, you know what's going to take place.
Speaker Change: I guess, maybe we can consider that there are competitors very nervous.
Speaker Change: You know us coming in the marketplace.
Speaker Change: What we're seeing is sometimes you know.
Speaker Change: Strange and weird reactions.
Speaker Change: I think Uh huh.
Speaker Change: <unk> bin I'll go into the Friday counsel to fight the CRT D C decision.
Speaker Change: The government is certainly you know, adding in an environment, where they would like more competition.
Speaker Change: You certainly heard about.
Speaker Change: Zero.
Speaker Change: Prime Minister calling.
Speaker Change: Some decisions garbage decisions.
Speaker Change: We're seeing you know.
Speaker Change: Other players going in front of the federal court of appeal to do ask us.
Speaker Change: The competent ore to question what.
Speaker Change: The CRT Tvs are doing.
Speaker Change: We see our arbitration process for the <unk>.
Speaker Change: Clarification process being challenged also by the incumbents.
Speaker Change: We all know that the roaming prices in Canada.
Speaker Change: Sure.
Speaker Change: One of the highest if not the highest in the world.
Speaker Change: We all know what bromine prices.
Speaker Change: Cost in the U S cost in Europe, and there is still you know maintaining that kind of situation last week, we were in front of us here at D C.
Speaker Change: Also our words in front of and do which is the.
Speaker Change: Industry Committee for the company now show them they come in.
Speaker Change: It was quite interesting to see you there.
Speaker Change: We're all anonymous all in items.
Speaker Change: <unk>.
Speaker Change: Our company challenging.
Speaker Change: The big three.
Speaker Change: I never seen that in my life and Ive been there a few times.
Speaker Change: So things well.
Speaker Change: It will happen.
Speaker Change: And.
Speaker Change: Is will this have an effect on churn.
Speaker Change: There is probably going to have an effect on term.
Speaker Change: Oh can we qualify the marketplace in Canada were certainly helped by immigration.
Speaker Change: But more and more being in a mature business.
Speaker Change: It is also a churn market, it's a business of churn and providing the best price with the best offer and the best product will give you.
Speaker Change: The capacity to increase your or to use it.
Speaker Change: This is the business we're in and we intend that we will continue to grow our EBITDA.
Speaker Change: Right.
Speaker Change: Having a better our hu with better service.
Speaker Change: For a higher amount of Canadians I remember of customers. This is how we've been building our different businesses and go back from the Internet access to wireline telephony and finally in the wireless business.
Speaker Change: For the last 10 years.
Speaker Change: I guess that there's no magical recipe.
Speaker Change: The other two offer the best thing to our customers and we look forward to do this.
Speaker Change: For.
Speaker Change: The new footprint.
Speaker Change: We're now.
Speaker Change: Implemented.
Speaker Change: Since the acquisition of the freedom mobile.
Speaker Change: Thank you.
Speaker Change: Thanks Bye.
Speaker Change: So this is the last question. Thank you, Matt and we look forward.
Speaker Change: We've talked with you guys.
Speaker Change: The next conference call. Thank you very much and have a nice day.
Speaker Change: Ladies and gentlemen, this concludes the cubic Inc. 's financial results for the fourth quarter and full year 2023 conference call.
Speaker Change: You for your participation and have a nice day.