Q2 2024 Rogers Communications Inc Earnings Call
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Operator: Thank you for standing by.
Operator: Thank you for standing by. This is the conference operator. Welcome to the Rogers Communications Inc. second quarter 2024 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, we'll conduct a question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.
Operator: This is the conference operator.
Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the Rogers Communications Inc. second quarter 2024 results conference call.
Operator: Welcome to the Rogers Communications in the second quarter, 2024 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded.
Speaker Change: As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, we'll conduct a question and answer session.
Operator: After the presentation, we'll conduct a question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. Should you be made assistance during the conference call, you may signal an operator by pressing star, then zero.
Speaker Change: To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0.
Operator: Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to David Naccarato, Director of Investor Relations with Rogers Communications. Please go ahead, Mr. Naccarato.
David Nakarado: I would now like to turn the conference over to David Nakarado, Director of Investor Relations with Rogers Communications. Please go ahead, Mr. Nakarado.
David Barden: I would now like to turn the conference over to David Naccarato, Director of Investor Relations with Rogers Communications. Please go ahead, Mr. Naccarato. Thank you. Thank you.
David Barden: Thanks, Gaylene, and good morning, everyone, and thank you for joining us. Today, I'm here with our President and Chief Executive Officer, Tony Staffieri, and our Chief Financial Officer, Glenn Brandt. Today's discussion will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2023 annual report regarding the various factors, assumptions, and risks that could cause our actual results to differ. With that, I will turn it over to Tony to begin. Thank you, David, and good morning, everyone.
David Nakarado: Thanks, Galene, and good morning, everyone, and thank you for joining us. Today, I'm here with our President and Chief Executive Officer, Tony Staffieri, in our Chief Financial Officer, Glenn Brandt. Today's discussion will include estimates and other forward-looking information, from which our actual results could differ.
David Barden: Thanks, Gaylene, and good morning, everyone, and thank you for joining us. Today, I'm here with our President and Chief Executive Officer, Tony Staffieri, and our Chief Financial Officer, Glenn Brandt.
Speaker Change: Today's discussion will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2023 annual report regarding the various factors, assumptions, and risks that could cause our actual results to differ. With that, let me turn it over to Tony to begin.
David Nakarado: Please review the cautionary language in today's earnings report and in our 2023 Annual Report regarding the various factors, assumptions, and risks that could cause our actual results to differ.
Tony Staffieri: With that, let me turn it over to Tony to begin. Thank you, David, and good morning, everyone. I'm very pleased to report that Rogers delivered another strong quarter of leading financial and operating results. For 10 straight quarters, we have executed our plan with discipline in a healthy and competitive growing market. Our results speak for themselves. In the second quarter, wireless service revenue and adjusted habitat were both up a healthy 4% and 6%, respectively. Our focus on efficiency and discipline market share growth is reflected in our industry-leading loading and industry-leading wireless margins of 65%. In wireless, we led the market with 162,000 mobile phone net additions.
Anthony Staffieri: I'm very pleased to report that Rogers delivered another strong quarter of leading financial and operating results. For 10 straight quarters, we have executed our plan with discipline in a healthy and competitive growing market. Our results speak for themselves.
Anthony Staffieri: In the second quarter, wireless service revenue and adjusted EBITDA were both up a healthy 4% and 6%, respectively. Our focus on efficiency and disciplined market share growth is reflected in our industry-leading load and industry-leading wireless margins of 65%. In wireless, we led the market with 162,000 mobile phone net additions. This included 112,000 postpaid mobile phone net additions and 50,000 prepaid mobile phone net ads.
Tony: Thank you, David, and good morning, everyone. I'm very pleased to report that Rogers delivered another strong quarter of leading financial and operating results.
Anthony Staffieri: For 10 straight quarters, we have executed our plan with discipline in a healthy and competitive growing market.
Anthony Staffieri: Our results speak for themselves. In the second quarter, wireless service revenue and adjusted EBITDA were both up a healthy 4% and 6% respectively.
Anthony Staffieri: Our focus on efficiency and disciplined market share growth is reflected in our industry-leading loading and industry-leading wireless margins of 65%.
Anthony Staffieri: In wireless, we led the market with 162,000 mobile phone net additions. This included 112,000 postpaid mobile phone net additions and 50,000 prepaid mobile phone net ads.
Tony Staffieri: This included 112,000 post-paid mobile phone net additions and 50,000 prepaid mobile phone net ads. The increase in prepaid net additions reflects our strategy this quarter to increasingly address the flanker market with our prepaid brand, which has also had a successful value proposition for the new to Canada market. This approach allowed us to continue to do well in the flanker category, while at the same time, keeping our focus on penetration growth on the Rogers brand, where the majority of our subscriber loading occurred. As a result, and importantly, we continue to post positive RPU growth; this quarter at 1%.
Anthony Staffieri: The increase in prepaid net additions reflects our strategy this quarter to increasingly address the flanker market with our prepaid brand, which has also had a successful value proposition for the new-to-Canada market. This approach allowed us to continue to do well in the Flanker category, while at the same time keeping our focus on penetration growth on the Rogers brand, where the majority of our subscriber loading occurred. As a result, and importantly, we continue to post positive ARPU growth, this quarter at 1%.
Anthony Staffieri: The increase in prepaid net additions reflects our strategy this quarter to increasingly address the flanker market with our prepaid brand, which has also had a successful value proposition for the new-to-Canada market.
Anthony Staffieri: This approach allowed us to continue to do well in the Flanker category, while at the same time keeping our focus on penetration growth on the Rogers brand, where the majority of our subscriber loading occurred.
Anthony Staffieri: As a result, and importantly, we continue to post positive ARPU growth, this quarter at 1%. Overall, we are delivering industry-leading loading with industry-leading financials in wireless.
Tony Staffieri: Overall, we are delivering industry-leading loading with industry-leading financials in wireless. This robust performance over the past two and a half years is not an accident. We have a clear plan, and we're executing with discipline day after day, week after week, quarter after quarter. Bart, and it's underpinned by our robust national distribution network, the value and flexibility of our Rogers 5G plans, and our record industry-leading investments to build Canada's largest and most reliable 5G network. Just this week, two global leaders in network benchmarking reaffirmed our network leadership position. Excuse me. Once again, awarded Rogers Canada's most reliable 5G network, finding that our wireless networks outperform those of our competitors in reliability, which is increasingly what matters most to our customers.
Anthony Staffieri: Overall, we are delivering industry-leading load with industry-leading financials in wireless. This robust performance over the past two and a half years is not an accident. We have a clear plan, and we're executing with discipline day after day, week after week, quarter after quarter. And it's underpinned by our robust national distribution network, the value and flexibility of our Rogers 5G plans, and our record industry-leading investments to build Canada's largest and most reliable 5G network.
Anthony Staffieri: This robust performance over the past two and a half years is not an accident. We have a clear plan and we're executing with discipline, day after day, week after week, quarter after quarter.
Anthony Staffieri: And it's underpinned by our robust national distribution network, the value and flexibility of our Rogers 5G plans, and our record industry-leading investments to build Canada's largest and most reliable 5G network.
Anthony Staffieri: Just this week, two global leaders in network benchmarking reaffirmed our network leadership position. Boomlott once again named Rogers Canada's most reliable 5G network, finding that our wireless networks outperform those of our competitors in reliability, which is increasingly what matters most to our customers. In a separate benchmarking study, OpenSignal recognized Rogers for delivering the most reliable wireless services in Canada. OpenSignal also named Rogers the fastest and most reliable internet.
Anthony Staffieri: Just this week, two global leaders in network benchmarking reaffirmed our network leadership position.
Anthony Staffieri: Umlaut once again awarded Rogers Canada's most reliable 5G network, finding that our wireless networks outperform those of our competitors in reliability, which is increasingly what matters most to our customers.
Tony Staffieri: In a separate benchmarking study, OpenSignal recognized Rogers for delivering the most reliable wireless services in Canada. OpenSignal also named Rogers Canada's fastest and most reliable internet. The report found we consistently deliver the most reliable experience, the fastest overall download speeds, and the best streaming experience in Canada. For the clear strategy, sustained effort, and smart investments, we're delivering the most reliable network experience to Canadians. In cable, we remained focused on returning to modest growth in the fourth quarter, while maintaining industry-leading financials. Cable revenue was down 2% in the quarter, reflecting a slight sequential improvement from down 3% in the first quarter.
Anthony Staffieri: In a separate benchmarking study, OpenSignal recognized Rogers for delivering the most reliable wireless services in Canada.
Anthony Staffieri: OpenSignal, also named Rogers, Canada's fastest and most reliable internet. The report found we consistently deliver the most reliable experience, the fastest overall download speeds, and the best streaming experience in Canada.
Anthony Staffieri: The report found that we consistently deliver the most reliable experience, the fastest overall download speeds, and the best streaming experience in Canada. With a clear strategy, sustained effort, and smart investments, we're delivering the most reliable network experience to Canadians. In Cable, we remain focused on returning to modest growth in the fourth quarter while maintaining industry-leading financials. Cable revenue was down 2% in the quarter, reflecting a slight sequential improvement from down 3% in the first quarter.
Anthony Staffieri: With a clear strategy, sustained effort, and smart investments, we're delivering the most reliable network experience to Canadians.
Speaker Change: In Cable, we remain focused on returning to modest growth in the fourth quarter while maintaining industry-leading financials.
Speaker Change: Cable revenue is down 2% in the quarter, reflecting a slight sequential improvement from down 3% in the first quarter. Adjusted EBITDA was up an impressive 9% and cable margins expanded to 57%.
Anthony Staffieri: Adjusted EBITDA was up an impressive 9%, and cable margins expanded to 57%, a company and industry best. Our teams continue to work diligently to drive efficiency throughout the business, and we are targeting additional improvements throughout this year. On the Internet, we delivered 26,000 net new subscribers, up slightly from one year ago.
Tony Staffieri: Adjusted EBITDA was up an impressive 9%, and cable margins expanded to 57%. A company and industry best. Our teams continue to work diligently to drive efficiency throughout the business, and we are targeting additional improvements throughout this year. In Internet, we delivered 26,000 net new subscribers, up slightly from one year ago. The environment remains competitive in both the East and West, and we continue to drive growth through enterprise, MDUs, and the expansion of our TPA and 5G home internet offering. In addition to our fixed wireless access launch earlier in the year, we've just expanded our TPA offering in Quebec with a launch of TV and Internet services in the province.
Speaker Change: a company and industry best. Our teams continue to work diligently to drive efficiency throughout the business, and we are targeting additional improvements throughout this year.
Speaker Change: In Internet, we deliver 26,000 net new subscribers, up slightly from one year ago.
Anthony Staffieri: The environment remains competitive in both the East and West, and we continue to drive growth through enterprise, MDUs, and the expansion of our TPIA and 5G home internet offerings. In addition to our fixed wireless access launch earlier in the year, we've just expanded our TPIA offering in Quebec with the launch of TV and Internet services in the province. It's early days, but we see a big opportunity to grow in Quebec, just like we do in southwestern Ontario, where we've also launched.
Speaker Change: The environment remains competitive in both the East and West, and we continue to drive growth through enterprise, MDUs, and the expansion of our TPIA and 5G home internet offering.
Speaker Change: In addition to our fixed wireless access launch earlier in the year, we've just expanded our TPIA offering in Quebec with the launch of TV and Internet services in the province.
Tony Staffieri: It's early days, but we see a big opportunity to grow in Quebec, just like we do in southwestern Ontario, where we've also launched. With Shaw, we doubled our cable footprint to reach just over 60% of Canadian households. Now, with our fixed wireless access and TPA network offerings, we're expanding our home product and coverage to reach almost 100% of Canadian households. We see this as an important strategic expansion, as our wireless network covers almost 100% of all Canadians. Our satellite initiative will also further solidify our coverage leadership. We also continue to advance our DOCSIS roadmap. We're successfully trialling DOCSIS 4.0 modem technology in select Calgary customer homes using our enhanced cable plant.
Speaker Change: It's early days, but we see a big opportunity to grow in Quebec, just like we do in southwestern Ontario where we've also launched.
Anthony Staffieri: With Shaw, we doubled our cable footprint to reach just over 60% of Canadian households. Now, with our fixed wireless access and TPIA network offerings, we're expanding our home product and coverage to reach almost 100% of Canadian households. We see this as an important strategic expansion as our wireless network covers almost 100% of all Canadians. Our satellite initiative will also further solidify our coverage leadership. We also continue to advance our DOCSIS roadmap. We're successfully trialing DOCSIS 4.0 modem technology in select Calgary customer homes using our enhanced cable plan.
Speaker Change: With Shaw, we doubled our cable footprint to reach just over 60% of Canadian households. Now, with our fixed wireless access and TPIA network offerings, we're expanding our home product and coverage to reach almost 100% of Canadian households.
Speaker Change: We see this as an important strategic expansion as our wireless network covers almost 100% of all Canadians. Our satellite initiative will also further solidify our coverage leadership.
Speaker Change: We also continue to advance our DOCSIS Roadmap. We're successfully trialing DOCSIS 4.0 modem technology in select Calgary customer homes using our enhanced cable plan.
Tony Staffieri: This is a global first, and it's delivering four gigabits download and one gigabit upload speeds at an extremely low cost per home. In the more immediate term, we continue to execute on our plans to return the cable business back to organic revenue growth by year end. We will pursue this growth in a disciplined and targeted manner. Finally, in media, top line grew by 7% led by revenue growth at the Toronto Blue Jays, and adjusted EBITDA was break even. The third quarter is seasonally strong for a media business, and we fully expect media to return a profitability in the second half of the year.
Anthony Staffieri: This is a global first, and it's delivering 4 gigabits download and 1 gigabit upload speeds at an extremely low cost per home. In the more immediate term, we continue to execute on our plans to return the cable business to organic revenue growth by year end. We will pursue this growth in a disciplined and targeted manner. Finally, in media, the top line grew by 7%, led by revenue growth at the Toronto Blue Jays, and adjusted EBITDA was breakeven.
Speaker Change: This is a global first and it's delivering 4 gigabits download and 1 gigabit upload speeds at an extremely low cost per home.
Speaker Change: In the more immediate term, we continue to execute on our plans to return the cable business back to organic revenue growth by year end. We will pursue this growth in a disciplined and targeted manner.
Speaker Change: Finally, in media, Top Line grew by 7%, led by revenue growth at the Toronto Blue Jays, and adjusted EBITDA was break-even.
Anthony Staffieri: The third quarter is seasonally strong for our media business, and we fully expect media to return to profitability in the second half of the year. At the same time, we continue to invest in the future and long-term growth. Our landmark content deals with Warner Bros.
Speaker Change: The third quarter is seasonally strong for our media business and we fully expect media to return to profitability in the second half of the year.
Tony Staffieri: At the same time, we continue to invest in the future and long-term growth. Our landmark content deals with Warner Brothers Discovery and NBC Universal is part of that investment. Through these deals, we will bring Canadians the most watched lifestyle and entertainment shows on their platform of choice. Before I turn things over to Glenn, let me say that our teams have worked extremely hard to deliver strong results in a competitive market. Rogers continues to consistently deliver industry-leading financial results and best-in-class customer growth. In the past 10 quarters, we've added an impressive industry best 1.7 million mobile phone and internet net additions.
Speaker Change: At the same time, we continue to invest in the future and long-term growth. Our landmark content deals with Warner Bros. Discovery and NBCUniversal is part of that investment.
Anthony Staffieri: Discovery and NBCUniversal are part of that investment. Through these deals, we will bring Canadians the most-watched lifestyle and entertainment shows on their platform of choice. Before I turn things over to Glenn, let me say that our teams have worked extremely hard to deliver strong results in a competitive market. Rogers continues to consistently deliver industry-leading financial results and best-in-class customer growth. Over the past 10 quarters, we've added an impressive industry-best $1.7 million in mobile phone and internet net addition. More Canadians are choosing Rogers than any other carrier. Full stop.
Speaker Change: Through these deals, we will bring Canadians the most watched lifestyle and entertainment shows on their platform of choice.
Speaker Change: Before I turn things over to Glenn, let me say that our teams have worked extremely hard to deliver strong results in a competitive market.
Glenn Brandt: Rogers continues to consistently deliver industry-leading financial results and best-in-class customer growth. In the past 10 quarters, we've added an impressive industry-best 1.7 million mobile phone and internet net additions.
Tony Staffieri: More Canadians are choosing Rogers than any other carrier. Full stop. We've done this by out executing our competitors and making strategic record investments to grow our business. I'm proud of our team, and I'm confident in our plan to drive continued growth while maintaining our track record to delivered discipline financial results.
Glenn Brandt: More Canadians are choosing Rogers than any other carrier. Full stop.
Glenn Brandt: We've done this by out-executing our competitors and making strategic, record investments to grow our business. I'm proud of our team, and I'm confident in our plan to drive continued growth while maintaining our track record of delivering disciplined financial results. Let me now turn the call over to Glenn. Thank you, Tony. And good morning, everyone.
Glenn Brandt: We've done this by out-executing our competitors and making strategic, record investments to grow our business.
Glenn Brandt: I'm proud of our team and I'm confident in our plan to drive continued growth while maintaining our track record to delivered disciplined financial results. Let me now turn the call over to Glenn.
Glenn Brandt: Let me now turn the call over to Glenn. Thank you, Tony, and good morning, everyone. Thank you for joining us. Rogers' second quarter results reflect another quarter of disciplined industry-leading growth and strong operating and financial performance. As Tony has said, this marks our tenth consecutive quarter leading the Canadian telecom sector in performance. We are focused, and we are determined to meet our commitments succinctly. We are consistently doing what we have said we would do. Wireless service revenue in the quarter grew 4% year over year, driven by disciplined execution across all of our sales channels from coast to coast.
Glenn Brandt: Thank you for joining us. Roger's second quarter results reflect another quarter of disciplined, industry-leading growth and strong operating and financial performance. As Tony has said, this marks our 10th consecutive quarter leading the Canadian telecom sector in performance. We are focused, and we are determined to meet our commitments. Succinctly, we are consistently doing what we have said we would do.
Glenn Brandt: Thank you, Tony, and good morning, everyone. Thank you for joining us.
Glenn Brandt: Rogers' second quarter results reflect another quarter of disciplined, industry-leading growth and strong operating and financial performance.
Glenn Brandt: As Tony has said, this marks our 10th consecutive quarter leading the Canadian telecom sector in performance.
Speaker Change: We are focused and we are determined to meet our commitments. Succinctly, we are consistently doing what we have said we would do.
Glenn Brandt: Wireless service revenue in the quarter grew 4% year-over-year, driven by disciplined execution across all of our sales channels from coast-to-coast. Our targeted strategy of driving higher value for our customers through feature-rich 5G services from our Rogers premium brand remains critical to driving this growth. Postpaid mobile phone customer net additions were $112,000, and prepaid net additions were $50,000.
Speaker Change: Wireless service revenue in the quarter grew 4% year over year, driven by disciplined execution across all of our sales channels from coast to coast.
Glenn Brandt: Our targeted strategy of driving higher value for our customers through feature-rich 5G services from our Rogers premium brand remains critical to driving this growth. Postpaid mobile phone customer net additions were 112,000, and prepaid net additions were 50,000. We anticipate our total net adds of 162,000 customers will once again lead the industry and market share and subscriber growth, while very importantly still leading on financial performance. Through a very active and competitive flanker brand market, Rogers has led across a combination of postpaid and prepaid mobile phone net adds. Our prepaid net adds reflect our commitment to compete across the entire breadth of the market, and our feature rich 5G service plans remain exclusively available under the Rogers premium brand, which remains core to sustaining our strong margins and leading performance in a growing and competitive market.
Speaker Change: Our targeted strategy of driving higher value for our customers through feature-rich 5G services from our Rogers premium brand remains critical to driving this growth.
Speaker Change: Postpaid mobile phone customer net additions were $112,000 and prepaid net additions were $50,000.
Glenn Brandt: We anticipate our total net ads of 162,000 customers will once again lead the industry in market share and subscriber growth, while, very importantly, still leading on financial performance. Through a very active and competitive flanker brand market, Rogers has led across a combination of postpaid and prepaid mobile phone net ads. Our prepaid net ads reflect our commitment to compete across the entire breadth of the market, and our feature-rich 5G service plans remain exclusively available under the Rogers Premium brand, which remains core to sustaining our strong margins and leading performance in a growing and competitive market.
Speaker Change: We anticipate our total net ads of 162,000 customers will once again lead the industry in market share and subscriber growth while very importantly still leading on financial performance.
Speaker Change: Through a very active and competitive flanker brand market, Rogers has led across a combination of postpaid and prepaid mobile phone net ads.
Speaker Change: Our prepaid net ads reflect our commitment to compete across the entire breadth of the market.
Speaker Change: and our feature-rich 5G service plans remain exclusively available under the Rogers Premium brand, which remains core to sustaining our strong margins and leading performance in a growing and competitive market.
Glenn Brandt: Once again, our mobile phone RPU was up 1% year over year, again reflecting our disciplined approach to the market and our emphasis on the premium Rogers brand. In a very competitive market, we remained disciplined in finding a path to leading growth while emphasizing premium services to protect margins. Post-paid mobile phone churn in the quarter was 1.07%, a modest increase of 20 basis points year-over-year, further reflecting our balanced, disciplined approach in the growing and very competitive market. Wireless-adjusted EBITDA was up a strong 6% year-over-year, and our adjusted EBITDA margin grew by 160 basis points over the prior year to 65%.
Glenn Brandt: Once again, our mobile phone ARPU was up 1% year over year, again reflecting our disciplined approach to the market and our emphasis on the premium Rogers brand. In a very competitive market, we remained disciplined in finding a path to leading growth while emphasizing premium services to protect margins. Post-paid mobile phone churn in the quarter was 1.07%.
Speaker Change: Once again, our mobile phone ARPU was up 1% year over year, again reflecting our disciplined approach to the market and our emphasis on the premium Rogers brand.
Speaker Change: In a very competitive market, we remained disciplined in finding a path to leading growth while emphasizing premium services to protect margins.
Speaker Change: Post-paid mobile phone churn in the quarter was 1.07%.
Speaker Change: A modest increase of 20 basis points year-over-year, further reflecting our balanced, disciplined approach in the growing and very competitive market.
Glenn Brandt: A modest increase of 20 basis points year over year, further reflecting our balanced, disciplined approach in the growing and very competitive market. Wireless Adjusted EBITDA was up a strong 6% year over year, and our Adjusted EBITDA margin grew by 160 basis points over the prior year to 65%. This is an all-time high, reflecting our team's exceptional work on driving cost efficiency. Moving to our cable business, we remain committed to returning our cable business to organic revenue growth by the fourth quarter of this year, and this quarter's results reflect those efforts. Cable revenue was down negative 2% year over year, a sequential improvement from the negative 3% decline in Q1 and prior quarters.
Speaker Change: Wireless adjusted EBITDA was up a strong 6% year-over-year, and our adjusted EBITDA margin grew by 160 basis points over the prior year to 65%.
Glenn Brandt: This is a company all-time high, reflecting our team's exceptional work on driving cost efficiencies.
Speaker Change: This is a company all-time high, reflecting our team's exceptional work on driving cost efficiencies.
Glenn Brandt: Moving to our cable business, we remain committed to returning our cable business back to organic revenue growth by the fourth quarter of this year, and this quarter's results reflect those efforts. Cable revenue was down negative 2% year-over-year, sequential improvement from the negative 3% decline in Q1 and prior quarters. We will continue our drive to overall cable revenue growth through the second half, through a combination of subscriber growth and disciplined pricing. Cable-adjusted EBITDA was up a very strong 9% year-over-year, reflecting our continued success in driving scale efficiencies and cost synergies. This strong 9% adjusted EBITDA growth drove a very strong adjusted EBITDA cable margin of 57%, up from 51% in the prior year and up from 56% sequentially from the first quarter.
Glenn Brandt: We will continue our drive for overall cable revenue growth through the second half through a combination of subscriber growth and disciplined pricing. Cable-adjusted EBITDA was up a very strong 9% year-over-year, reflecting our continued success in driving scale efficiencies and cost synergy. This strong 9% adjusted EBITDA growth drove a very strong adjusted EBITDA cable margin of 57%, up from 51% in the prior year and up from 56% sequentially from the first quarter.
Speaker Change: Moving to our cable business. We remain committed to returning our cable business back to organic revenue growth by the fourth quarter of this year, and this quarter's results reflect those efforts.
Speaker Change: Cable revenue was down negative 2% year-over-year. Sequential improvement from the negative 3% decline in Q1 and prior quarters.
Speaker Change: We will continue our drive to overall cable revenue growth through the second half through a combination of subscriber growth and disciplined pricing.
Speaker Change: Cable-adjusted EBITDA was up a very strong 9% year-over-year, reflecting our continued success in driving scale efficiencies and cost synergies.
Speaker Change: This strong 9% adjusted EBITDA growth drove a very strong adjusted EBITDA cable margin of 57%.
Speaker Change: up from 51% in the prior year and up from 56% sequentially from the first quarter.
Glenn Brandt: We anticipate additional efficiency gains and margin improvements through the second half. A key element to returning our cable revenue to modest growth in Q4 of this year will be through customer growth, and we are encouraged by our continued improving performance in retail Internet net additions. Internet net additions were 26,000 in the second quarter, a slight increase from one year ago and consistent with our first quarter performance. This level of loading, combined with our industry best margin performance, further reflects our ballast approach to driving growth while maintaining disciplined pricing. This will continue through the second half.
Glenn Brandt: We anticipate additional efficiency gains and margin improvements through the second half. A key element to returning our cable revenue to modest growth in Q4 of this year will be through customer growth, and we are encouraged by our continued improving performance in retail internet net addition. Internet net additions were 26,000 in the second quarter, a slight increase from one year ago and consistent with our first quarter performance. This level of loading, combined with our industry-best margin performance, further reflects our balanced approach to driving growth while maintaining disciplined pricing. This will continue through the second half.
Speaker Change: We anticipate additional efficiency gains and margin improvements through the second half.
Speaker Change: A key element to returning our cable revenue to modest growth in Q4 of this year will be through customer growth, and we are encouraged by our continued improving performance in retail internet net additions.
Speaker Change: InternetNet additions were 26,000 in the second quarter, a slight increase from one year ago and consistent with our first quarter performance.
Speaker Change: This level of loading combined with our industry best margin performance further reflects our balanced approach to driving growth while maintaining disciplined pricing. This will continue through the second half.
Glenn Brandt: Finally, our sports and media revenue was up 7%, and adjusted EBITDA was break even. We expect our sports and media business to be profitable through the seasonally strong second half and for the full year, driven primarily by revenue growth at the Toronto Blue Jays and Sportsnet. The completed renovations at Roger Center have been very well received by fans, and while the Blue Jays season has not lived up to expectations through the first half, Sports Net performance remains very strong, driven in large part by the Blue Jays and by the Edmonton Oilers' Stanley Cup run. At a consolidated level, Q2 total service revenue increased 1%, and adjusted EBITDA was up 6% year over year.
Glenn Brandt: Finally, our sports and media revenue was up 7%, and adjusted EBITDA was break-even. We expect our sports and media business to be profitable through the seasonally strong second half and for the full year, driven primarily by revenue growth at the Toronto Blue Jays and Sportsnet. The completed renovations at Rogers Center have been very well received by fans, and while the Blue Jays' season has not lived up to expectations through the first half, Sportsnet performance remains very strong, driven in large part by the Blue Jays and by the Edmonton Oilers' Stanley Cup run.
Speaker Change: Finally, our sports and media revenue was up 7% and adjusted EBITDA was break-even.
Speaker Change: We expect our sports and media business to be profitable through the seasonally strong second half and for the full year, driven primarily by revenue growth at the Toronto Blue Jays and Sportsnet.
Speaker Change: The completed renovations at Rogers Centre have been very well received by fans, and while the Blue Jays' season has not lived up to expectations through the first half, Sportsnet performance remains very strong, driven in large part by the Blue Jays and by the Edmonton Oilers' Stanley Cup run.
Glenn Brandt: At a consolidated level, Q2 total service revenue increased 1%, and adjusted EBITDA was up 6% year over year. This drove our consolidated EBITDA margin up by 230 basis points year over year to 46%. Free cash flow also remains strong, reaching $666 million in the quarter, which is up 40% from the prior year, reflecting higher adjusted EBITDA, lower capital expenditures, and lower interest on long-term debt. Capital expenditures were $1 billion in the quarter, down $80 million or 7% from last year.
Speaker Change: At a consolidated level, Q2 total service revenue increased 1% and adjusted EBITDA was up 6% year over year.
Glenn Brandt: This drove our consolidated EBITDA margin up by 230 basis points year-over-year to 46 percent. Free cash flow also remains strong, reaching $666 million in the quarter, which is up 40 percent from the prior year, reflecting higher adjusted EBITDA, lower capital expenditures, and lower interest on long-term debt. Capital expenditures were $1 billion in the quarter, down 80 million, or 7 percent from last year. Turning to the balance sheet, at June 30, we had $4.3 billion of available liquidity, including $450 million in cash and short-term deposits, and $3.9 billion available under our bank credit facilities. Our weighted average interest rate on all borrowings is 4.7 percent, down from 4.9 percent at year end, and our weighted average turnover maturity is 10 years.
Speaker Change: This drove our consolidated EBITDA margin up by 230 basis points year-over-year to 46%.
Speaker Change: Free cash flow also remains strong, reaching $666 million in the quarter, which is up 40% from the prior year, reflecting higher adjusted EBITDA, lower capital expenditures, and lower interest on long-term debt.
Speaker Change: Capital expenditures were $1 billion in the quarter, down $80 million or 7% from last year.
Glenn Brandt: Turning to the balance sheet, on June 30th, we had $4.3 billion of available liquidity, including $450 million in cash and short-term deposits and $3.9 billion available under our bank credit facilities. Our weighted average interest rate on all borrowings is 4.7%, down from 4.9% at year-end, and our weighted average return to maturity is 10 years. Our 4.7 times debt leverage ratio was flat to Q1 of this year, but it is made more notable in that our Q2 leverage includes our $475 million investment made in the first half for the 3,800 MHz spectrum we won at the auction last year. $380 million of which was made in Q2. Without this $475 million investment, leverage in Q2 would have improved to 4.6 times.
Speaker Change: Turning to the balance sheet, on June 30th, we had $4.3 billion of available liquidity, including $450 million in cash and short-term deposits, and $3.9 billion available under our bank credit facilities.
Speaker Change: Our weighted average interest rate on all borrowings is 4.7%, down from 4.9% at year-end. And our weighted average term to maturity is 10 years.
Glenn Brandt: Our 4.7 times debt leverage ratio was flat to Q1 of this year, made more notable in that our Q2 leverage includes our $475 million investment made in the first half for the 3,800 megahertz spectrum we won at the auction last year, $380 million of which was made in Q2. Absent this $475 million investment, leverage in Q2 would have been proved to 4.6 times. We remain focused on reducing leverage through the second half, targeting 4.2 times by year end. Our target is to reduce leverage by roughly half a turn each year, supported by a combination of earnings growth and paying down debt with available free cash flow and proceeds from asset sales.
Speaker Change: Our 4.7 times debt leverage ratio was flat to Q1 of this year.
Speaker Change: Made more notable in that our Q2 leverage includes our $475 million investment made in the first half for the 3800 MHz spectrum we won at the auction last year.
Speaker Change: $380 million of which was made in Q2.
Speaker Change: Absent this $475 million investment, leverage in Q2 would have improved to 4.6 times.
Glenn Brandt: We remain focused on reducing leverage through the second half, targeting 4.2 times by year-end. Our target is to reduce leverage by roughly half a turn each year, supported by a combination of earnings growth and paying down debt with available free cash flow and proceeds from asset sales. As we have indicated in prior quarters, we have processes currently underway to sell targeted non-core assets, predominantly real estate assets, worth an estimated $1 billion. However, these asset sales are taking longer than originally anticipated as a result of continued softness in the market ahead of anticipated interest rate reductions.
Speaker Change: We remain focused on reducing leverage through the second half, targeting 4.2 times by year-end.
Speaker Change: Our target is to reduce leverage by roughly half a turn each year, supported by a combination of earnings growth and paying down debt with available free cash flow and proceeds from asset sales.
Glenn Brandt: As we have indicated in prior quarters, we have processes currently underway to sell targeted non-core assets, predominantly real estate assets, worth an estimated $1 billion. These asset sales are taking longer than originally anticipated, as a result of continued softness in the market ahead of anticipated interest rate reductions. We remain committed to this initiative; however, we are also focused on ensuring we drive maximum proceeds.
Speaker Change: As we have indicated in prior quarters, we have processes currently underway to sell targeted non-core assets, predominantly real estate assets, worth an estimated $1 billion.
Speaker Change: These asset sales are taking longer than originally anticipated as a result of continued softness in the market ahead of anticipated interest rate reductions.
Operator: We remain committed to this initiative, but we are also focused on ensuring we drive maximum proceeds. And finally, as you read in our press release this morning, we are reaffirming all of our 2024 guidance range targets. We remain confident in our continued disciplined execution, working to drive cost efficiencies and improved margins while investing in our growing markets and services. We are focused on driving growth and on de-levering our balance sheet, as reflected in this quarter's strong results.
Speaker Change: We remain committed to this initiative. However, we are also focused on ensuring we drive maximum proceeds.
Glenn Brandt: And finally, as you read in our press release this morning, we are reaffirming all of our 2024 guidance range targets. We remain confident in our continued disciplined execution, working to drive cost efficiencies and improved margins, while investing in our growing markets and services. We are focused on driving growth and on delivering our balance sheet, as reflected in this quarter's strong results. As I indicated in my opening, and as you heard in Tony's remarks, we are meeting our commitments; we are doing what we said we would do.
Speaker Change: And finally, as you read in our press release this morning, we are reaffirming all of our 2024 guidance range targets.
Speaker Change: We remain confident in our continued disciplined execution, working to drive cost efficiencies and improved margins, while investing in our growing markets and services.
Speaker Change: We are focused on driving growth and on de-levering our balance sheet, as reflected in this quarter's strong results.
Operator: As I indicated in my opening, and as you heard in Tony's remarks, we are meeting our commitments; we are doing what we said we would do. Let me conclude by congratulating and thanking our incredible team of dedicated and proud employees for their leadership. For the 10th consecutive quarter, we have delivered leading performance in a growing and highly competitive marketplace. Thank you for your time this morning, and with that, Gaylene, can we please commence the Q&A?
Speaker Change: As I indicated in my opening, and as you heard in Tony's remarks, we are meeting our commitments. We are doing what we said we would do.
Glenn Brandt: Let me conclude by congratulating and thanking our incredible team of dedicated and proud employees for their leadership. For the 10th consecutive quarter, we have delivered leading performance in a growing and highly competitive marketplace.
Speaker Change: Let me conclude by congratulating and thanking our incredible team of dedicated and proud employees for their leadership.
Speaker Change: For the 10th consecutive quarter, we have delivered leading performance in a growing and highly competitive marketplace.
Glenn Brandt: Grace. Thank you for your time this morning.
Operator: And with that, Galine, can we please commence with the Q&A. Thank you. Certainly, we will now begin the question and answer session. To join the question Q&A, you may press star, then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two.
Speaker Change: Thank you for your time this morning, and with that, Gaylene, can we please commence with the Q&A? Thank you.
Operator: Thank you, certainly. We will now begin the question and answer session. To join the question queue, you may press star and then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys.
Gaylene: Certainly. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys.
Drew Mcreynolds: To withdraw your question, please press star then two. The first question comes from Drew McReynolds with RBC. Please go ahead. Yeah, thanks very much. And good morning to you.
Gaylene: To withdraw your question, please press star then two.
Drew Mcreynolds: The first question comes from Drew McReynolds with RBC. Please go ahead. Yeah, thanks very much. And good morning, two for me.
Gaylene: The first question comes from Drew McReynolds with RBC. Please go ahead.
Anthony Staffieri: First, maybe, I guess, Tony or Glenn, with respect to just on the wireless side, and you know, what appears to be kind of continued demand for the Rogers main brand kind of value proposition. Can you just give us a little sense of, you know, what's driving that particularly? Because obviously, given the kind of ARPU performance, there's demand there, and up-tiering is still happening. Just curious from a consumer perspective: is it, you know, speed, quality of service, data buckets, you know, other premium kinds of content that's offered? I would love to kind of get a sense of that.
Drew Mcreynolds: Yeah, thanks very much and good morning. Two for me. First, maybe, I guess, Tony or Glenn, with respect to just on the wireless side and, you know, what appears to be kind of continued
Drew Mcreynolds: First, maybe I just Tony or Glenn. With respect to just on the wireless side and you know what appears to be kind of continued demand for the Rogers main brand kind of value proposition, can you just give us a little sense of, you know, what's driving that particularly, because obviously given kind of the our group performance, there's demand there and up cheering still happening, just curious from a consumer perspective as it, you know, the state of buckets, you know, other premium kind of content that's offered, I would love to kind of get a sense of that.
Drew Mcreynolds: Demand for the Rogers main brand kind of value proposition. Can you just give us a little sense of
Drew Mcreynolds: You know, what's driving that particularly, because obviously given kind of the ARPU performance, there's...
Drew Mcreynolds: , and Steve . I'm curious, from a consumer perspective, is it speed, quality of service, data buckets, other premium content that's offered? I would love to get a sense of that.
Drew Mcreynolds: And then second, when good to hear just kind of continued expectation of margin expansion within table, looks like you're probably spending about a billion on TV programming costs, which is a relatively big number and I know Tony talked about kind of modernizing kind of the TV proposition in consumers' home for what people actually want to watch, just wondering how, you know, your expectation is on bringing down those programming costs over time or maybe set a different way of optimizing those programming costs just to align with what consumers want to watch. Thank you. Thanks for the questions.
Drew Mcreynolds: Glenn, good to hear just kind of continued expectation of margin expansion within cable. It looks like you're probably spending about a billion on TV programming costs.
Speaker Change: which is a relatively big number, and I know you and Tony have talked about kind of modernizing kind of the TV.
Speaker Change: proposition in consumers home for what people actually want to watch. Just wondering how you know your expectation is on bringing down those programming costs over time or maybe set a different way optimizing those programming costs just to align with what consumers want to watch. Thank you.
Glenn Brandt: And then second, Glenn, good to hear just kind of the continued expectation of margin expansion within cable. Looks like you're probably spending about a billion on TV programming costs, which is a relatively big number. And I know you and Tony have talked about kind of modernizing the TV proposition in consumers' homes for what people actually want to watch. Just wondering how your expectation is on bringing down those programming costs over time or maybe a different way of optimizing those programming costs just to align with what consumers want to watch. Thank you. Thanks for the questions, Drew. I'll start with the first one on wireless.
Tony Staffieri: Drew, I'll start with the first one on wireless. As you pointed out and I said in my opening remarks, the majority of our net subscriber additions continue to be on the Rogers brand. A while ago, we set out on a strategy to focus on the Rogers brand and drive growth on Rogers. So there are a few things that we're seeing that's contributing to our success there. First and foremost, it's the network. You know, as I said in the comments, reliability is becoming more and more important, and we were extremely pleased to see a lot and OpenSignal reaffirm our network performance and best reliability.
Speaker Change: Thanks for the questions Drew. I'll start with the first one on wireless.
Anthony Staffieri: As you pointed out and I said in my opening remarks, the majority of our net subscriber additions continue to be on the Rogers brand. A while ago, we set out on a strategy to focus on the Rogers brand and drive growth on Rogers. So there are a few things that we're seeing that's contributing to our success there. First and foremost, it's the network.
Speaker Change: As you pointed out and I said in my opening remarks, the majority of our net subscriber additions continue to be on the Rogers brand. A while ago we set out on a strategy to focus on the Rogers brand and drive growth on Rogers.
Speaker Change: So there are a few things that we're seeing that's contributing to our success there.
Anthony Staffieri: As I said in the comments, reliability is becoming more and more important, and we were extremely pleased to see Oomlat and OpenSignal reaffirm our network performance and best reliability. That is the single biggest driver of churn reduction as well as new acquisitions. Secondarily, we continue to lean on our distribution network across the country. It has been extremely effective for us in all channels in both large markets as well as in what we would call smaller markets as well.
Speaker Change: First and foremost, it's the network. As I said in the comments, reliability is becoming more and more important, and we were extremely pleased.
Speaker Change: to see Oomlat and OpenSignal reaffirm our network performance and best reliability. That is the single biggest driver of churn reduction as well as new acquisitions.
Tony Staffieri: That is the single biggest driver of churn. Reduction as well as new acquisitions. Secondly, we continue to lean on our distribution network across the country. It has been extremely effective for us in all the channels in both large markets as well as in what we would call smaller markets as well. In terms of offerings on the Rogers brand, we introduce Disney Plus, and that's been helpful to it. But the other pieces convenient financing of phones with the Rogers Mastercard; consumers can finance their acquisition of phones over 48 months. And effectively cut their monthly bill in half when it comes to paying for the phone.
Speaker Change: Secondarily, we continue to lean on our distribution network across the country. It has been extremely effective for us in all the channels, in both large markets as well as in what we would call smaller markets as well.
Anthony Staffieri: In terms of offerings on the Rogers brand, we introduced Disney Plus, and that's been helpful to it. The other piece is convenient financing of phones. With the Rogers MasterCard, consumers can finance their acquisition of phones over 48 months and effectively cut their monthly bill in half when it comes to paying for the phone.
Speaker Change: In terms of offerings,
Speaker Change: on the Rogers brand. We introduced Disney Plus and that's been helpful to it. But the other piece is convenient financing of phones. With the Rogers MasterCard.
Speaker Change: Consumers can finance their acquisition of phones over 48 months and effectively cut their monthly bill in half when it comes to paying for the phone.
Anthony Staffieri: That's been extremely helpful as well. Those are some of the big factors. The last one is the power of bundling our wireless service together with our home products, particularly in the West. The ability to now bring more competition to the West has been a good source of growth for us. Alberta and B.C.
Tony Staffieri: And so that's been extremely helpful as well. So those are some of the big factors. And then the last one is the power of bundling. Our wireless together with our home products, particularly in the West. The ability to now bring more competition to the West has been a good source of growth for us. Alberta and BC continue to be our fastest growing markets with healthy market share. And that's contributed to the overall Rogers load.
Speaker Change: And so that's been extremely helpful as well.
Speaker Change: So those are some of the big factors. And then the last one is the power of bundling. Our wireless together with our home products, particularly in the West, the ability to now bring more competition to the West has been a good source of growth for us.
Anthony Staffieri: continue to be our fastest growing markets with healthy market share. That's contributed to the overall Rogers load. And then, Drew, on your question on programming costs, we really are just at the start of addressing that category. It's a large category. It's going to take some time. Some of the contracts we have in place run over multiple quarters, and some of it is shifting customer presence or customer channel choices. That takes time.
Speaker Change: Alberta and B.C. continue to be our fastest growing markets with healthy market share and that's contributed to the overall Rogers loading.
Tony Staffieri: and then Drew on your question on programming costs, we really are just at the start of addressing that category. It's a large category; it's going to take some time. Some of the contracts we haven't placed run over for us, and some of it is shifting customer presence, but our customer channel choices take time. However, we've initiated a program; you saw the warned deals where we are now going directly to the studio and buying the programming. That's a start. We are looking to source leading programming that the customers watch, making that available, making that available at lower margins by cutting out the middle man company and going direct.
Speaker Change: And then, Drew, on your question on programming costs, we really are just at the start of addressing that category. It's a large category. It's going to take some time.
Speaker Change: Some of the contracts we have in place run over multiple quarters and some of it is shifting customer presence or customer channel choices. That takes time.
Glenn Brandt: However, we've initiated a program, you saw the Warner deal, where we are now going directly to the studio and buying the programming. That's a start. We are looking to source leading programming that the customers watch, making that available, and making that available at lower margins by cutting out the middleman company and going direct.
Speaker Change: However, we've initiated a program, you saw the Warner deal, where we are now going directly to the studio and buying the programming. That's a start. We are looking to...
Speaker Change: source
Speaker Change: You know, leading programming that the customers watch.
Speaker Change: making that available and making that available at lower margins by cutting out the middleman company and going direct. And so you saw that. We will continue efforts and opportunities in that vein.
Drew Mcreynolds: So, you saw that we will continue efforts and opportunities in that vein. This is going to take multiple quarters to fully fill in. But we're at a good start. Thanks very much. Thanks, Drew.
Glenn Brandt: We will continue efforts and opportunities in that vein. This is going to take multiple quarters to fully fill in, but we're at a good start. Okay, thanks very much.
Speaker Change: This is going to take multiple quarters to fully fill in.
Speaker Change: But we're at a good start.
Drew Mcreynolds: Thanks Drew. Thanks Drew. Next question, Galeen. Yes, the next question is from Vince Valentini with TD Cullen. Please go ahead. Bye, thank you. Can you hear me okay?
Speaker Change: Okay, thanks very much.
Operator: Next question, Galey.
Speaker Change: Thanks Drew. Thanks Drew. Next question Galeen.
Ben Salantini: Yes, the next question is from Ben Salantini with TD Collins. Please go ahead. Hi, thank you. You hear me okay? Yes, thanks, friends. I'm going to ask about pre-paid, which is the topic we don't talk about much, but you had a pretty big uptick in pre-paid this quarter. And two part of question, one, what's the change in your deactivation policy last year? Is there a new seasonality, perhaps, so people would come in and out, you know, in year, like maybe there's some seasonality of people coming in in Q2 and those people will quickly deactivate in Q3 or Q4.
Speaker Change: Yes, the next question is from Vince Valentini with TD Collins. Please go ahead.
Operator: Yes, Thanks, Vince. I'm going to ask you about prepaid, which is a topic we don't talk about much, but you had a pretty big uptick in prepaid this quarter. And a two-part question. One question: with the change in your deactivation policy last year, is there a new seasonality perhaps of people who would come in and out during the year, like maybe there's some seasonality of people coming in in Q2, and those people will quickly deactivate in Q3 or Q4?
Vince Valentini: Hi, thank you. Can you hear me okay?
Operator: Is there anything we should think about for modeling, because it was a bit of a surprise to us how high prepaid was this quarter? And second, maybe more important, can you give us a little evidence and history on your track record of being able to migrate people from prepaid to postpaid? How successful are you in that? How long does it typically take? If there's any percentage you can give, it'd be wonderful, but I don't expect the moon, but any color you can give would be helpful, thanks.
Speaker Change: Yes. Thanks, Vince.
Vince Valentini: Thank you.
Vince Valentini: I'm going to ask about prepaid, which is a topic we don't talk about much, but you had a pretty big uptick in prepaid this quarter.
Vince Valentini: Two part question, one...
Speaker Change: With the change in your deactivation policy last year,
Speaker Change: Is there a new seasonality perhaps of people who would come in and out you know in year like maybe there's some seasonality of people coming in in Q2 and
Speaker Change: Those people will quickly deactivate in Q3 or Q4. Just wondering if there's anything we should think about for modeling, because this was a bit of a surprise to us, how high prepaid was this quarter. And second part, maybe more important, can you give us a little evidence and history
Ben Salantini: Just one or two anything we should think about for modeling, because this has been a surprise to us how high-prepaid life is quarter. And second part, maybe more important, can you give us a little evidence and history on your track record of being able to migrate? People from pre-paid to post-paid, how successful are you in that? How long do it typically take? If there's any percentage you can give it to you? Wonderful, but I don't expect the moon. But any color you didn't give will be helpful. Thanks.
Speaker Change: Your track record of being able to migrate people from prepaid to postpaid. How successful are you in that? How long does it typically take? If there's any percentage you can give, it'd be wonderful, but I don't expect the moon But any color you can give me would be helpful. Thanks
Tony Staffieri: Thanks for the questions, Ben. A couple of items that I'll go through. So this quarter, we decided to leverage our chatterbrand in the flanker space. And we're pleased with the results we saw there. The chatterbrand is a low cost and very simple to activate on type of process. And it's particularly well suited for the new to Canada that don't necessarily have a credit history. And so, as we leaned on that brand, we found it to be very successful. I should tell you that the average RPU in of prepaid is just under $30, and most of the customers are on autopay.
Anthony Staffieri: Thanks for the questions, Vince. There are a couple of items that I'll go through. So this quarter, we decided to leverage our Chatter brand in the Flanker space, and we're pleased with the results we saw there. The Chatter brand is a low-cost and very simple-to-activate type of process, and it's particularly well-suited for newcomers to Canada that don't necessarily have a credit history, and so as we leaned on that brand, we found it to be very successful.
Speaker Change: Thanks for the questions, Vince. A couple of items that I'll go through.
Speaker Change: So this quarter we decided to leverage our Chatter brand in the Flanker space and
Speaker Change: We're pleased with the results we saw there.
Speaker Change: The Chatter brand is a low-cost.
Speaker Change: and very simple to activate type of process and it's particularly well suited for the new to Canada that don't necessarily have a credit history and so as we leaned on that brand
Anthony Staffieri: I should tell you that the average ARPU-IN of prepaid is just under $30, and most of the customers are on auto-pay, and so they very much look and feel like what I would describe as the Flanker category, and so it's been a very successful entry point into our ecosystem. We continue to focus on and do well on the pre-to-post migration. We don't share numbers on that, but we are extremely successful in migrating those customers to a post-paid brand, and surprisingly, many will go right from the Chatter prepaid brand right to Rogers, and so that's been very successful for us. In terms of the seasonality, there is a little bit of a seasonal uptick in the second quarter, but that isn't what contributed to the large increase in prepaid subscribers
Speaker Change: We found it to be very successful. I should tell you that...
Speaker Change: The average ARPU in of prepaid is just under $30.
Tony Staffieri: And so they very much look and feel like what I would describe as the Flanker category. And so it's been a very successful entry point into our ecosystem. We continue to focus and do well on the pre-to-post migration. We don't share numbers on that, but we are extremely successful in migrating those customers to a postpaid brand. And surprisingly, many will go right from the Chatter prepaid brand, right to Rogers brand. And so that's been very successful for us. In terms of the seasonality, there is a little bit of seasonal uptick in the second quarter, but that isn't what contributed to the large increase in prepaid subscribers and cute.
Speaker Change: and most of the customers are on AutoPay. And so they very much look and feel like.
Speaker Change: You know, what I would describe as the flanker category.
Speaker Change: And so it's been a very successful entry point into our ecosystem.
Speaker Change: We continue to focus and do well on the pre-to-post migration.
Speaker Change: We don't share numbers on that, but we are extremely successful in migrating those customers to a post-paid brand. And surprisingly, many will go right from the Chatter prepaid brand right to Rogers brand.
Speaker Change: and so that's been very successful for us. In terms of the seasonality, there is a little bit of seasonal uptick in the second quarter, but that isn't what contributed to the large increase in prepaid subscribers in Q2.
Tony Staffieri: II. So just to be clear, we shouldn't expect some sort of spike in churn and negative prepaid in Q3 as an offset. This is mostly organic success. That's right, Vince. There always is seasonality in terms, as you point out, in subsequent quarters, but don't expect a net negative in future quarters. This is organic that we see long-term, as being long-term customers for us.
Anthony Staffieri: So just to be clear, we shouldn't expect some sort of spike in churn and negative prepaid in Q3 as an offset. This is mostly organic success. That's right, Vince.
Speaker Change: So just to be clear, we shouldn't expect some sort of spike in churn and a negative prepaid in Q3 as an offset. This is mostly organic success.
Anthony Staffieri: There always is seasonality, as you point out, in subsequent quarters, but don't expect a net negative in future quarters. This is organic growth that we see as being long-term customers for us. I'll leave it there.
Speaker Change: That's right, Vince. There always is seasonality, as you point out, in subsequent quarters.
Speaker Change: But don't expect a net negative in future quarters. This is organic that we see as being long-term customers for us.
Anthony Staffieri: Thanks, Tony. Thank you. Thank you, Vince. Next question, please, Aileen. The next question is from Maher Yaghi with Scotiabank. Please go ahead.
Ben Salantini: All right, I'll leave it there. Thanks, Doug. Thank you. Thanks, Vince.
Vince Valentini: Great. I'll leave it there. Thanks, Tony.
Operator: Next question, please.
Vince Valentini: Thank you.
Maher Yaghi: The next question is from Maher Yaghi with Scotiabank. Let's go ahead. Great. Thank you for taking my questions. Encouraging results, guys, in a competitive market. You have stayed on-side in terms of our food growth in wireless, while others have not. How should we think about your our food trends in wireless in the second half? It looks like pricing is finding a bottom here. What are the risks in your view when it comes to back to school and the dynamics over there to pressure our food beyond what we have seen already? The second question I have is on leverage.
Vince Valentini: Thanks, Vince. Next question, please, Aileen.
Aileen: The next question is from Maher Yaghi with Scotiabank. Please go ahead.
Maher Yaghi: Great. Thank you for taking the time to answer my questions. Encouraging results, guys, in a competitive market. You have stayed on top in terms of ARPU growth and wireless, while others have not. How should we think about your ARPU trends and wireless in the second half? It looks like pricing is finding a bottom here. What are the risks, in your view, when it comes to back-to-school and the dynamics over there that could pressure ARPU beyond what we have seen already? And the second question I have is about leverage. It's the hardest thing for them to deliver.
Maher Yaghi: Thank you for taking my questions.
Speaker Change: You know stayed on side in terms of ARPU growth and wireless
Speaker Change: while others have not.
Maher Yaghi: How should we think about your ARPU trends in wireless in the second half? It looks like pricing is finding a bottom here.
Speaker Change: What are the risks in your view when it comes to back to school and the dynamics over there to pressure our pool beyond what we have seen already? And the second question I have is on leverage. You know, telcos...
Maher Yaghi: Telcos, it's the hardest thing for them to deliver. Glenn, you mentioned that you had to pay for Spectrum in Q2. I know you mentioned that you continue to look for divestitures to occur before the end of the year with that billion-dollar free-to-state. But any other opportunities beyond that billion-dollar free-to-state that you can look at that you don't need necessarily to own what you can rent to run the business. Thank you.
Anthony Staffieri: Glenn, you mentioned that you had to pay for Spectrum and Q2. I know you mentioned that you continue to look for divestitures to occur before the end of the year with that billion-dollar real estate. Any other opportunities beyond that billion dollars of real estate that you can look at that you don't necessarily need to own, but you can rent to run the business? Thanks for the questions, Mayor. I'll start with the first one.
Speaker Change: It's the hardest thing for them to deliver, and Glenn, you mentioned that you had to pay for Spectrum and Q2. I know you mentioned that you continue to look for divestitures to occur before the end of the year with that billion-dollar free real estate.
Speaker Change: Any other opportunities beyond that billion dollar of real estate that you can look at that you don't need necessarily to own, but you can rent to run the business? Thank you.
Maher Yaghi: Thanks for the questions, Mayor. I'll start with the first one. We continue to focus on not only leading market share but continuing to drive our food growth. And so, as we look to the back half of the year, our expectation is we will continue to be on the growth side of our food, while there are pressures, as you would expect. We have a number of initiatives that we're driving that we're confident. We'll continue to have solid our food growth for us. As we head into back to school, our expectation is, of course, it's going to be competitive just like it is every year.
Anthony Staffieri: [inaudible] We continue to focus on not only leading market share but continuing to drive ARPU growth. And so, as we look to the back half of the year, our expectation is that we will continue to be on the growth side of ARPU. While there are pressures, as you would expect, we have a number of initiatives that we're driving that we're confident will continue to deliver solid ARPU growth for us. As we head into back-to-school, our expectation is, of course, it's going to be competitive just like it is every year. As we enter the back half, more than half the annual loadings occur starting with back-to-school.
Speaker Change: We continue to focus on not only leading market share, but continuing to drive ARPU growth. And so as we look to the back half of the year, our expectation is we will continue to be on the growth side of ARPU. While there are pressures, as you would expect,
Speaker Change: We have a number of initiatives that we're driving that we're confident will continue to have solid ARPU growth for us.
Speaker Change: As we head into back to school, our expectation is, of course, it's going to be competitive, just like it is every year. As we enter the back half,
Glenn Brandt: As we enter the back half, more than half the annual loadings occur starting with back to school. And so, as that kicks off in the coming days and weeks, you can expect us to focus on the Rogers brand in the back to school category, together with bundling with our home internet and, in particular, our 5G fixed wireless access product for internet. Our focus has been and will continue to be on the value proposition beyond just price. Our expectation is to continue to be disciplined on handset financing and our approach there. We don't see ourselves moving into subsidizing handsets, which one of our competitors is focused on.
Speaker Change: More than half the annual loadings occur starting with back-to-school.
Anthony Staffieri: And so as that kicks off in the coming days and weeks, you can expect us to focus on the Rogers brand in the back-to-school category, together with bundling with our home Internet and, in particular, our 5G fixed wireless access product for the Internet. Our focus has been and will continue to be on the value proposition beyond just price. Our expectation is to continue to be disciplined on handset financing and our approach there.
Speaker Change: And so, as that kicks off in the coming days and weeks...
Speaker Change: You can expect us to focus on the Rogers brand in the back-to-school category together with bundling with our home internet and in particular our 5G fixed wireless access product for internet.
Speaker Change: Our focus has been and will continue to be on the value proposition beyond just price.
Speaker Change: Our expectation is to continue to be disciplined on handset financing and our approach there. We don't see ourselves moving into subsidizing handsets.
Anthony Staffieri: We don't see ourselves moving into subsidizing handsets, which one of our competitors is focused on. We have a different value proposition, and we're going to focus on 5G and the Rogers brand, as I said, and then Maher on de-levering. We've got our prime. Two sources of de-levering.
Speaker Change: which one of our competitors is focused on. We have a different value proposition and we're gonna focus on 5G and the Rogers brand as I said.
Glenn Brandt: We have a different value proposition, and we're going to focus on 5G and the Rogers brand, as I said.
Glenn Brandt: and then mayor on on delivering we've our prime two sources of delivering we have well-in-hand it's earnings growth and it's free cash flow seasonally most of our free cash flow comes in the second half and in fact it comes in the last four months of the year that's just seasonally how our free cash flow generally hits through the year and so when you look at you know we've given guidance of free cash flow around three billion dollars range two point nine to three point one billion so for ease of numbers call it three billion dollars our cash paid dividends now or somewhere in the range of seven hundred million dollars in change that leaves two and a quarter billion dollars roughly for us to use to invest well half a billion in spectrum this year so that comes out of available free cash flow the rest we will use to pay down debt those two first and foremost we have in hand and those are those are our key drivers in delivering quarter after quarter year after year and you see the impact of that through this quarter and prior quarters on the asset sales we will complete asset sales you're right real estate we've got some that's vacant that we can sell we've got some that we own that we occupy and could you know sell and lease back the greatest productivity comes from selling assets that you don't need to lease back but if if there are transactions there that makes sense on on looking at the other we will but we we've got time and we're not we're certainly not in a fire sale you saw us pivot at the end of last year realizing the market was softer than we had expected on the asset sales and you know we sold the Kojiko shares we took advantage of an uptick in the market and brought in some you know a significant debt reduction in the in the tail end of last year that bought us some time and allowed us some leeway to to not fire sale are real estate and you know non-core asset holdings we are still focused on on driving those sales so thank you thanks mayor thanks mayor next question David the next question is from David Barton with Bank of America deep go ahead hi good morning I thanks for taking a question it's Matt sitting in for Dave this morning to if I could just on wireless I wanted to just follow up on the on Drew's question or the answer to it I know the focus has been on the Roger's brand you know with its improved network quality obviously bundling is something that's you know happening more and more in the market so I you know given that and you know we still see churn sort of ticking up I wonder how you view that if you view the churn as a return to normal or we should see as the strategy continues to play out that we should see some churn benefits going forward that we should be modeling in and then just on cable you know, obviously encouraging the view of growth and returning to top line growth by year end you know, should we factor in some price increases in the back half of the year?
Speaker Change: and then Maher on de-levering. Our prime two sources of de-levering we have well in hand. It's earnings growth
Glenn Brandt: We have well in hand its earnings growth and its free cash flow. Seasonally, most of our free cash flow comes in the second half, and, in fact, it comes in the last four months of the year. That's just seasonally how our free cash flow generally hits through the year. And so when you look at, you know, we've given guidance of free cash flow around $3 billion, ranging from $2.9 to $3.1 billion. So for ease of numbers, let's call it $3 billion.
Speaker Change: And it's free cash flow.
Maher Yaghi: Seasonally, most of our free cash flow comes in the second half, and in fact,
Mayor: It comes in the last four months of the year.
Speaker Change: That's just seasonally how our free cash flow generally hits through the year.
Speaker Change: And so, when you look at, you know, we've given guidance of free cash flow around three billion dollars, range 2.9 to 3.1 billion, so for ease of numbers, call it three billion dollars. Our cash paid dividends.
Glenn Brandt: Our cash paid dividends now are somewhere in the range of $700 million and change. That leaves two and a quarter billion dollars, roughly, for us to use to invest. Well, half a billion in spectrum this year, so that comes out of available free cash flow. The rest we will use to pay down debt.
Speaker Change: Now or somewhere in the range of 700 million dollars and change.
Speaker Change: That leaves two and a quarter billion dollars, roughly, for us to use to invest. Well, half a billion in spectrum this year, so that comes out of available free cash flow. The rest we will use to pay down debt.
Glenn Brandt: Those two, first and foremost, we have in hand, and those are our key drivers of de-levering quarter after quarter, year after year. And you see the impact of that through this quarter and prior quarters. On asset sales, we will complete asset sales. You're right, real estate. We've got some that's vacant that we can sell. We've got some that we own that we occupy and could sell and lease back.
Speaker Change: Those two, first and foremost, we have in hand and those are our key drivers in de-levering.
Speaker Change: quarter after quarter, year after year, and you see the impact of that through this quarter and prior quarters.
Speaker Change: On the asset sales, we will complete asset sales. You're right, real estate, we've got some that's vacant that we can sell. We've got some that we own that we occupy and could sell and lease back.
Glenn Brandt: The greatest productivity comes from selling assets that you don't need to lease back. But if there are transactions there that make sense when looking at the other, we will. But we've got time, and we're certainly not in a fire sale. You saw us pivot at the end of last year, realizing the market was softer than we had expected on asset sales, and we sold the Kojiko shares. We took advantage of an uptick in the market and brought in a significant debt reduction at the tail end of last year. That bought us some time and allowed us some leeway to not fire sale our real estate and non-core asset holdings. We are still focused on driving those sales, though. Thank you. Thanks, Mayor. Thank you, Mayor.
Speaker Change: The greatest productivity comes from selling assets that you don't need to lease back.
Speaker Change: But if there are transactions there that make sense on looking at the other, we will. But we've got time, and we're certainly not in a fire sale.
Speaker Change: You saw us pivot at the end of last year, realizing the market was softer than we had expected on the asset sales and, you know, we sold the Kojiko shares. We took advantage of an uptick in the market.
Speaker Change: and brought in some, you know, a significant.
Speaker Change: debt reduction in the tail end of last year. That bought us some time and allowed us some leeway to not fire sale our real estate and non-core asset holdings. We are still focused on driving those sales though.
Speaker Change: Thank you.
Galeen: Thanks, Mayor. Thanks, Mayor. Next question, Galeen.
Maher Yaghi: Next question, Galeen. The next question is from David Barden with Bank of America. Please go ahead. Hi, good morning. Thanks for taking the question. It's Matt sitting in for Dave this morning.
Speaker Change: The next question is from David Barden with Bank of America. Please go ahead.
Speaker Change: Hi, good morning. Thanks for taking the question. It's Matt sitting in for Dave this morning. Two, if I could, just on wireless, I wanted to just follow up on Drew's question, or the answer to it.
David Barden: Two, if I could, just on wireless, I wanted to just follow up on Drew's question or the answer to it. I know the focus has been on the Rogers brand, you know, with its improved network quality. Obviously, bundling is something that's, you know, happening more and more in the market. So given that, and we still see churn sort of ticking up, I wonder how you view that, if you view the churn as a return to normal, or we should see as this strategy continues to play out that we should see some churn benefits going forward that we should be modeling in. And then just on cable.
Speaker Change: I know the focus has been on the Rogers brand, you know, with its improved network quality. Obviously, bundling is something that's, you know, happening more and more in the market.
Speaker Change: So, you know, given that, and, you know, we still see churn sort of picking up, I wonder how you view that, if you view the churn as a return to normal, or we should see as this strategy continues.
Speaker Change: to play out that we should see some churn benefits going forward that we should be modeling in. And then just on cable...
Anthony Staffieri: You know, obviously encouraging the view of growth or returning to top line growth by year end. But should we factor in some price increases in the back half of the year? I know that there's a whole host of things, including, you know, the enterprise segment, TPIA, fixed wireless access, MDUs in the West, but, you know, in that mix, are price increases going to play a role in getting that inflection point to positive? Thanks.
Speaker Change: You know, obviously encouraging the view of growth or returning to top-line growth by year end.
Speaker Change: You know, should we factor in some price increases in the back half of the year? I know that there's a whole host of items, including, you know, the enterprise segment, GPIA, fixed wireless access,
Matt: I know that there's a whole host of items, including, you know, the enterprise segment, GPIA, fixed load access, M.D.U.'s in the West, but, you know, in that mix, are our price increases going to play a role in getting that inflection point to positive? Thanks. Thanks for the questions, Matt. We start with, on the wireless side, as you said, just filling in from the response I gave to Drew, and the impact on, on churn, longer term. If you look at the quarter and the last several quarters, there's been heightened churn. It's probably worth dissecting for you that as we focus on the Rogers brand, what we're seeing is on that brand improving churn, and as customers get on the 5G network, and we're very disciplined about 5G being only available on the Rogers brand.
Speaker Change: MDUs in the West, but you know in that mix is our price increase is going to play a role in getting that inflection point to positive? Thanks.
Anthony Staffieri: Thanks for the questions, Matt. Let me start with... on the wireless side. As you said, just filling in on the response I gave to Drew and the impact on churn longer term, if you look at the quarters over the last several quarters, there's been heightened churn. It's probably worth dissecting for you that as we focus on the Rogers brand, what we're seeing on that brand, improving churn, and as customers get on the 5G network, and we' Excuse me.
Speaker Change: Thanks for the questions, Matt. Let me start with...
Speaker Change: On the wireless side, as you said, just filling in from the response I gave to Drew.
Speaker Change: and the impact on churn longer term. If you look at the quarter in the last several quarters, there's been heightened churn.
Speaker Change: It's probably worth dissecting for you that, as we focus on the Rogers brand, what we're seeing is, on that brand,
Tony Staffieri: And in particular, as they get to, excuse me, as they get to unlimited plans in the simplicity of the billing, of uncertainty of the billing, and the performance of the network, those have been good drivers to improve churn and customer loyalty on the Rogers brand. You look to the overall combined churn. Most of that is happening in the flanker category, quite frankly. And so what we are seeing is customers moving around in that space as they are more price conscious, and we also see some customers going from postpaid to prepaid, given the similarity of the product and some of the advantages that prepaid have for them.
Anthony Staffieri: As they get to unlimited plans and the simplicity of the billing for them, and the certainty of the billing and the performance of the network, those have been good drivers to improve churn and customer loyalty on the Rogers brand. As you look at the overall combined churn, most of that is happening in the flanker category, quite frankly, and so what we are seeing is customers moving around in that space as they are more price conscious. And we also see some customers going from post-paid to prepaid, given the similarity of the product and some of the advantages that prepaid has for them.
Speaker Change: As they get to unlimited plans and the simplicity of the billing of it and certainty of the billing and the performance of the network, those have been good drivers to improve churn and customer loyalty on the Rogers brand.
Speaker Change: As you look to the overall combined churn, most of that is happening in the Flanker category, quite frankly. And so what we are seeing is customers...
Speaker Change: moving around in that space as they are more price conscious and we also see some customers going from postpaid to prepaid given the similarity of the product and some of the advantages that prepaid have for them.
Tony Staffieri: As we look to the medium term, we've said that we would expect churn levels to continue to be elevated for those reasons. Long term, as we look out beyond the next three to four quarters, our expectation is we will see churn levels likely decline, but we think it'll be some time before we enter that space. Notwithstanding that, the churn is happening against the backdrop of a continuing growing market. And so, while churn is up for the industry overall, gross ads are up significantly, and our market share in gross ads continues to be strong leading and continues to improve.
Anthony Staffieri: As we look to the medium term, we've said that we would expect churn levels to continue to be elevated for those reasons. Long term, as we look out beyond the next three to four quarters, our expectation is that we will see churn levels likely decline, but we think it will be some time before we enter that space. Notwithstanding that, the churn is happening against the backdrop of a continuing growing market, and so while churn is up for the industry overall, gross ads are up significantly, and our market share in gross ads continues to be strong, leading, and continues to improve.
Speaker Change: As we look to medium-term, we've said that we would expect churn levels to continue to be elevated for those reasons.
Speaker Change: Long-term, as we look out beyond the next three to four quarters, our expectation is we will see churn levels likely decline, but we think it'll be some time before we enter that.
Speaker Change: that space.
Speaker Change: Notwithstanding that, the churn is happening against the backdrop of a continuing growing market.
Speaker Change: And so, while churn is up for the industry overall.
Speaker Change: Gross ads are up significantly and our market share in gross ads continues to be strong, leading and continues to improve and so on a net ad basis
Tony Staffieri: And so, on a net ad basis, we see the market continuing to grow in the roughly 4.3 to 4.5% range for the year overall for the industry would be our best estimate. And within that, we expect to continue to lead on market share on net ads.
Anthony Staffieri: And so on a net ad basis, we see the market continuing to grow in the roughly 4.3 to 4.5% range for the year. Overall, for the industry, that would be our best estimate. And within that, we expect to continue to lead on market share for net ads. And then, Matt, on your question about cable returning to growth, I won't get into specifics around any marketing strategy or that. I don't want to pre-announce anything.
Speaker Change: We see the market continuing to grow in the roughly 4.3 to 4.5% range for the year. Overall, for the industry, it would be our best estimate. And within that, we expect to continue to lead on market share on net ads.
Tony Staffieri: And then, Matt, on your question on cable returning to growth, I won't get into specifics around any marketing strategy or that. I don't want to pre-announce anything, but I would say, through this quarter, we've been, you've heard me several times in my prepared comments, referred to disciplined. Part of pricing is not so much the posted price or increases or that, but being disciplined on some of the discounting that is offered. We've seen a very active market, a very competitive market. We are... I'm focused and careful on where we lean in and on where we pull back on some of that discounting, and so you see some of that through the second quarter; you'll continue to see that through the second half of the year.
Speaker Change: And then, Matt, on your question on cable returning to growth...
Speaker Change: I won't get into specifics around any marketing strategy or that. I don't want to pre-announce anything. But I would say through this quarter,
Glenn Brandt: But I would say through this quarter, you've heard me refer to discipline in my prepared comments. Part of pricing is not so much the posted price or increases or that, but being disciplined on some of the discounting that is offered. We've seen a very active market, a very competitive market, focused and careful on where we lean in and on where we pull back on some of that discounting. And so you see some of that in the second quarter; you'll continue to see some of that through the second half of the year. It's block and tackle, as opposed to any magic bullet of, let's simply charge more for services. That's great. Thank you so much.
Speaker Change: We've been you know, you've heard me several times in my prepared comments referred to disciplined
Speaker Change: Part of pricing is not so much the posted price or increases or that but being disciplined on some of the discounting
Speaker Change: that is offered. We've seen a very active market, a very competitive market. We are...
Speaker Change: focused and careful.
Speaker Change: on where we lean in.
Speaker Change: And on where we pull back on some of that discounting. And so you see some of that through the second quarter. You'll continue to see that through the second half of the year.
Matt: It's block and tackle, as opposed to any magic bullet of, let's simply charge more for services. That's great. Thank you so much. Thanks, Matt.
Speaker Change: It's block and tackle as opposed to any magic bullet of let's simply charge more for services.
Matt: Thanks, Matt. Thanks, Matt. Next question, please, Jaylene.
Speaker Change: That's great. Thank you so much.
Stephanie Price: Next question, please, Kevin. Certainly, the next question is from Stephanie Price with CIBC. Please go ahead.
Speaker Change: Thanks, Matt. Thanks, Matt. Next question, please, Galene.
Operator: Certainly. The next question is from Stephanie Price with CIBC. Please go ahead. Good morning.
Galene: Certainly. The next question is from Stephanie Price with CIBC. Please go ahead.
Stephanie Price: Good morning. I had two questions on the cable business as well. Maybe first I was hoping you could talk about the uptake you're seeing in the fixed wireless offerings and how you kind of think about that mix of fixed wireless versus TPI as you move into the 40% of the country where you don't have a wireline presence. And then the second just on cable margins, obviously very strong in the quarter and commentary was encouraging about the potential to increase that just grace, but what are the initiatives you have underway and how you think about driving margins from here.
Stephanie Price: I had two questions on the cable business as well, but maybe first, I was hoping you could talk about the uptake you're seeing in the fixed wireless offerings and how you kind of think about that mix of fixed wireless versus TPIA as you move into the 40% of the country where you don't have a wireline presence. And then second, just on cable margins, obviously very strong in the quarter, and commentary was encouraging about, you know, the potential to increase that. Just curious about what other initiatives you have underway and how you think about driving margins from here.
Stephanie Price: Good morning. I had two questions on the cable business as well. Maybe first, I was hoping you could talk about the uptake you're seeing in the fixed wireless offerings and how you kind of think about that mix of fixed wireless versus TPIA as you move into the 40% of the country where you don't have a wireline presence.
Speaker Change: And then second, just on cable margins, obviously very strong in the quarter and commentary was encouraging about, you know, the potential to increase that. Just curious about what other initiatives you have underway and how you think about driving margins from here.
Tony Staffieri: Thanks for the question, Stephanie. Since launching fixed wireless access, we launched it nationally with a focus and attempt to index towards areas where we don't have cable footprint, namely Quebec and Southwestern Ontario, certain parts of it. And we're very pleased with the success of the product; the appeal of the product consumers and businesses find it very simple to buy and get up and running literally within seconds. And so the product is doing well, not only in those markets, but nationally as well. We're finding that certain segments, including students entering Canada and new to Canada, that are still finding themselves somewhat mobile in terms of where they're going to be living.
Stephanie Price: Thanks for the question, Stephanie. Since launching Fixed Wireless Access, we've launched it nationally with a focus and attempt to index towards areas where we don't have a cable footprint, namely Quebec and southwestern Ontario, certain parts of it. And we're very pleased with the success of the product, the appeal of the product. Investors and businesses find it very simple to buy and get up and running, literally within seconds.
Speaker Change: Thanks for the question, Stephanie.
Speaker Change: Since launching Fixed Wireless Access, we launched it nationally with a focus and attempt to index towards areas where we don't have a cable footprint, namely Quebec and southwestern Ontario.
Speaker Change: certain parts of it.
Speaker Change: And we're very pleased with the success of the product, the appeal of the product. Consumers and businesses find it very simple to buy and get up and running literally within seconds.
Anthony Staffieri: And so the product is doing well, not only in those markets but nationally as well. We're finding that certain segments, including students entering Canada and new to Canada, that are still finding themselves somewhat mobile in terms of where they're going to be living, have an affinity for the product because it's convenient and it is mobile for them. And so fixed wireless access is doing well. Relative to TPIA, we just launched that.
Speaker Change: And so the product is doing well, not only in those markets.
Speaker Change: but nationally as well. We're finding that certain segments, including.
Speaker Change: students entering Canada and new to Canada.
Speaker Change: that are still finding themselves somewhat mobile in terms of where they're going to be living.
Tony Staffieri: Having an affinity to the product because it's convenient and it is mobile for them. And so fixed wireless access is doing well relative to TPI A. We just launched that. As I've talked about before, we purchased Calm Wave to give us the platform back in the fourth quarter. And we wanted to relaunch the product that would include not only Rogers Internet on TPI A, but the full suite of products that we offer. And in particular the entertainment product, Rogers Xfinity. And so it's still early days, and comparing the two is somewhat difficult, just given the different timeline.
Speaker Change: have an affinity to the product because it's convenient and it is mobile for them. And so fixed wireless access is doing well. Relative to TPIA, we just launched that.
Anthony Staffieri: As I've talked about before, we purchased ComWave to give us the platform back in the fourth quarter, and we wanted to relaunch the product that would include not only Rogers Internet on TPIA but the full suite of products that we offer, and in particular, the entertainment product, Rogers Xfinity. And so it's still early days, and comparing the two is somewhat difficult, just given the different timelines. We see a different use case for each of them, depending on the customer's needs in terms of the bandwidth that they're looking for. You know, generally within a home where there are multiple users, entertainment happening at the same time as video calls, et cetera.
Speaker Change: As I've talked about before, we purchased CommWave to give us the platform back in the fourth quarter, and we wanted to relaunch the product that would include
Speaker Change: not only Rogers' internet.
Speaker Change: on TPIA, but the full suite of products that we offer, and in particular, the entertainment product, Rogers Xfinity, and so it's still early days, and comparing the two is somewhat difficult, just given the different timeline. We see a different use case for each of them.
Tony Staffieri: We see a different use case for each of them, depending on the customer's needs in terms of bandwidth that they're looking for. Generally, within a home where there are multiple users, entertainment happening at the same time as video calls, etc. Our view right now is that TPI A would be the better solution. But as we deploy network slicing, the potential for fixed wireless access use cases continues to increase as well. So we'll offer both and we'll let the market decide, excuse me, and we'll let the market decide what fits the customer needs best.
Speaker Change: depending on the customer's needs in terms of bandwidth that they're looking for. Generally, within a home where there are multiple users, entertainment happening at the same time as video calls, etc.
Anthony Staffieri: Our view right now is that TPIA would be the better solution. But as we deploy network slicing, the potential for fixed wireless access use cases continues to increase as well. So we'll offer both, and we'll let the market decide what fits the customer needs best. And then, Stephanie, on your question about cable margins and what other initiatives we're looking at. I've been encouraged by the question given that we're one year into the post-acquisition period of Shaw, and you're asking whether or not we've filled in or still have more opportunity.
Speaker Change: Our view right now is that TPIA would be the better solution, but as we deploy network slicing, the potential for fixed wireless access use cases continues to increase as well. So we'll offer both, and we'll let the market decide.
Speaker Change: And we'll let the market decide what fits the customer needs best.
Tony Staffieri: and then Stephanie, on your question on cable margins and what other initiatives we're looking at. I'm encouraged by the question, given that we're one year into the post-acquisition of Shaw, and you're asking whether or not we've filled in or still have more opportunity. We still have more opportunity, but I'm very pleased with the progress we've made to date on integrating the people and working through the people cost side of things. But there are still some very large initiatives and large opportunities. We are still fully engaged on the systems integration, and some of the improvements that come from that are ERP systems. That work remains underway.
Speaker Change: I'm encouraged by the question given that we're one year into the...
Speaker Change: post-acquisition of Shaw.
Speaker Change: And you're asking whether or not we've filled in or still have more opportunity. We still have more opportunity, but I'm very pleased with the progress we've made to date on integrating the people and working through the people-cost side of things.
Anthony Staffieri: We still have more opportunities, but I'm very pleased with the progress we've made to date on integrating the people and working through the people-cost side of things. But there are still some very large initiatives and large opportunities. We're still fully engaged in the systems integration and some of the improvements that come from that or ERP systems; that work remains underway. That will help drive some efficiencies in the boring operations side of things, which really helps to provide customer service improvements as well as pull some cost inefficiencies out.
Speaker Change: But there are still some very large initiatives and large opportunities. We are still
Speaker Change: We are fully engaged on the systems integration and some of the improvements that come from that. Our ERP systems, that work remains underway.
Tony Staffieri: That will help drive some efficiencies in the boring operation side of things that really helps to provide customer service improvements. As well as pulling some cost efficiencies out or cost inefficiencies out. We are still working on vendor negotiations. Some of those contracts we had in place were multi-year, and we've worked through a significant portion of them, but there are still more. We are now twice the scale on the wireline side of things, and so that helps on providing future years. There's opportunities as we lean in on those contracts. We have not yet fully, we're at the start.
Speaker Change: That will help drive some efficiencies in the boring operations side of things that really helps to provide customer service improvements as well as pulling some cost inefficiencies out.
Anthony Staffieri: We are still working on vendor negotiations. Some of those contracts we had in place were multi-year, and we've worked through a significant portion of them, but there were still more. We are now twice the scale on the wireline side of things, and so that helps with providing future years opportunities as we lean in on those contracts. We're at the start. We haven't yet fully filled the wireline or fiber backhaul, replacing microwave backhaul.
Speaker Change: We are still working on vendor negotiations, some of those contracts we had in place.
Speaker Change: We're multi-year, and we've worked through a significant portion of them, but there are still more.
Speaker Change: And we are now twice the scale on the wireline side of things. And so that helps on providing future years opportunities.
Speaker Change: as we lean in on those contracts. We have not yet fully... We're at the start. We haven't yet fully filled...
Tony Staffieri: We haven't yet fully filled the wireline or fiber backhaul, replacing microwave backhaul. That's really early days. The construction is underway but lightening up on our microwave backhaul for wireless cell sites. That we will fill in over the next few years, providing opportunity for lowering microwave costs. And then finally we're really just getting started on the media content costs, and you saw and heard my earlier answer on some of those efforts with the Warner deal and going direct to studios. That is a balance between finding lower cost ways of sourcing the content as well as gearing the content delivery to customers that you know with what they actually watch rather than here's a full slate of channels, many of which never, never get tuned in.
Speaker Change: Thank you very much.
Glenn Brandt: It's really early days. The construction is underway, but we are lightening up on our microwave backhaul for our wireless cell sites, which we will fill in over the next few years, providing opportunity for lowering microwave costs. And then finally, we're really just getting started on media content costs, and you saw and heard my earlier answer on some of those efforts with the Warner deal and going direct to studios. That is a balance between finding lower-cost ways of sourcing content as well as gearing the content delivery to customers with what they actually watch rather than offering a full slate of channels, many of which never get tuned in.
Speaker Change: cell sites that we will fill in over the next few years, providing opportunity for lowering microwave costs.
Speaker Change: And then finally, we're really just getting started on the media content costs, and you saw and heard my earlier answer on some of those efforts with the Warner deal and going direct to studios.
Speaker Change: That is a balance between finding lower cost ways of sourcing the content.
Speaker Change: As well as gearing the content delivery to customers that, you know, with what they actually watch rather than...
Speaker Change: Here's a full slate of channels, many of which never get tuned in. So we still have several initiatives that we will fill in, not just over the next few quarters, but over the next few years.
Tony Staffieri: So we still have several initiatives that we will fill in not just over the next few quarters but over the next few years. Still lots of opportunities.
Glenn Brandt: So we still have several initiatives that we will fill in, not just over the next few quarters but over the next few years. Still lots of opportunities. Thank you. Thanks, Stephanie. Next question, Galeen. The next question is from Tim Casey with BMO. Please go ahead.
Stephanie Price: Thank you. Thanks, Stephanie.
Speaker Change: Still lots of opportunities. Thank you.
Tim Casey: Next question, Gary. Next question is from Tim Casey with BMO. Please go ahead. Thanks. Good morning.
Speaker Change: Thanks, Stephanie. Next question, Galeen.
Speaker Change: The next question is from Tim Casey with BMO. Please go ahead.
Tim Casey: Thanks, good morning. Tony, could you talk a little bit about the progression of what you've seen in terms of competitive pricing in the wireless market? And how you're thinking about how it's going to play out through back to school, particularly with respect to last year. I mean, obviously, there will be back to school promotional activity, but I think the market would be very interested to hear investors' take on how your take is on, um..., projections or the trajectory of pricing offers out there as we go into the seasonal period. I just have a question, Tim.
Tim Casey: Tony, could you talk a little bit about what you've seen in terms of competitive pricing in the wireless market and how you're thinking about how it's going to play out through back to school, particularly with respect to last year. I mean, obviously there will be back to school promotion activity, but I think the market would be very interested to hear that there's been very enough to hear. How what your take is on the trajectory of a pricing offers out there as we go into the seasonal period this year. I still have a question, Tim. It's always hard to predict the market dynamics.
Tim Casey: Thanks, good morning. Tony, could you talk a little bit about what you've, the progression of what you've seen in terms of competitive pricing in the wireless market?
Tim Casey: And how you're thinking about how it's going to play out through back-to-school, particularly with respect to last year. I mean, obviously there will be back-to-school promotional activity, but I think the market would be very interested to hear, investors would be very interested to hear.
Speaker Change: How, what your take is on the projection or the trajectory of pricing offers out there as we go into the seasonal period this year.
Anthony Staffieri: It's always hard to predict the market dynamics, but we have a plan of what we intend to do as we kick off the season with back to school. As I said in my earlier comments, our focus will continue to be on the Rogers brand and continue to be on bundling and a few other things that you would expect to be relevant to students and the addition of a second, third, or fourth line to the plan. And we'll work our distribution channels to effectively compete during that season. In terms of, and maybe your question is, how do we think it'll compare to last year?
Speaker Change: Thanks for the question, Tim. It's always hard to predict the market dynamics.
Tony Staffieri: We have a plan of what we intend to do as we kick off the season with back to school. As I said in my earlier comments, our focus will continue to be on the Rogers brand and continue to be on bundling and a few other things that you would expect to be relevant to students. And the addition of second, third, or fourth line to the plan. So, and we'll work our distribution channels to effectively compete during that season. In terms of, and maybe your question is, you know, how do we think it'll compare to last year?
Speaker Change: We have a plan of what we intend to do as we kick off the season with back to school.
Speaker Change: As I said in my earlier comments, our focus will continue to be on the Rogers brand, and continue to be on bundling, and a few other things that you would expect to be relevant to students.
Speaker Change: and the addition of a second, third, or fourth line to the plan. So, and we'll work our distribution channels to effectively compete during that season.
Anthony Staffieri: We had four robust competitors in the marketplace last year, and we have the same competitors in the marketplace this year. And so our expectation is that it's going to be competitive. And at least on par with last year in terms of pricing dynamics and promotional offers. We'll just have to see what the competition does, and we'll respond accordingly. But at a very macro level, our expectation is that it's probably not going to be that different from the prior year. Thanks, Tony.
Speaker Change: In terms of, and maybe your question is, you know, how do we think it'll compare to last year?
Tony Staffieri: We had four robust competitors in the marketplace last year. And we have the same competitors in the marketplace this year. And so, you know, our expectation is it's going to be competitive. And at least on par with last year in terms of pricing dynamics and promotional offers, we'll just have to see what the competition does and will respond accordingly. But at a very macro level, our expectation is, it's probably not going to be that different than the prior year.
Speaker Change: We had four robust competitors in the marketplace last year.
Speaker Change: and we have the same competitors in the marketplace this year.
Speaker Change: You know, our expectation is it's going to be competitive, and at least on par with last year in terms of pricing dynamics and promotional offers, we'll just have to see what the competition does and we'll respond accordingly.
Speaker Change: But at a very macro level, our expectation is it's probably not going to be that different than the prior year.
Anthony Staffieri: And just on the bundling environment, any changes you're seeing there with respect to competitive intensity? And maybe if you could talk a little bit about what you're seeing in Ontario with what you're seeing at West on that dynamic. Uh, it's important to point out that, You know, the bundled customer is still not the majority of customers across the entire nation, and that's true not only for us, but the industry overall.
Tony Staffieri: Thanks, Tony.
Tony Staffieri: And that's just on the bundling environment. Any changes you're seeing there with respect to cable competitive intensity. And maybe if you could talk a little bit about what you're seeing in Ontario with what you're seeing at West on that dynamic. It's important to set out that, you know, the bundle customer is still not the majority of customers across the entire nation. And that's true, not only for us, but the industry overall. And so bundling has a lot of appeal beyond just the bundle discount. But it's still frankly early days in terms of bundling. As I said, it has some convenience, and part of the appeal of fixed wireless access is you can walk out of the store with a phone as well as home internet.
Speaker Change: Thanks, Tony. And just on the bundling environment, any changes you're seeing there with respect to competitive intensity? And maybe if you could talk a little bit about what you're seeing in Ontario with what you're seeing at West on that dynamic.
Speaker Change: It's important to set out that
Speaker Change: You know, the bundled customer is still not the majority of customers across the entire nation, and that's true not only for us, but the industry overall.
Anthony Staffieri: And so bundling has a lot of appeal beyond just the bundled discount, but it's still, frankly, early days in terms of bundling. As I said, it has some convenience, and part of the appeal of fixed wireless access is that you can walk out of the store with a phone as well as home internet that's just ready to go.
Speaker Change: And so bundling has a lot of appeal.
Speaker Change: beyond just the bundled discount, but it's still frankly
Speaker Change: Early days in terms of bundling. As I said, it has some convenience and part of the appeal of fixed wireless access is you can
Speaker Change: walk out of the store with a phone as well as home internet that's just ready to go. And so it's a simple, easy process.
Tony Staffieri: That's just ready to go. And so it's a simple, easy process. But in terms of the trend we're seeing in bundling between East and West, it's about the same. I would say there's probably a bit more inertia in the West only because we haven't been able to offer the bundle product previously prior to closing Shaw. And so having an alternative out West has given us a bit of an advantage. And so we're seeing it slightly higher in the West, but longer term we expect the use case to be the same across the nation. Thank you.
Anthony Staffieri: And so it's a simple, easy process. But in terms of the trend we're seeing in bundling between East and West, it's about the same. I would say there's probably a bit more inertia in the West only because we haven't been able to offer the bundled product previously, prior to closing Shaw. And so having an alternative out West has given us a bit of an advantage.
Speaker Change: But in terms of the trend we're seeing in bundling...
Speaker Change: Between East and West, it's about the same.
Speaker Change: I would say there's probably a bit more inertia in the West only because we haven't been able to offer the bundled product previously, prior to closing Shaw.
Speaker Change: and so having an alternative out west has given us a bit of an advantage and so we're seeing it slightly higher in the west but longer term we expect the use case to be the same across the nation.
Anthony Staffieri: And so we're seeing it slightly higher in the West, but longer term, we expect the use case to be the same across the nation. Thanks, Tim. Next question, please, Galen. The next question is from Batya Levi with UBS. Please go ahead.
Batya Levi: Next question, please. and the next question is from Batya Levi with UBS. Please go ahead. Great. Thank you.
Speaker Change: Thanks, Tim. Next question, please, Kaylene.
Kaylene: The next question is from Batya Levi with UBS. Please go ahead.
Batya Levi: Great, thank you. Can you provide a little bit more color on the drivers of wireless ARPU grills going forward? Do you think that the lower mix of Flanker brand in there is still a driver? And how should we think about accounting for the Disney Plus add-on? Does that also drive better ARPU?
Batya Levi: Keep in mind a little bit more color on the drivers of wireless output growth going forward. Do you think that the low-end mix of Flannker band brand in there is still a driver? And how should we think about the county for Disney Plus and on? Does that also drive better? Thank you.
Batya Levi: Great, thank you. Can you provide a little bit more color on the drivers of wireless ARPU growth going forward? Do you think that the lower mix of Flanker brand in there is still a driver? And how should we think about accounting for Disney Plus add-on? Does that also drive better ARPU? Thank you.
Tony Staffieri: Thanks, Batya, for the question. You know, as I said earlier, our expectation is to continue to focus on not only leading market share, but leading our Google growth as well. And so there are things we focus on there. One is focusing on the Rogers brand, and base management. You know, Glenn referred to it earlier. It's basically basic blocking and tackling, looking at a customer set, and, you know, is there a value proposition relative to the plan that they're on now, and proactively outreaching the customer. So it's things like that. And so in base management, we like what we see in uptearing customers on the Rogers brand and customers on either the fight-out.
Anthony Staffieri: Thank you. Thanks, Batya, for the question. You know, as I said earlier, our expectation is to continue to focus on not only leading market share but leading ARC-II growth as well. And so there are, you know, things we focus on there. One is focusing on the Rogers brand and base management. You know, Glenn referred to it earlier; it's basic blocking and tackling of looking at a customer set and, you know, is there a value proposition relative to the plan that they're on now, and actively outreaching to the customer. So it's things like that.
Patya: Thanks, Batya, for the question.
Speaker Change: You know, as I said earlier, our expectation is to continue to focus on not only leading market share, but leading ARC-II growth as well.
Speaker Change: And so there are, you know, things we focus on there. One is focusing on the Rogers brand and base management. You know, Glenn referred to it earlier. It's basic blocking and tackling.
Glenn Brandt: of looking at a customer set and is there a value proposition relative to the plan that they're on now, proactively outreaching the customer. So it's things like that. And so in base management, we like what we see.
Anthony Staffieri: And so in base management, we like what we see in up-tiering customers on the Rogers brand and customers on either the Fido and, as I referenced earlier, on the Chatter brand and up-tiering them to the 5G network and the Rogers brand. So that's, in and of itself, the single biggest driver of continued expansion. The second area is roaming and coming up with roaming alternatives and packages that give the customer more certainty and, at the same time, gives us more consistency in that type of revenue.
Glenn Brandt: up tiering customers on the Rogers brand and customers on either the Fido and as I referenced earlier on the Chatter brand and up tiering them to the 5G network and the Rogers brand.
Tony Staffieri: And as I referenced earlier on the Chatter brand and uptearing them to the 5G network, and the Rogers brand. So that's, you know, in and of itself, the single biggest driver of continued expansion. The second area is roaming and coming up with roaming alternatives and packages that give the customer more certainty. And at the same time, gives us more consistency in that type of revenue. And so as we introduce some of those plans in market, we expect that to have a favorable impact on our coup as well.
Glenn Brandt: So that's, you know, in and of itself, the single biggest driver of continued expansion.
Glenn Brandt: The second area is roaming and...
Glenn Brandt: Coming up with...
Glenn Brandt: Roaming alternatives and packages that give the customer more certainty.
Glenn Brandt: and at the same time gives us more consistency in that type of revenue.
Anthony Staffieri: And so as we introduce some of those plans in the market, we expect that to have a favorable impact on ARCU as well. Beyond that, I really don't want to get into too many of our marketing plans for competitive reasons other than those are probably two of the items that are going to be most significant but, frankly, most basic. Got it, thank you. Thanks, Batya. Next question, Gaylene. The next question is from Jerome Dubreuil with Desjardins. Please go ahead. Hi, good morning.
Glenn Brandt: And so, as we introduce some of those plans in market...
Glenn Brandt: We expect that to have a favorable impact on on ARPU as well.
Batya Levi: Beyond that, I really don't want to get into too many of our marketing plans for competitive reasons other than, you know, most significant, but frankly, most basic. Got it. Thank you. Thanks, Vacha.
Glenn Brandt: Beyond that, I really don't want to get into too many of our marketing plans for competitive reasons other than, you know, those are probably two of the items that are going to be most significant, but frankly, most basic.
Speaker Change: Thank you.
Operator: Next question, Gary.
Speaker Change: Thanks, Batya. Next question, Galeen.
Jerome Dubreuil: The next question is from Jerome Deerl with Desjardin. Please go ahead. Hi. Good morning. Thanks for taking my questions. First one is on TPI and Quebec. You're putting emphasis on this strategic move there. Interesting, given you're relatively large coverage of the country on the fixed side of the question, and we're just ahead of the CRTC decision. So obviously, your common way of acquisition kind of hinted towards that, but if you can remind us of your regulatory view on TPI and how you see this evolve.
Speaker Change: The next question is from Jerome Dubreuil with Desjardins. Please go ahead.
Jerome Dubreuil: Thanks for taking my questions. The first one is on TPIA in Quebec. You're putting emphasis on the strategic move there. Interesting, given your relatively large coverage of the country on the fixed side of the question, and we're just ahead of the CRTC decision. So, obviously, your ComWave acquisition kind of hinted towards that, but if you can remind us of your regulatory view on TPIA and how you see this evolving. And then, secondly, on EBITDA growth regarding guidance.
Jerome Dubreuil: Hi, good morning. Thanks for taking my questions. First one is on TPI in Quebec. You're putting emphasis on the strategic move there. Interesting, given your relatively large coverage of the country on the fixed side of the question, and we're just ahead of the CRTC decision.
Speaker Change: And so obviously your common wave acquisition kind of...
Speaker Change: Hinted towards that but if you can remind us of your regulatory view on TPIA and how you see this evolve
Jerome Dubreuil: Then second question, on either the growth regarding guidance, if my math is good, we need to see a bit of an acceleration in terms of the growth versus what we've been seeing in the second quarter. If you can discuss what would be the drivers for accelerated growth in the second half versus the second quarter.
Jerome Dubreuil: If my math is right, we need to see a bit of an acceleration in terms of EBITDA growth versus what we've been seeing in the second quarter. If you could discuss what the drivers would be for accelerated EBITDA growth in the second half versus the second quarter, I'll start with the first one, Jerome.
Speaker Change: And then second question, on EBITDA growth, regarding guidance, if my math is good, we need to see a bit of an acceleration in terms of EBITDA growth versus what we've been seeing in the second quarter.
Speaker Change: If you can discuss what would be the drivers for accelerated growth in the second half versus the second quarter?
Tony Staffieri: I'll start with the first one, Jerome. In terms of our views on TPI, we've been consistent on point. We need a regulatory framework and environment that continues to encourage facilities-based investment. That's critical to having networks and growing networks across the nation. It's important to facilitate rural connectivity, and it's an agenda that we all share. And so first and foremost, having wholesale rates, if we are going to have a wholesale regime, which we do, and the government seems committed to it, then we need to ensure that the rates reflect full costs. And so that's point one, and the second point is we are going to have a wholesale regulatory regime; then it needs to be fair and consistent across all networks.
Anthony Staffieri: In terms of, you know, our views on TBIA, we've been consistent on this point. We need a regulatory framework and environment that continues to encourage facilities-based investment. That's critical to having networks and growing networks across the nation. It's important to facilitate rural connectivity, and it's an agenda that we all share.
Speaker Change: I'll start with the first one, Jerome. In terms of our views on TBIA, we've been consistent on point. We need a regulatory framework and environment that continues to encourage facilities-based investment.
Speaker Change: That's critical to having...
Speaker Change: networks and growing networks across the nation. It's important to facilitate rural connectivity and it's an agenda that we all share.
Anthony Staffieri: And so, first and foremost, wholesale rates. If we are going to have a wholesale regime, which we do, and the government seems committed to it, then we need to ensure that the rates reflect full costs. And so that's point one. And the second point is, if we are going to have a wholesale regulatory regime, then it needs to be fair and consistent across all networks. And so those are our views on that.
Speaker Change: And so first and foremost, having wholesale rates, if we are going to have a wholesale regime, which we do, and the government seems committed to it, then we need to ensure that the rates reflect full costs.
Tony Staffieri: And so those are those are our views on that. We've, you know, as I said in my earlier comments, as we look to some of the markets where we don't have homes, past customers are looking for solutions to bundle with their wireless product. And so this is an opportunity for us to expand into those markets and offer those bundled solutions.
Anthony Staffieri: We've, as I said in my earlier comments, as we look to some of the markets where we don't have homes passed, customers are looking for solutions to bundle with their wireless products. And so this is an opportunity for us to expand into those markets and offer those bundled solutions. And then on your second question, Jerome, on EBITDA growth through the first half of the year. If you take 2023, and this is true if you go back to prior years, a larger portion of our annual revenue is earned in the second half of the year.
Speaker Change: We've, you know, as I said in my earlier comments, as we look to some of the markets where we don't have homes passed, customers are looking for solutions to bundle with their wireless product, and so this is an opportunity for us to expand into those markets and offer those bundled solutions.
Tony Staffieri: And then on your second question, Jerome, on the EBITDA growth through the first half of the year, if you, you know, take 2023 and this is true, if you go back in prior years, a larger portion of our annual EBITDA is earned in the second half of the year. If you look at last year, 45% of our annual EBITDA was earned in the first half. If you factor in the fact that you one didn't include Shaw, you pull that in. It goes up by one or two points to 0.47% of the year's EBITDA earned in the first half, just over half then in the second half.
Anthony Staffieri: If you look at last year, 45% of our annual revenue was earned in the first half. If you factor in the fact that Q1 didn't include Shaw, you pull that in, it goes up by one or two points to about 47% of the year's EBITDA earned in the first half, just over half then in the second half. I expect that pattern to bear out again this year. Media is very, very strongly seasonal in the second half, and so that's part of the driver.
Speaker Change: And then on your second question, Jerome, on the EBITDA growth through the first half of the year.
Speaker Change: If you take 2023, and this is true if you go back in prior years,
Speaker Change: A larger portion of our annual levita is earned in the second half of the year. If you look at last year, 45% of our annual levita was earned in the first half.
Speaker Change: If you factor in the fact that Q1 didn't include Shaw, you pull that in, it goes up by one or two points to about 47% of the years EBITDA earned in the first half.
Tony Staffieri: I expect that pattern will, will bear out again this year. Media is very, very strongly seasonal in the second half, and so that's, you know, part of the driver. Media is not a significant part of the consolidated EBITDA; maybe in percentage terms, but almost the entire amount of EBITDA earned by media. It comes in the last four to six months of the year. The, the baseball season and the NHL season both are having second half related, and so, you know, I'm, I'm confident that, you know, we will bear out those patterns in the second half.
Speaker Change: Media is very, very strongly seasonal in the second half.
Speaker Change: and so that's, you know, part of the driver. Media is not a significant part of the consolidated EBITDA, maybe in percentage terms.
Anthony Staffieri: Media is not a significant part of the consolidated EBITDA, maybe in percentage terms, but almost the entire amount of EBITDA earned by media comes in the last four to six months of the year. The baseball season and the NHL season both are heavy second half related.
Speaker Change: But almost the entire amount of EBITDA earned by media comes in the last four to six months of the year. The baseball season and the NHL season both are heavy second half related.
Glenn Brandt: And so, you know, I'm confident that, you know, we will bear out those patterns in the second half. I'm very confident with the guidance we've given. Thank you. Thank you, Jerome. Thank you, Jerome. Gaylene, we have time for two more questions.
Speaker Change: You know, I'm confident that, you know, we will, we will bear out those patterns in the second half. I'm very confident with the guidance we've given.
Jerome Dubreuil: I'm very confident with the guidance we've given. Thank you. Thank you, Jerome.
Speaker Change: Thank you.
Operator: Thanks, Jerome. Giving, we have time for two more questions.
Jerome: Thank you, Jerome.
Speaker Change: Thanks Jerome. Gaylene, we have time for two more questions.
Aravinda Galappatthige: Thank you. Then next question. It's from our vendor, Gallup, at the K with kind of collegunity. Please go ahead.
Operator: Thank you. The next question is from Aravinda Galappatthige with Canaccord Genuity. Please go ahead.
Speaker Change: Thank you. The next question is from Aravinda Galappatthige with Canaccord Genuity. Please go ahead.
Aravinda Galappatthige: Good morning. Thanks for taking my questions. Just a clarification on the wireless service revenue growth trajectory. You know, the 3.5 percent that is possibly still going to be sort of sector leading, you know, given the competitive conditions in the market. But, you know, previously, pro forma, you were sort of well north of 5%, I suspect even north of 6%. I was perhaps going to be a little bit surprised by that trajectory sequentially.
Aravinda Galappatthige: Good morning. Thanks for taking my questions. It's a clarification on the wireless service revenue growth trajectory. You know, the 3.5% that's possibly still going to be sort of sector leading, you know, given the competitive condition in the market. But, you know, previously, the pro-former user will not have five percent; I suspect, even a lot of six percent. I was perhaps going to be a little bit surprised by that trajectory sequentially. Even if you look at the sequential numbers, Q2 seasonally anomaly gets an uptick in terms of wireless service revenues from Q1. Apart from what we already know, in terms of sort of the pricing pressures, was there any sort of item that sort of needs to be called out, whether it's roaming or other fees that that sort of played a role there.
Aravinda Galappatthige: Good morning. Thanks for taking my questions. Just a clarification on the wireless service revenue growth trajectory. You know, the 3.5 percent, that's...
Aravinda Galappatthige: possibly still going to be sort of sector leading you know given the the competitive condition in the market but you know previously pro-forma you were sort of well north of
Speaker Change: I was perhaps going to be a little bit surprised by that trajectory sequentially. Even if you look at sort of the sequential numbers, Q2 seasonally normally gets an uptick in terms of wireless service revenues from Q1. Apart from what we already know in terms of sort of the pricing pressures, was there any sort of item that sort of needs to be called out, whether it's roaming or other fees that sort of played a role there? And secondly, just a bigger picture question, longer-term cost reduction, I mean, maybe for Tony, how do you see the prospect of that?
Aravinda Galappatthige: Even if you look at sort of the sequential numbers, Q2 seasonally normally gets an uptick in terms of wireless service revenues from Q1. Apart from what we already know in terms of sort of the pricing pressures, was there any sort of item that sort of needs to be called out, whether it is roaming or other fees that sort of played a role there? And secondly, just a bigger picture question, longer-term cost reduction. I mean, maybe for Tony, how do you see the prospect of larger sort of cost rationalization in the industry when you sort of think about Gen-AI, when you think about sort of the broad opportunities in this for the telecom sector to sort of manage their margins as they sort of face tighter service revenue conditions, possibly like we see right now? Just one of your thoughts on that as well. Thank you, Aravinda.
Tony Staffieri: And secondly, just a big, a big two question, long term cost reduction. I mean, maybe for Tony, how do you see the prospect of larger sort of cost reduction in the industry when you sort of think about Jenny I, when you think about sort of the broad opportunities for the telecom sector to manage their margin. As you sort of face tighter, so this revenue conditions, possibly, like we see right now just one of your thoughts on that as well.
Anthony Staffieri: larger sort of cost rationalization in the industry when you sort of think about Gen AI, when you think about sort of the broad opportunities in this for the telecom sector to sort of manage their margins as you sort of face tighter service revenue conditions possibly.
Anthony Staffieri: like we see right now. Just wanted your thoughts on that as well. Thanks.
Glenn Brandt: On your questions around wireless revenue growth, I'm pleased with the growth we've had. We always look for more, but in a very competitive market where, you know, I think we've heard significant concerns expressed from the outside, we've held to our plan. We've held to our discipline on pricing, on price discounting, on going after market share while still protecting our margins and our revenue growth. We are lapping strong performance in the prior year and still posting good growth this year.
Speaker Change: Thank you Aravinda. On your questions around wireless revenue growth
Speaker Change: I'm... I'm...
Speaker Change: I'm pleased with the growth we've had. We always look for more, but in a very competitive market where, you know, I think we've, we heard
Speaker Change: significant concerns expressed from the outside we've held to our plan we've held to our discipline on pricing on price discounting on going after market share while still protecting our margins and our our revenue growth
Speaker Change: We are lapping strong performance in the prior year and still posting good growth this year. You're right, the 4% we posted in Q2 is down sequentially maybe from where we were in Q1 by a point.
Glenn Brandt: You're right, the 4% we posted in Q2 is down sequentially, maybe from where we were in Q1 by a point, but we've driven 4% revenue growth and 6% EBITDA growth. I wouldn't say satisfied or pleased, but those are strong results given the very competitive market that we're operating in and where we can find opportunities to upgrade customer service plans to move customers up to the premium brand. We are leaning in on those.
Speaker Change: We've driven 4% revenue growth and 6% EBITDA growth.
Speaker Change: I wouldn't say satisfied or pleased, but certainly those are strong results given the very competitive market that we're operating in.
Speaker Change: and where we can find opportunities to upgrade customer service plans, to move customers up to the premium brand.
Glenn Brandt: Data loading continues to grow by roughly 30% year-over-year, and we are looking to those trends to move customers into higher service plans, moving them into 5G service, and what have you. On roaming, those trends really have largely been fully ingested. We will look to try and find some opportunities, Tony mentioned, to make roaming more convenient for customers going forward, but I don't expect those to have a material impact on future revenue.
Speaker Change: We are leaning in on those. Data loading continues to grow by roughly 30% year-over-year. And we are, you know...
Speaker Change: Looking to those trends to move customers into higher service plans, moving them into 5G service and what have you.
Speaker Change: On roaming, those trends really have largely...
Speaker Change: been fully ingested.
Anthony Staffieri: We will look to try and find some opportunities, Tony mentioned, on making roaming more convenient for customers going forward, but I don't expect those to have a mere material impact on future revenue.
Glenn Brandt: On the, uh... Second part of your question, Aravinda, on cost reductions, do we continue to see opportunities? And the short answer is absolutely. We will continue to seek efficiency improvements, and the tools that are increasingly becoming available are gonna greatly assist. You mentioned AI. We're being very thoughtful and selective about the tools that we will, in most cases, license.
Anthony Staffieri: on the
Anthony Staffieri: The second part of your question, Aravinda, on cost reductions, do we continue to see opportunities? The short answer is absolutely. We will continue to seek efficiency improvements.
Speaker Change: The tools that are increasingly becoming available are going to greatly assist. You mentioned AI.
Speaker Change: We're being very thoughtful and selective about the tools that we will, in most cases,
Glenn Brandt: Larger players that have solutions that are ready to go, and we see that being able to take out a bit of cost, not only in our customer interactions but also in many of our back office and network operations. And those tools are already being implemented with really good early success. And the second big part of it is just transacting digitally. As an industry overall, but particularly in Canada, it's probably fair to say that it's still a significant minority of transactions that happen digitally. And we know that consumers and businesses are looking for alternatives that are easier and quicker to transact.
Speaker Change: license from larger players that have solutions that are ready to go and we see that being able to take a bit of cost
Speaker Change: Not only in our customer interactions, but also in many of our back office and network operations. And those tools are already being implemented with...
Speaker Change: with really good early success on it.
Speaker Change: And the second big part of it is just transacting digitally as an industry.
Speaker Change: Overall, but particularly in Canada, it's probably fair to say that it's still a significant minority of transactions that happen digitally, and we know that consumers and businesses are looking for alternatives that are easier and quicker.
Glenn Brandt: And so as we improve our digital capabilities, our expectation is that the customer is going to have a much better experience at a significantly lower cost. And so we'll continue to invest in those areas. And you'll see some of that in our CapEx, but also in OpEx as we license many of these platforms. But nonetheless, with that, it'll be within the CapEx envelope we have and within our goal to continue to expand margins. So continued opportunities are, for sure, Vida.
Speaker Change: to transact. And so as we improve our digital capabilities, our expectation is the customer is going to have a much better experience.
Speaker Change: at a significantly lower cost.
Speaker Change: And so, we'll continue to invest in those areas, and you'll see that, some of it in our CAPEX, but also in OPEX, as we license many of these platforms.
Speaker Change: But nonetheless, with that, it'll be within the CapEx envelope we have and within our goal to continue to expand margins. So continued opportunities for sure, Aravinda.
Arvinda: Thank you.
David McFadgen: Thanks, Arvinda, Galine. We have time for one more question. Thank you. The final question is from David McFadgen with Quarmark Security. Please go ahead. All right. Thanks. Thanks for asking me.
Glenn Brandt: Thank you. Thanks Aravinda. Gaelene, we have time for one more question.
Speaker Change: Thanks Aravinda. Galen, we have time for one more question.
Operator: Thank you. The final question is from David McFadgen with Cormark Security. Please go ahead.
Speaker Change: Thank you. The final question is from David McFadgen with Cormark Security. Please go ahead.
David McFadgen: Well, great. Thanks. Thanks for squeezing in. So, just when I look at the wireless business, your other operating costs in the quarter were down three percent year-over-year. I was just wondering if there was something unusual in the quarter or could we expect this result to continue in future quarters. And then on the cable side of the business, we saw an uptick in video losses. I was just wondering, is this a new run rate?
David McFadgen: So just want to look at the wireless business. You're either operating costs in the quarter or down three percent. You already are just wondering, is there something unusual in the quarter, or can we expect this result to continue in future quarters?
David McFadgen: Well, great. Thanks. Thanks for squeezing me in. So, just when I look at the wireless business, your other operating costs in the quarter were down three percent year over year. I was just wondering, is there something unusual in the quarter, or can we expect this
Speaker Change: And then on the cable side of the business,
Glenn Brandt: And then the cable side of the business. You know, we saw an uptick in the video losses. I was just wondering, is this a new run rate? And in your written commentary, you call that satellite losses of being a factor, which drove the cable revenue down a little bit. You don't disclose your satellite subs, so it's just wondering, is this a new, would you be able to disclose the engine on satellite loss in the quarter? And the satellite sub base at the end of Q2. Thanks. Thank you, David. On your question on wireless and other operating costs being down, we, again, it's just a general emphasis we have on finding efficiencies and driving out costs, and so I wouldn't point to any one thing other than we are looking to drive scale efficiencies in cable and just overall efficiency across the board in wireless, media, and head office cost.
Speaker Change: We saw an uptick in the video losses.
Glenn Brandt: And in your written commentary, you called out satellite losses as being a factor which drove the cable revenue down a little bit. You don't disclose your satellite subs, so I was just wondering, could you... Would you be able to disclose the magnitude of the satellite loss during the quarter and the satellite sub-base at the end of Q2? Thank you, David. On your question about wireless and other operating costs being down, again, it's just a general emphasis we have on finding efficiencies and driving out costs, and so I wouldn't point to any one thing other than we are looking to drive scale efficiencies in cable and just overall efficiencies across the board in wireless, media, and head office costs.
Speaker Change: Written commentary called out satellite losses as being a factor, which drove the cable revenue down a little bit. You don't disclose your satellite subs, so I was just wondering, can you...
Speaker Change #100: Would you be able to disclose the magnitude of the satellite loss during the quarter and the satellite sub-base at the end of Q2? Thanks.
Speaker Change #101: Thank You David on on your question on wireless and
Speaker Change #102: Other operating costs being down, we, again, it's just a general
Speaker Change #103: emphasis we have on finding efficiencies and driving out costs and so I wouldn't point to any one thing other than
Speaker Change #101: We are looking to drive scale efficiencies in cable and just overall efficiencies across the board in wireless, media, and head office costs.
Glenn Brandt: So I won't put any more granularity than that to it. And then within cable, satellite, we don't disclose specifics, but it's no secret that satellite is a mature business. If I were to put any magnitude on it, the negative 2% overall revenue decline you see in cable, a significant portion of that, an over vast, overweight portion of that is driven by satellite. And so, absent satellite, that negative 2% would have been substantially lower. And then just on that, just on the video office, I would have satellite. You know, it took up in the quarter. Is that a new run rate?
Glenn Brandt: I won't put any more granularity than that on it. And then within cable, satellite, we don't we don't disclose specifics, but it's no secret that satellite is a mature business. If I were to put any magnitude on it, the negative 2% overall revenue decline you see in cable. A significant portion of that, a vast overweight portion of that, is driven by satellite. And so, absent satellite, that negative 2% would have been substantially lower.
Speaker Change #101: The satellite, we don't we don't disclose specifics, but it's no secret that satellite is a mature business. If I were to put any any magnitude on it, the negative two percent
Speaker Change #101: Overall revenue decline you see in cable.
Speaker Change #101: A significant portion of that, a vast overweight portion of that is driven by satellite. And so, absent satellite, that negative 2% would have been substantially lower.
Glenn Brandt: And then just on that, just on the video losses... Out of satellite, you know, it ticked up in the quarter. Is that a new run rate? Just wondering about that. No, I think it's... more seasonal than any.
Speaker Change #106: And then just on that, just on the video, lots of...
Speaker Change #108: Out of satellite, you know, it ticked up in the quarter. Is that a new run rate? Just wondering about that.
Glenn Brandt: Just wondering about that. No, I think it's likely more seasonal than anything.
Speaker Change #107: No, I think I think it's
Speaker Change #104: likely more seasonal than anything.
David McFadgen: Okay. All right. Thanks. Thank you. Thanks, David, and thanks to all for joining us on our Q2 call. The IR team will be around if you have any follow-ups, and Gaylene, I'll pass it over to you to close out the call. Thank you. This concludes the question and answer session and brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. Thank you all.
David McFadgen: Okay, all right, thanks. Thank you. Thanks, David, and thanks all for joining us on our Q2 call.
Speaker Change #105: Okay. All right. Thanks.
Speaker Change #109: Thank you.
Speaker Change #109: Thanks David and thanks all for joining us on our Q2 call. The IR team will be around if you have any follow-ups and Gaylene I'll pass it over to you to close out the call.
Operator: The IR team will be around if you have any follow-ups and gaveling all past over to you to close up the call.
Operator: Thank you.
Operator: This concludes the question announced session and brings to a close today's conference call. You may disconnect your lines.
Gaylene: Thank you. This concludes the question and answer session and brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. Thank you all.
Operator: Thank you for participating, and have a pleasant day. Thank you all.
Gaylene: ?? ?? ?? ?? ??
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