Q3 2024 Quebecor Inc Earnings Call
The conference is now being recorded.
Good day, everyone. Thank you for standing by.
Speaker Change: Welcome to get back or Inc. 's financial results for the third quarter Conference call I would like to introduce it gets Tmall Chief Financial Officer of cubic Inc. Please go ahead.
Bob: Ladies and gentlemen, welcome to this tobacco or conference call. My name is Bob I'm, the CFO and joining me to discuss our financial and operating results for the third quarter of 'twenty 'twenty four is that helping at all our president and CEO.
Bob: And you want unable to attend the conference call will be able to listen to a recording by telephone or webcast access details are available on our website and the recording is available will be available until February two.
2025, as usual I want to inform you that certain statements made on the call today may be considered forward looking and we would refer you to the risk factors outlined in today's press release and reports filed by the cooperation with the regulatory authorities.
Pascal: Now I'll turn the floor to Pascal.
Pascal: Yeah.
Speaker Change: Good morning, everyone.
So I'm more than 15 years ago right.
Speaker Change: I think a huge opportunity in Quebec and across Canada.
Speaker Change: And then of course it out on a growth strategy based on wireless.
Speaker Change: First launching.
Speaker Change: M. DNO, then building our own network and further acquiring freedom mobile we have never waver in our resolve or direction, we invested wisely stay the course.
Speaker Change: Establishing ourselves not only at the solid last Inc, fourth quarter and the Canadian Telecom industry, but most importantly, as a lower price better and faster alternative to the big tree.
Speaker Change: I suppose that our strategy is paying off we continue to outperform our competitors.
Speaker Change: I am proud to report our best ever quarterly wireless loading performance.
Speaker Change: 132, net additions and a remarkable year over year performance of 352000 new lines.
Speaker Change: Collectively they don't all three of them and fifth.
Speaker Change: Now I'll have 4 million 50007 hundred total mobile active lines.
Speaker Change: A significant milestone achieved in quite a short time.
Speaker Change: Each of our three brands continued to improve its performance quarter after quarter resonating more and more with Canadians across the country.
Speaker Change: <unk> innovative and affordable products and services.
Speaker Change: <unk> created a healthy competitive environment, giving Canadians warrant choice lower prices and better experience.
Speaker Change: We will spare no efforts as we breath on with our strategy of sustainable profitable wireless market sale share growth.
Speaker Change: Before turning to our operational results I would like to comment on a few regulatory issues.
Speaker Change: First.
Speaker Change: We are happy with the CRT D. C decision on the wholesale roaming rates and rate setting approach, which will support our continued expansion through better rates that finally reflects.
Speaker Change: Current market dynamics after years of being geared towards the sole benefit of the big three.
Speaker Change: The expense.
Speaker Change: The Canadian consumers.
Speaker Change: Given that the M. B N O rates are already updated and much higher than current market rates.
Speaker Change: It is crucial not only to obtain the fair rates for all style roaming access.
Speaker Change: But also to ensure the decrease year over year following market trends.
Speaker Change: However.
Speaker Change: We were very disappointed with the CRT D. C October decision on access to fiber Internet networks.
Speaker Change: Quite honestly.
Speaker Change: We don't understand how bad was able to convince the CRT D C and the.
Speaker Change: T R. A D C listen and rule.
Speaker Change: These rates were flat the actual cost while there are multiple brands offered this service directly to customers at a cost of about 50% of the FTP T access rates.
Speaker Change: I repeat.
Speaker Change: They all have various brands retail price is about 50% of what we would need to pay to offer S. TTP services.
Speaker Change: Never was there in P. P. I E rate ruling that made so little economic sense.
Speaker Change: We have offered a decision that reflects market reality.
Speaker Change: And would have allow us to offer a much slower freedom internet prices as we have been doing with wireless services for more than 18 months.
Speaker Change: Unfortunately.
Speaker Change: The CRT C's decision will prevent us from launching our services on these networks denying Canadians better service at lower prices and we earned 60 RTC to review and adjust their rates.
Speaker Change: And they're permanent decision.
Speaker Change: I will now review our operational results starting with the Telecom segment.
Speaker Change: As we navigate our busiest season of the year.
Speaker Change: We remain focused on the value of our brands deliver to consumers.
Speaker Change: And committed to always providing the best possible experience.
Speaker Change: I would like to take this opportunity to thank all of our employees.
Speaker Change: We are actively contributing to our growth and our success.
Speaker Change: As well as our evermore satisfy and loyal customers, who recognize the true value of our products and services and appreciate our second customer experience.
Speaker Change: Speaking of customer experience.
Speaker Change: And I'm proud to report that according to a survey conducted by D. J.
Speaker Change: In August and August 15, Quebec, <unk> again.
Speaker Change: If you do it all on the telecommunications company with the best customer service.
Speaker Change: You don't always choose and buy almost twice.
Speaker Change: As many responded.
Speaker Change: As its nearest rival.
Speaker Change: And firming our status as the undisputed leader in customer service.
Speaker Change: Our long standing focus on customer experience.
Speaker Change: The company and all of our brands explain and big part of our once again stellar churn reduction this quarter for each now if you do it all.
Speaker Change: And Sid.
Speaker Change: Clearly constraining with our competitors performance.
Speaker Change: Pursuing our extent expansion plan, we made two further announcements this quarter.
Speaker Change: First.
Speaker Change: He is widen that split brand with the addition of new service areas.
Speaker Change: British Columbia, Alberta.
Speaker Change: Toby.
Speaker Change: Ontario and Quebec.
Speaker Change: Bringing the hundred percent digital universe.
Speaker Change: An additional $2 2 million in Canadian.
Speaker Change: Secondly.
Speaker Change: You do it or extend it as wireless service area did I guess busy is good in all regions and then large it service area in the Boston region.
Speaker Change: Residents of these regions can now subscribe to do it all wireless service.
Speaker Change: Always the innovative player.
Speaker Change: We do it at all.
Speaker Change: We were first to offer international roaming plans in Quebec.
Speaker Change: As also added 45, new destination, so with Canada International plan this quarter, bringing that total to 66 destination, where customers will enjoy the same worry free service when they travel.
Speaker Change: On the freedom mobile sign Gus.
Speaker Change: Customers, who choose a plan, including your own beyond starting at $45 per month.
Speaker Change: And get access to 92 destination.
Speaker Change: No extra cost.
Speaker Change: In terms of market trends this quarter.
Speaker Change: We notice that the incumbents are.
Speaker Change: Now offering everyday low prices.
Speaker Change: There are fighter brands.
Speaker Change: But we came out on the winning out of that part of it.
Speaker Change: Our performance proving that we are increasingly we are relying less on pricing alone and more on great customer service and improved network.
Speaker Change: And quite frankly.
Speaker Change: Way more enjoyable experience overall.
Speaker Change: Despite the fighters aggression.
Speaker Change: We didn't notice a decrease in promotional intensity in Q3.
Speaker Change: At the beginning of Q4.
Speaker Change: Which seems to point to more disciplined market conditions in the next quarters.
Speaker Change: With the growing success of freedom and Vince <unk>.
Speaker Change: Holiday <unk> wireless RF would decrease as expected.
Speaker Change: At $2 29 at.
Speaker Change: At $35.31.
Speaker Change: Largely attributable to the dilutive impact of fritos prepaid services and fifth.
Speaker Change: Including introductory prices, but also due to higher promotional discounts and lower overage revenues as our plan on getting Richard that the benefit of our customers.
Speaker Change: Realistically, we do not expect <unk> to grow.
Speaker Change: Until we reach a better balance between our brands.
Speaker Change: We anticipate that customers grow with largely offset the pressure on our food.
Speaker Change: In addition, we are amongst providers with the highest proportion of B Y O D Activations, which also add pressure on our approval, but Alps.
Speaker Change: Lower or lower our overall costs and improve gas levels.
Speaker Change: As proof of our rigorous execution wireless EBITDA increased by 17% this quarter.
Speaker Change: Reaching 271 million.
Speaker Change: And our EBITDA margin improved from 45% to 45% as compared to Q3 last year, despite higher branding and advertising spending to fuel the expansion our of our bread FIS as well as increases in the domestic and.
Speaker Change: No roaming fees attributable to our strategy of offering customers expanded roaming plans at affordable prices.
Speaker Change: We are of course, continuing to be very tight.
Jed: On operating expense Jed.
Jed: Generating significant reduction from our ongoing cost reductions.
Speaker Change: It is.
Speaker Change: In addition, we.
Speaker Change: We are strategically using our low cost brands is the fight valves.
Speaker Change: Sales price war.
Speaker Change: Which they are spreading across their multiple brands selling below their own declare cost.
Speaker Change: This lower cost structure.
Speaker Change: Help us to fight on price and its unique hoggard prevent digital experience is increasingly resonating with Canadian consumers boosting our performance.
Speaker Change: Younger and urban target markets.
Speaker Change: Our.
Speaker Change: Wireless marketing strategy.
Speaker Change: Our gear towards making freedom credible.
Speaker Change: You do at home and match and fifth success.
Speaker Change: Our mobile growth speak for itself and we are extremely proud of the positive impact we are adding on gideon consumers by promoting healthy competition and lowering wireless prices without compromising our customer experience.
Speaker Change: These long term strategies com with short term sacrifices as we build the foundation of our continued success of course, but we are confident that our business model of putting that.
Speaker Change: The customer first.
Speaker Change: We will always prevail.
Speaker Change: As proven by our momentum that keeps improving.
Speaker Change: Moving now to the wireline segment.
Speaker Change: We continue to see aggressive well I would say even extreme aggressiveness from bell in Quebec, with basically offering free TV.
Speaker Change: In order to get Internet net adds.
Speaker Change: We are successful in holding our ground.
Speaker Change: As shown by our low and stable churn rates.
Speaker Change: But ultimately these shortsighted tactics resolve and a significant deterioration of revenues for all industry players.
Speaker Change: And unfortunately.
Speaker Change: It looks like Val now expanding these unhealthy behaviors CDN Perry sorry to the Ontario market with our Prime Miss Prime This brand.
Speaker Change: As we responded to bell aggressive more actively this quarter.
Speaker Change: We managed to grow our internet ads by 12000.
Speaker Change: That improvement on the increase of 5000 a year ago.
Speaker Change: And without a significant impact yet from the freedom Internet.
Speaker Change: You are only using as bundling strategy for our wireless customers at this time.
Speaker Change: We also launch a fifth television in the quarter and that low and for now excluded from our TV customers numbers, but from which we expect a significant impact in 2025.
Speaker Change: Nonetheless.
Speaker Change: Our TV customer variants improve.
Speaker Change: Versus last year performance as is the case for wireline telephony.
Speaker Change: With a resilient mindset and in line with our commitment to deliver the best possible customer experience.
Speaker Change: All large helicopters.
Speaker Change: It's a brand new unified video streaming service for French speakers across the country.
Speaker Change: Created by the merger of <unk> and <unk>.
Speaker Change: Building on the success of global nickel over the past 10 years, you don't call. It a threatening its leadership in France language Entertainment.
Speaker Change: This new rebranded platform is operating an extensive catalog of more than 8500 titles with over 1800 additions coming.
Speaker Change: Coming in 2025.
Speaker Change: The platform will combine scripted content as.
Speaker Change: As well as the specialized unscripted content that make good legal and bad reputation for years.
Speaker Change: And they called US remains committed to investing in original Quebec production enhancing their discover ability and offering the best international content in France.
Speaker Change: If you could please will now be the go to platform for showcasing Quebec talent, both on screen and behind the cabinet.
Speaker Change: Turning to our media segment.
Speaker Change: CVR <unk>.
Speaker Change: At an EBITDA of $12 million in the third quarter.
Speaker Change: Before menu of $4 million unfavorable change due in good part to the broadcasting activity, which continued to suffer the repercussions of the decline in advertising revenues and to be confronted with the same major challenges that persist with the media industry.
Speaker Change: They all studios.
Speaker Change: At an EBITDA improvement of $3 million and a busy quarter with local and international production.
Speaker Change: Despite this challenging situation saving room from our reorganization initiatives announced last year are materializing.
Speaker Change: Unfortunately these savings in the last quarter were largely offset by the cost of applying the new federal digital services tax.
Speaker Change: While this 3% tax.
Speaker Change: Was originally intended to target large flooring digital companies to ensure that they contribute to our Canadian system.
Speaker Change: It is unacceptable and above all unfair that Canadian businesses after bear the significant impact of this measure.
Speaker Change: Constitute and double double tax on domestic business.
Speaker Change: Faced with this situation, which runs counter to objectives the.
Speaker Change: The government must review the application of the digital services tax to exclude <unk>.
Speaker Change: Canadian businesses.
Speaker Change: <unk> already paid our taxes in Canada.
Speaker Change: Made a significant contribution to the broadcasting system.
Speaker Change: Furthermore, in the third quarter did they all continue to all the highest market share in Quebec at 39%.
Speaker Change: A testament to the loyalty of our audiences and the quality of our content.
Speaker Change: Then you then public affairs channels LCN.
Speaker Change: Recorded a significant 0.8% growth for the period.
Speaker Change: And part of its exceptional coverage of the U S election campaign.
Speaker Change: It does maintain its position that Quebec, most watched specialty channels and even.
Speaker Change: The over the Air Channel logo from Bell media.
Speaker Change: Since the start of fall programming.
Speaker Change: Video as reached $5 4 million in Quebec or every week.
Speaker Change: 71%.
Speaker Change: The population.
Speaker Change: Video.
Speaker Change: Terry 15 of the top 30 shows in Quebec.
Speaker Change: In the third quarter of 2024.
Speaker Change: Including <unk>, which is the kinect version of masked singer.
Speaker Change: Which stopped the list with an average audience of nearly $1 6 million viewers.
Speaker Change: Finally, our sports and Entertainment Division put on major shows in the quarter, including Billy Idol and popular singer ability Islands will launch a world tour at the time you do it all in Quebec City on September 20th.
Speaker Change: With a total attendance of 19000.
Speaker Change: This show was our most successful and profitable profitable to date.
Speaker Change: I will now let.
Speaker Change: Big review, our detailed financial results.
Speaker Change: Yes <unk>.
Speaker Change: On a consolidated basis in the third quarter of 2020 for Quebec, <unk> reported revenues of $1 4 billion down one, 8% and EBITDA of $594 million down $30 million almost entirely attributable to a $26 million negative stock based compensation variants.
Speaker Change: The cash flow from operations decreased $47 million to $435 million due to higher capex investments in our networks and our expansion.
Speaker Change: But free cash flow provided by operating activities increased $50 million or 10, 1% to $546 million.
Speaker Change: Due to lower interest costs and a continued disciplined cash management.
Speaker Change: In our telecom segment total revenues decreased by $26 9 million or two 2%, mainly due to the lower wireline services and equipment revenues as we made two significant decisions of first switching our helix boxes from a purchase to a rental model in the second quarter and secondly, deciding.
Speaker Change: To forgo most of our annual price increases at the beginning of the year.
Speaker Change: Knowing well that we would continue to face and then disciplined competitor in Quebec.
Speaker Change: Cost control and synergies from the integration of freedom mobile helped minimize the impact on our adjusted EBITDA, which decreased only slightly by $3 $6 million or 6%.
Speaker Change: Wireless revenues increased by 5% to $600 million in the quarter and wireless EBITDA reached $271 million, a 17% increase wireless EBITDA margin improved from 40% to 45% compared to Q3 last year.
Speaker Change: Telecom Capex, excluding the acquisition of spectrum licenses are up $13 million in the quarter, reflecting our increased investments in our networks.
Speaker Change: We invest more and <unk> network expansions, new revenue growth opportunities as well as in the rental of wireline devices as I mentioned earlier with significant synergies between the companies such as in Ottawa For example, where we have dismantled one network and yet generated significant ongoing capex savings.
Speaker Change: Telecom adjusted cash flows from operations, thus decrease due to the Capex increase.
Speaker Change: <unk> by $16 $7 million.
Speaker Change: Our media segment reported revenues of $155 million, a 7% decrease in EBITDA of $15 million of $6 million decreased compared to the same quarter last year sports and entertainment segment revenues increased by 7% to $64 million and EBITDA was slightly down to $12 million.
Speaker Change: $12 million in the quarter.
Speaker Change: <unk> reported a net income attributable to shareholders of $189 million in the quarter or <unk> 81 per share compared to a net income of 209 million or <unk> 91 per share reported last year.
Speaker Change: Adjusted income from operating activities, excluding as usual unusual items and losses on valuation of financial instruments came in at $192 million or <unk> 82 per share compared to $202 million or <unk> 88 per share in the same quarter last year.
Speaker Change: For the first nine months of the year, so that quarters revenues were up 5% to $4 1 billion and EBITDA is up 6% to $1 8 billion.
Speaker Change: EBITDA from our Telecom segment grew 6% to $1 $8 billion for the same period, an improvement of $98 million over last year.
Speaker Change: As at the end of the quarter <unk> net debt to EBITDA ratio stood at 336 times still the lowest of all telecom competitors with wireline and wireless services.
Speaker Change: I would also point out that we are the only telecom company in Canada to continue to regularly reduce our debt and strengthened our balance sheet, thanks to a steady and disciplined cash flow generation capabilities.
Speaker Change: Water after quarter, even after purchasing and canceling this quarter one 260000.
Speaker Change: Class B shares for an investment of $40 million.
Speaker Change: We intend to continue to delever over the next quarters and operate in the low threes as we have stated before.
Speaker Change: I would also like to highlight the success of our recent refinancing where videotron and issued 700 U S dollars $700 million of senior notes and the U S investment grade market, yielding five 1% on a fully hedged basis.
Speaker Change: The proceeds will be used to repay existing videotron indebtedness, including the first tranche of the term loan drawings under a videotron spread that agreement maturing on October 30 of next year and the redemption of Videotron Spike 75% senior notes that were maturing on January 15th 2026.
Speaker Change: Available liquidity of more than $2 3 billion at the end of the third quarter and our growing free cash flows will allow us to continue to improve our very strong balance sheet.
Speaker Change: So far this year. So during the first nine months of the year, we purchased and canceled $2 2 million class B shares for a total investment of <unk>.
Speaker Change: $69 million.
Speaker Change: We thank you for your attention and we'll now open the lines for your questions.
Speaker Change: For people on the line, if you'd like to queue up to ask a question. Please dial star one on your phone's keypad.
Speaker Change: The first question is from Joel <unk> from <unk>. Please go ahead gentlemen.
Speaker Change: We now see Basel tomorrow, Thanks for taking my questions.
Speaker Change: Looking for for your thoughts on the industry in general and it looks like like some peers are.
Speaker Change: May be feeling the need to do something here in terms of change of strategy. Do you also feel that need to do something or maybe theres something is already done with our with the freedom acquisition from from last year.
Speaker Change: Yeah.
Speaker Change: Excuse me at all.
Speaker Change: No while we do not intend to change course, as I said you know.
Speaker Change: I in my speech.
Speaker Change: We are still.
Speaker Change: And the same direction, making sure that you know the acquisition, we made with three of them.
Speaker Change: And our and large footprint.
Speaker Change: Continue.
Speaker Change: We look forward to trying to assemble as efficiently as possible bundling.
Speaker Change: We have been stopped and are referred to the us.
Speaker Change: Cit's decision on SDP access.
Speaker Change: We will continue to work hard to try to convince the cit's seen this.
Speaker Change: This decision does it make sense when we are able to see and it's quite obvious that the prices offered by bell in the marketplace you know when they are offering.
Speaker Change: What's the cost the price for one gig.
Speaker Change: And Ontario, right now.
Speaker Change: Yeah.
Speaker Change: No.
Speaker Change: $1.
Speaker Change: At the retail price and cost.
Speaker Change: <unk> grew by to by the Cit's hits, it's $69 without the CBD.
Speaker Change: So.
Speaker Change: I guess that you know.
Speaker Change: This seems to be so obvious and we look forward to be able to work.
Speaker Change: For our bundled and then therefore, increasing our capacity to get more revenues out of our customers because they would have experience the quality of our network and the quality of our customer experience.
Speaker Change: Okay. Thank you second question for me is.
Speaker Change: You spoke about you know.
Speaker Change: Potential stabilization of wireless ARPA in the future once.
Speaker Change: Once you get where you want to be in terms of a share of your total wireless subscriber base across our different brands would you mind sharing what is the <unk> direction.
Speaker Change: For the different brands that are that you have right now.
Speaker Change: Well you know why we would.
Speaker Change: Again repeat that.
Speaker Change: It always has been always you know what our premium brand.
Speaker Change: This is certainly you know we've been able to get our market share with that timeframe that we've been able to establish it. It didn't came in six months it came.
Speaker Change: On a 10 year basis.
Speaker Change: And this is why.
Speaker Change: The market.
Speaker Change: Create new brands at the beginning.
Speaker Change: Was a flanker brands and now their fighter brands.
Speaker Change: And therefore, we I guess that we didn't have any other choices.
Speaker Change: To follow this trend other than you know.
Speaker Change: Being better and this trend by offering 100% digital universe, which fit very well in a certain segment of the population on top of which the prices are quite competitive with what we're seeing in the marketplace with.
Speaker Change: First was flankers and today as fighters.
Speaker Change: Yes.
Speaker Change: Alright, thank you.
Speaker Change: The next question is from Mayer Yaghi from Scotiabank. Please go ahead.
Speaker Change: Joe.
Joe: So the first one I have is that it.
Speaker Change: Related to <unk>.
Speaker Change: In our prepared remarks guest count and just your answer here to Sharon's question.
Speaker Change: Ah you're arguing that.
Speaker Change: Wireless roaming rates and also.
Speaker Change: Broadband rates should be linked should be should decline and be linked to the declining market prices in the market in the market.
Speaker Change: But the CRT Sia has for a long time linked tariffs and rates to the cost to serve and not necessarily to market prices, which in wireless are being driven down by yourself and true freedom.
Speaker Change: So are you, arguing that the CRT cease should move away from its cost plus methodology and moved to a retail minus approach.
Speaker Change: Because that would be a big change that you are proposing and second one I have is.
Speaker Change: Related to our.
Speaker Change: Wireless you had great performance in terms of floating definitely in the quarter, great success, and you're taking a lot of market share from incumbents, especially looks like from BCE.
Speaker Change: You indicated that you will stand Pat on on on your pricing strategy. The question I have is.
Speaker Change: How should we think about revenue growth in wireless in the coming quarters.
Speaker Change: As you keep that pricing strategy in place because obviously, we might see a peak in terms of subscriber growth, but so I'm I'm I'm kind of trying to figure out how we should think about our pool.
Speaker Change: Growth in the coming quarters as you keep that pricing strategy. Thank you.
Matt: Thank you Matt.
Speaker Change: First of all you know obviously, we're not the ones that will make rules.
Speaker Change: The ITC, but something we know is certainly you know.
Speaker Change: First the assumption that you're using you know what you referred to costs.
Speaker Change: I'm not an accountant.
Speaker Change: Im not a financial expert.
Speaker Change: And then listening to you.
Speaker Change: Our colleagues.
Speaker Change: Looking at the way that sometimes our competitors described their cost.
Speaker Change: What do you include in your costs. This is real.
Speaker Change: Real question, and I guess that somewhere.
Speaker Change: Sure.
Speaker Change: Probably you know as of today, we're not good enough.
Speaker Change: To convince the CIBC under accounting perspective that.
Speaker Change: Those costs.
Speaker Change: Are not the one that reflects the reality and the reality is that you know there are selling one game gap.
Speaker Change: At 49 are at 59.
Speaker Change: They are asking us to pay 69.
Speaker Change: Again.
Speaker Change: We have been.
Speaker Change: You've been following the industry for many years.
Speaker Change: We have been looking also at what took place with the T. P. I E.
Speaker Change: Prices or regulated.
Speaker Change: Prices by the city's seen it went from north to South and then establish and in the middle of the road.
Speaker Change: Which is the rates that are actually.
Speaker Change: One applicable.
Speaker Change: The funny thing is that you know those.
Speaker Change: TPI as well.
Speaker Change: Were bought by by our competitors they bought all of them.
Speaker Change: And you know what.
Speaker Change: They are doing and using it now to sell.
Speaker Change: One day at a price of $59.
Speaker Change: Which is quite surprising so you know what was the logic behind all of this will be well.
Speaker Change: Well be well they before again, you'll note that make a write off in the near future.
Speaker Change: Because we don't see the value of <unk>.
Speaker Change: <unk> a company when you don't have the value of it anymore.
Speaker Change: So yes, we're.
Speaker Change: We are applying we're applying right now PPI a price is when we are offering bundles and this is why again I referred to in my prepared remarks that is something that we are using to get.
Speaker Change: Some wireless customers.
Speaker Change: We would like to add additional services like TV, we see television as also a growth segment. Then therefore, while we're getting you know wireless customers, we have the capacity down the road to improve our revenue.
Speaker Change: Men and a remark.
Speaker Change: So I guess that that I'm answering a little bit.
Speaker Change: Both of your question and maybe.
Speaker Change: It will have a few maybe one or two things to add yes.
Speaker Change: Yes, just on your.
Matt: Loading versus our view second question, Matt you know.
Matt: I think one thing.
Matt: We you know.
Speaker Change: We're starting to resent here to be quite often I used to be quite honest. We obviously, we've been transparent with us and since the acquisition of freedom, We always said that we.
Speaker Change: We were gonna there was an opportunity for us to disrupt the market that was.
Speaker Change: Inefficient and that was offering prices that were higher than the U S and the higher than in the industrialized world for Telecom services now that being said.
Speaker Change: I would point, you and your colleagues as well.
Speaker Change: Two what the incumbents are doing and they're not doing it through their main brands as you know they're doing it through their fighter brands. So it's a little bit annoying to be called the aggressor in English, Canada, when you and I really I really urge you may have to go on their own there are various websites you know and I'm going to throw a few.
Speaker Change: Or is that you. If you go to chatter you know you'll see that chatter has 50 gigs for 35 or $34. This morning.
Speaker Change: Yeah, Yeah, Yeah, right now that last week another right now.
Speaker Change: For $34 with a months free.
Speaker Change: We're at we're at $35 for 50 gig get freedom, Okay. Lucky, let's look at Lucky Lucky you get 15 gigs for $29 a month well, we have 10 gigs for $29 a month that are at freedom. Okay. Let's go see public what's probably doing 20 gigs for $30.
Speaker Change: That same argument right and this is for this is for wireless for wireline. Okay. So lets you know.
Speaker Change: That's that's even look at it.
Speaker Change: What bell doing if you look at the distributable or prime missed.
Speaker Change: You look that Youll see that they have 500 megabits for $44 95, a month in Ontario.
Speaker Change: And also this is what we were saying in our prepared remarks that this this war this aggression in Quebec, which by the way if I may be sold though is that we did not launch the price war in Quebec.
Speaker Change: We never end and Youll remember mile that for a few quarters, we didn't even respond and we lost market share and we lost net out we were negative net adds and internet for a few quarters and yes. This quarter, we responded more in kind.
Speaker Change: But we never launched this war and we and we never we still believe that this is a.
Speaker Change: They are at the at the level of maturity of the market in Quebec. It is.
Speaker Change: It is not right and it is not business. It is it's a very tricky from a business standpoint.
Speaker Change: To do what Bell is doing because I think it's hurting the entire the entire business in Quebec, and now that we see that theyre going to Ontario.
Speaker Change: I think I'd be a little bit worried about the wireline business in Ontario, and in the rest of Canada. As I said, if price is offering 500 megabits of 44 and distributors is offering a gig for 69.
Speaker Change: And I think.
Speaker Change: I think we can all agree that the.
Speaker Change: The industry would benefit from improved pricing that's for sure.
Speaker Change: But maybe maybe if we can just think about you know I I'm trying to understand how your RFP is might look like in the coming quarters. If you can just help us understand where are you in that and that cycles are unknown on the wireless ARPA.
Speaker Change: Well it all depends I mean, I can't answer that it depends it depends how it is.
Speaker Change: This is price Mark continues continues or not or as people become a little bit more reasonable. We said that our remarks, you will remember that we you know we were very very disciplined and I'm I'm sure you would agree with that for the back to our back to school offers and we have been so far everything we've launched for or that we've put out for.
Speaker Change: For Black Cat for Black Friday is also I'm sure you will agree quite disciplined now we can't speak for our for our competitors I mean, if they go crazy again, though I think continue to go crazy in Quebec.
Speaker Change: Then I'm not sure where our view is going to end up but you.
Speaker Change: You know I think we're what we're doing our share and now I think the ball is in there is or isn't the incumbent sport.
Speaker Change: And back to you now and say Oh man.
Speaker Change: Question and you know what.
Speaker Change: What you referred also my I guess that you know you should repeat that we're staying the course and we said at the beginning when freedom acquisition to in ways that we.
Speaker Change: We intend to gain market share and it is true that you know our sense.
Speaker Change: Since the assets that we require specialty than network.
Speaker Change: Was not at the level that you know we wouldn't compare this network when we do at home because things do economy, we've been investing for the last 10 years. In fact, we're doing what is necessary and we're seeing as of today that our network is improving our customers' experience is proving but without having.
Speaker Change: Yeah.
Speaker Change: Competitive environment, we don't think that we'll be able to get our market share growing.
Speaker Change: We intend to stay in the air and we're not changing at all.
Speaker Change: Our our direction, we're not yeah, we're not going to buy any telecom company in the U S and we will continue to grow.
Speaker Change: Where we've been able to grow successfully for the last few years.
Speaker Change: Thank you.
Speaker Change: Thank you for your answers.
Speaker Change: Alright, thank you.
Speaker Change: Hello, operator.
Speaker Change: The next question is from Aaron Vanda Gaelic Pat forgave from Canaccord Genuity. Please go ahead.
Speaker Change: Good morning, Thanks for taking my questions.
Speaker Change: Two main questions from me first of all maybe Hugh just on the day.
Speaker Change: The swing due to the stock based comp I know that kind of created some.
Speaker Change: Variance to expectations and I know in the past you've had you know.
Speaker Change: Meaningful variations because of stock based comp was there anything unusual about this 180 set of changes in valuation and so forth I just wanted to get some clarity on that and secondly, I guess the more important question on wireless loading I just wanted to get some comments around the quality of loading here I know we've seen.
Speaker Change: Some of the incumbents that have reported a bigger swing towards prepaid.
Speaker Change: And also related to that maybe you could comment on.
Speaker Change: Any changes to your cost of acquisition on the wireless side that showed up in Q3.
Speaker Change: Thank you.
Speaker Change: Thanks Arlinda them on your first question, yes, the stock based compensation.
Speaker Change: Swing is due to a to a very simple I mean, the two things.
Speaker Change: Mostly two.
Speaker Change: Our has talked about our stock price variation, which whereas as you compare your as we compare ourselves to last quarter to the third quarter of last year our.
Speaker Change: Our stock in the quarter had dropped by $3 $5 and this quarter. It actually increased by six six and a half dollar so theres, a $10 swing quarter to quarter.
Speaker Change: And and that's the biggest swing that we've that we've seen for well ever I think but.
Speaker Change: At least for for many years and we also have I have to point out of course, we also had issued more option based compensation. So so the two the two.
Speaker Change: To make up the difference.
Speaker Change: Hum.
Speaker Change: The wireless folding in the quality of the loading.
Speaker Change: I you know first.
Speaker Change: We're also seeing some prepaid of course in the case of fears is continuing to perform very well so that I suppose it could be considered prepay, but in our mind, whether its postpaid or prepaid that is it.
Speaker Change: Prepaid that is.
Speaker Change: When you call that an authorized payment for example, sorry autopay. So if you're if you have auto pay on your.
Speaker Change: On your prepaid.
Speaker Change: How different is it from a postpaid bring your own device for example.
Speaker Change: And so I think I would point you more towards R. Chop.
Speaker Change: Charles that's coming down and all of our and all of our brands, which I think as to the quality I think it does point to the quality of our loan of our loading as we are keeping these customers are much longer and and and we are.
Speaker Change: We're improving every single brands on that front.
Speaker Change: Thank you and just a just one small clarification on a previous comment.
Speaker Change: I think you've mentioned at $3 $6 million decline in EBITDA was 0.6% were you referring to the was that the I'm not sure. If I heard you correctly was that the cable component that you are.
Speaker Change: Giving a disclosure on.
Speaker Change: No that was the the telecom segment.
Speaker Change: Overall, okay, okay, Okay awesome.
Speaker Change: Great. Thanks, it's not.
Speaker Change: That Quebec or consolidated but it's it's.
Speaker Change: The telecom segment, so, it's videotron freedom and fifth basically.
Speaker Change: Okay, Alright, Thank you I'll pass the line.
Speaker Change: No no, but where were pointing out it's an important point because we were pointing out we're pointing out that with the revenue declines in the wireline, but we were able to lower operating costs significantly and more synergies from freedom.
Speaker Change: Our continuing to come in which basically allowed us to have a flat EBITDA I mean, $3 6 million or almost flat EBITDA for the quarter and in the telecom side.
Speaker Change: Alright. The next question is from Matthew Griffiths from Bank of America. Please go ahead Matthew.
Matthew Griffiths: Oh, great. Thanks for taking the question.
Matthew Griffiths: So I was obviously you know after the freedom acquisition.
Matthew Griffiths: The market that freedom kind of goes after it does goes after is more of the value segment of the market and since competition is obviously you know really escalated in that segment I'm, perhaps one could argue like the opportunity is going to be spread across more players.
Speaker Change: And so I was wondering if you get your thoughts on the need.
Speaker Change: For you guys, perhaps to look at a you know.
Speaker Change: Our premium offering perhaps investing more in the network.
Speaker Change: And have hit more in different segments to generate.
Speaker Change: Greater long term growth and greater profitability, and perhaps give customers somewhere to migrate to the obviously the incumbents have the ability to load on prepaid and then migrate them up when appropriate.
Speaker Change: So a premium brand.
Speaker Change: And that's maybe not available so just your thoughts on that and the Capex implications.
Speaker Change: Well, thank you Matthew and I guess that this is a very interesting question and as you can imagine certainly.
Speaker Change: Marketing perspective.
Speaker Change: I'm not sure it's going to be a good idea.
Speaker Change: Sure.
Speaker Change: With the public and with our competitors.
Speaker Change: Again, you know I would say that where were coming from where we were and yeah. All freedom was was.
Speaker Change: Different than the premium brands, our freedom that had been there for 30 years like Rogers Bell in Dallas.
Speaker Change: Yeah.
Speaker Change: Three of them was there for 10 years are a little bit more.
Speaker Change: Went through different life cycle, I would say no sick for awhile back L. P. M and now certainly you know on solid ground to grow.
Speaker Change: <unk>.
Speaker Change: So, but it's not only brenna, it's the network, we acquired and the network, we intend to continue to invest.
Speaker Change: And then therefore, what we would be able to do with the network.
Speaker Change: <unk>, certainly something that will open up opportunities in the future.
Speaker Change: It's certainly again.
Speaker Change: Not a good idea that we shared this with the public but we can easily say that the assets that we're building on.
Speaker Change: Would certainly give us a springboard for the future.
Speaker Change: So can I just follow up on that.
Speaker Change: It sounds like you kind of recognize the need to invest more in the network and there was a small increase year over year in Capex, perhaps explained by.
Speaker Change: The eastern Quebec kind of rural network expansion that was talked about and perhaps expanding <unk> reach to new areas at west.
Speaker Change: But to what extent do you think it's sustainable.
Speaker Change: To run at the very kind of low capital intensity levels that you're currently at I mean is there a fear that you end up in a situation where the network quality gap you know.
Speaker Change: It just widens and then the need to go and rely on lower and lower Arps, who increases.
Matthew Griffiths: Well Matthew I.
Matthew Griffiths: I would tell you.
Speaker Change: Don't think that we should use.
Speaker Change: We should conclude you know on an equation.
Speaker Change: Between the efficiency of the network and the amount of capital expenditure that Youre doing.
Speaker Change: You can you have the right and we consider that we have the obligation to spend wisely.
Speaker Change: The spend at the right place with the right technology.
Speaker Change: To make sure that you know there is no.
Speaker Change: No.
Speaker Change: These aren't good.
Speaker Change: The overlaps overlaps.
Speaker Change: Uh huh.
Speaker Change: That.
Speaker Change: We're making the best out of our procurement Department.
Speaker Change: We're running our operation tightly.
Speaker Change: And this is what we've been able to achieve.
Speaker Change: And I would say that never.
Speaker Change: Never say never but for the last 20 years, when we started operating them to do at home Yeah, We did something.
Speaker Change: Very well in this position.
Speaker Change: There is no reason why we should change.
Speaker Change: And starts in spoiling money so.
Speaker Change: So we have the capacity of improving our net word out.
Speaker Change: A.
Speaker Change: Decent and reasonable costs.
Speaker Change: I don't think that we need to spend more money inefficiently and we will stay the course, we know that nothing is going to take place in the quarter, but since we acquired the asset and the company we have been improving and we know that because we have the capacity to do one soon.
Speaker Change: Supervise our network, we thought while other problems, we know what can be fixed and there is there is opportunity in the future to reduce the cost of operating the business because when you're expanding your network that you have you run the possibility that the possibility you run the.
Speaker Change: Capacity to reduce your operating expenses.
Speaker Change: So this is what we did and it's not that it's.
Speaker Change: It's not something original we did it and get back yeah. We just do it all because obviously as you can imagine the network that we are now running on was not build in a weekend in the month or in a year. It was built you know in 10 to 15 years and it still continued to be built with the new technologies.
Speaker Change: We're implementing LTE advance or five GE, <unk> and all that stuff.
Speaker Change: We were able to reach this level without spoiling our money in our capital expenditure were reasonable and if we have a better ratio than the incumbent as well you know what we're proud of it.
Speaker Change: Alright, Thank you for your answer.
Speaker Change: Alright, thank you.
Speaker Change: The next question is from drew Mcnitt drew Mcreynolds from RBC. Please go ahead drew.
Drew Mcreynolds: Yeah. Thanks, Thanks, very much good morning.
Speaker Change: Three for me Hugh.
Speaker Change: Just starting off or are you able to just give us what postpaid and prepaid churn was in Q3.
Speaker Change: Obviously, you continue to say it's down.
Speaker Change: Are you able to get that.
Drew Mcreynolds: Second just in terms of Internet <unk>, clearly shifting a little balance on the growth and profitability front as Q3 more indicative of what you want to achieve going forward.
Drew Mcreynolds: Then lastly, obviously.
Drew Mcreynolds: Very good wireless loading you know 350000 on a trailing 12 month basis is that actually are you gaining market share when you look at the.
Speaker Change: The overall market and I guess the real.
Speaker Change: Apples to apples would be.
Speaker Change: Within your footprint.
Speaker Change: Which presumably is not as big.
Speaker Change: As each of the national operators. Thank you.
Speaker Change: On the on your first question on churn that we.
Speaker Change: We we haven't yet we haven't given out the churn, but we did say that it was it was lowered in all of our brands.
Speaker Change: And I can I can directionally tell you that we're.
Speaker Change: And videotron.
Speaker Change: We are just about you know on a monthly basis, we're just about at <unk>.
Speaker Change: Slightly higher than the 1% Mark.
Speaker Change: And with freedom being a freedom and fifth being slightly higher.
Speaker Change: But certainly in the in the one 5% kind of range.
Speaker Change: And that's and that's also when I'm looking at you know that that's going from from very much higher than that last year. When we were talking about freedom being in the high twos.
Speaker Change: And and even even just being in.
Speaker Change: In the in the high ones or around 2%.
Speaker Change: Yes, yes, yes.
Speaker Change: No. Thanks, Thanks for that here again I'm just do you have a couple of questions.
Speaker Change: Your second question was on Q3, right, whether Q3 was reflective of how we see things going.
Speaker Change: I think if you ever.
Speaker Change: Yes, yes, more and more on the cable in particular, the Internet side, obviously, you did much better on kind of loading and there's probably a seasonal kind of kick back moving season, but there's still some <unk> pressure there just as you balance growth and profitability on that part of your business are you kind of pleased with Q3.
Speaker Change:
Speaker Change: Please note we are not pleased because again as we've said very clearly we think that that balance of aggression and in cable or in wireline in Quebec is unwarranted and is to be honest blatantly stupid for for everyone.
Speaker Change: But that being said.
Speaker Change: One thing in terms of revenues going forward.
Speaker Change: Point to the fact that as we said in our remarks, you know part of that but.
Speaker Change: Part of the explanation for most of the explanation actually for the lower revenues has to do with us not making annual an annual increase for Internet and cable at the beginning of the year and we have im sure Youre aware that we have we've change our tune on this and starting in December there will be an annual increase being put in.
Speaker Change: So for 2025.
Speaker Change: Most of that differential should be should be covered by that there should be made up by that.
Speaker Change: Alright, and then the last one was just on within kind of your Pops covered given kind of your loading a 350 on wireless over the last 12 months.
Speaker Change: Or are you. The data you have are you gaining share within kind of what we've seen with the broader market.
Speaker Change:
Speaker Change: And our as you know our coverage area tends to be quite urban Oh on the freedom side and we are in deep market, we're seeing very high I'm not going to throw numbers at you because they haven't been vetted, but we're certainly looking at you know.
Speaker Change: I mean, we're at West we're probably starting at the 10% kind of position and we are now more than you know if not double that are not very far from that in certain areas like the greater Toronto area for example.
Speaker Change: <unk>.
Speaker Change: The other big cities, such as Calgary and Vancouver.
Speaker Change: Okay. Thanks for that appreciate it.
Drew Mcreynolds: Thanks drew.
Speaker Change: Alright.
Speaker Change: Next question is from David with fashion from our CT X Security. Please go ahead David.
David: Oh, great. Thank you.
David: A couple of questions I guess.
Speaker Change: Go one by one so when we look at the <unk>.
Speaker Change: On Telecom EBITDA and then when you factor in that.
Speaker Change: Wireless EBITDA growth that you talked about 70% and obviously implies a low double digit decline on the wireline EBITDA. So I was just wondering what can be done to improve that decline and it's just purely or mainly a function of the pricing environment out there and the competitiveness in the market.
Speaker Change: Well [laughter] David.
Speaker Change: It's an interesting question.
Speaker Change: You know on one side, obviously, you know if you were to reduce their prices you will get more more loading and on the other side. If you want to add we are floating and increase their prices. So [laughter].
Speaker Change: Again this is something that we were not sure when our competitors to this conference call, but I'm not I'm not going to say is it's an automatic or its mathematical.
Speaker Change: There is certainly a break relation between loading and prices that you're offering.
Speaker Change: So and we said many times.
Speaker Change: I guess that maybe the additional information that we can have the ear is a question of balance I mean the whole.
Speaker Change: Are we doing what is necessary to keep our.
Speaker Change: Absolute number of customers or we would like to protect our margins.
Speaker Change: Yeah.
Speaker Change: Bye.
Speaker Change: Not following all of those things that's taking place in the marketplace.
Speaker Change: So again, it's a matter of balance and it will it will depend on a day to day basis, you know what we're what we're reading from from their market something we know and this is something that obviously, we are emphasizing on true.
Speaker Change: Our call centers through our marketing and advertising strategy is that customer experience.
Speaker Change: Yes.
Speaker Change: Comparable to our competitors and we try to do enhance and again to emphasize as much as possible on it is this you know on Penetrable.
Speaker Change: Let's see.
Speaker Change: Not completely but it is certainly an asset that we have been building through all those decades.
Speaker Change: For which were very brough and four of which were doing not too bad.
Speaker Change: When we compare with the number that we saw in the U S.
Speaker Change: Gas last week, I mean, we compare IV favorably.
Speaker Change: And again it.
Speaker Change: It's a matter of making sure that we have a balance of <unk>.
Speaker Change: Loading and and Mark and we will continue to be driven by those those pieces of the equation.
Speaker Change: Okay cause this kind of wireless business.
Speaker Change: You can come in basically discontinuing the prepaid on their primary brands.
Speaker Change: They're just gonna funding on their flankers. So I was just wondering what are your plans as it if you can share them for your prepaid business.
Speaker Change: Oh, yes, I get that.
Speaker Change: Answer I answered to that you know we are.
Speaker Change: Maybe we should consider that.
Speaker Change: Been educated that way that there's a big difference between prepaid and postpaid from our competitor perspective, but.
Speaker Change: We're not seeing this the same way.
Speaker Change: Because again.
Speaker Change: Our digital 100% that brand, which is the one that we've been driving with theirs and it's.
Speaker Change: It's it's.
Speaker Change: It's prepaid and all that means I mean.
Speaker Change: You have the money in your bank account and if you want to subscribe.
Speaker Change: I need to go on the website and do it yourself.
Speaker Change: Since our prices are competitive.
Speaker Change: But I mean, and you can easily understand that if we were to lower rice.
Speaker Change: Our fifth customer will know will know right away and that they'll come in they'll come along on the website because both on coal there are probably more educated customer than others and then the.
Speaker Change: They will reprice their service.
Speaker Change: Obviously as you can imagine this is why we need to be prudent.
Speaker Change: Again. This is why we have a perspective a balance between loading in pricing.
Speaker Change: Okay and then just the last question is.
Speaker Change: Can you give us an update on capex for this year and sort of an outlook for next year.
Speaker Change: Yes, we're still on track David for the guidance was.
Speaker Change: Given your guidance for 2020 for about 600, maybe a little bit higher than that I think we're on track with that.
Speaker Change: Four four for.
Speaker Change: For next year, we haven't given any guidance yet, but we did point out to the fact that in our in our view, our capex should be fairly stable.
Speaker Change: Other than I know, we've mentioned wireline equipment right, we've switched out from a from selling the boxes to renting the boxes. So as you know that creates that creates extra capex so there'll be a.
Speaker Change: There'll be the impact of that but other than that.
Speaker Change: We're we're looking at stability for going in the next few quarters.
Speaker Change: Okay alright, thank you.
Speaker Change: Okay. Thank you.
Speaker Change: The next question is from Stephanie price from CIBC. Please go ahead Stephanie.
Stephanie Price: Hi, Thank you for fitting me in I wanted to just touch on capital allocation. So leverage is now close to your target range and you were active in the share buyback this quarter and your payout ratio is also near the bottom of your targeted range.
Stephanie Price: Curious in terms of outside of investments in the business. How should we think about capital allocation here would you prioritize and increased return of capital to shareholders or would the focus be on M&A.
Speaker Change: Well I guess, we need to figuring out what's going to take place I mean, if we consider that there is an opportunity for us that will build in the future. We will consider it yet but that doesn't mean, we're going to jump on it and if we were considering it certainly not at <unk>.
Stephanie Price: Bryce.
Speaker Change: It's we will be guided by the accretion aspect.
Stephanie Price: Accretion on EBITDA, but accretion also on money invested the cash that will be required.
Speaker Change: I'd like to highlight.
Speaker Change: Ah something that maybe maybe we are not emphasizing on.
Speaker Change: Sufficiently.
Speaker Change: Our definition of free cash flow.
Stephanie Price: Quite simple, but now you probably you know.
Stephanie Price: <unk> mentioned it again.
Stephanie Price: So it's EBITDA.
Stephanie Price: <unk> interest.
Stephanie Price: On debt minus interest.
Stephanie Price: Leases.
Stephanie Price: Minus taxes.
Stephanie Price: Minus share repurchase and minus dividend.
Stephanie Price: We have been showing that this number is positive and this number brings cash in the bank, which is used to reduce our debt and improve our ratio.
Stephanie Price: Compared to our competitors.
Stephanie Price: Our debt is not growing.
Stephanie Price: We have been seeing our desk competitors growing every quarter.
Stephanie Price: Which purpose this unit.
Stephanie Price: It worked I mentioned this.
Stephanie Price: Back to the reallocation.
Stephanie Price: As you know.
Stephanie Price: I guess that you've been seeing.
Stephanie Price: At our payout ratio.
Stephanie Price: In terms of dividend.
Stephanie Price: Is one of the lowest of the industry.
Speaker Change: Certainly you know at the low side.
Speaker Change: Of the bracket, we mentioned publicly a few quarters ago.
Speaker Change: So I think it worth also to mention that since you know again.
Speaker Change: The free cash flow that we're generating is is always positive.
Speaker Change: Well I don't know if you know.
Speaker Change: <unk>.
Speaker Change: Answer a completely your question if not maybe you are.
Speaker Change: May be I have other answers or I don't know I think that's that's exactly what I would have said.
Speaker Change: That's great. Thank you very much.
Speaker Change: Okay. Thank you. The final question for today is from Vince Valentini from TD Securities. Please go ahead Vince.
Vince Valentini: Hey, Thanks, very much can I try to clarify a couple of accounting things and a couple of things you've said so far first of all on.
Vince Valentini: Drews question on market share when you when you say it used to be 10, and now you know more like 'twenty in some cities I assume you're saying market share of gross adds for freedom as opposed to total share of all subs in the market.
Speaker Change: Well I'm I'm I'm, referring to yes, I'm, referring to gross out yes, I was referring to gross out yes, absolutely.
Speaker Change: No problem just wanted to make sure here the no no no.
Speaker Change: No actually I was not referring to gross that sorry.
Speaker Change: I said, 10% we start when we bought freedom. We bought we were probably at a 10% market share nationally and in some big cities, most notably the GTA.
Speaker Change: We've almost double that so that's that's just a market share of the current market share and yes I mean.
Speaker Change: Current market share I'm not sure how to say it differently.
Speaker Change: Okay do you think you're at a 20% share of the GTA market, but obviously you have to be much lower than that in Vancouver, and Calgary and other other big cities are out yourself to be demonstrably higher.
Speaker Change: Well first of all I didn't say double that I said, if it's not a it's it's it's lower than 20%, but it's.
Speaker Change: It's way higher than 10%.
Speaker Change: Okay.
Speaker Change: Secondly, Dave was asking about the or came up and answer his question about the capital treatment for helix boxes now that you're renting can you help me with the revenue impact is that in some way impacting the internet revenue decline this quarter of how you are treating.
Speaker Change: The rental fees versus what used to be selling boxes.
Speaker Change: Well, yes, because I mean, we used to we used to take it upfront and now the revenue comes over the next periods right. So it will get better obviously, the revenue will keep coming in.
Speaker Change: The next.
Speaker Change: The next quarters. So yeah, I mean, basically we used to recognize the revenue upfront, which we don't any level net of discounts if there were discounts.
Speaker Change: And now we're recognizing over time recognizing it over time.
Speaker Change: Then capex thing.
Speaker Change: Capex is that in the box of course.
Speaker Change: Would that change in the quarter it had a big impact on Internet revenue being down.
Speaker Change: Four 8% like what would have been minus 3% if not for that or something.
Speaker Change: No no no. It's very recent that we started that anyway. So no.
Speaker Change: It's immaterial on a stand up in the quarter.
Speaker Change: Okay, but.
Speaker Change: But it will be more of a to explore it.
Speaker Change: Okay fair enough on that one and I want to clarify.
Speaker Change: Your leases its not huge dollars, but I mean, it's up 10% year over year of $33 million versus $30 million last year is that just simply like sites for cell site sitting and other things. We would think of as leases or is there any way that some of the wholesale fees or somehow being captured as a lease like when you your <unk>.
Speaker Change: Spans or as you pay roaming domestic roaming fees to Rogers or others.
Speaker Change: No I think it did though.
Speaker Change: To your second point no.
Speaker Change: It's it's the you know.
Speaker Change: More sites and and higher rents are higher the sites caused more of the leases are just more expensive basically.
Speaker Change: Okay getting to the end here working capital pretty.
Speaker Change: Pretty big inflow I know, you're proud of the free cash flow and debt reduction and you should be but I mean, it is seems to be getting a bit of a tailwind from working capital that can be lumpy.
Speaker Change: It was up $111 million in the third quarter and 72 million year to date is there anything sustainable in that or is this just timing issues that could reverse.
Speaker Change: No on the on your on cash flow no well I mean, you know.
Speaker Change: Working capital as you know is is hard to predict but we're certainly managing it then you will have seen the trend over the last quarters that it keeps it.
Speaker Change: It keeps improving so.
Speaker Change: I wouldn't expect a.
Speaker Change: A big change of direction over in Q4, no. There was no spectrum auction taking place.
Speaker Change: What would you all be aware of that.
Speaker Change: Thank you.
Speaker Change: And <unk> detailed one and I may have one big picture after.
Speaker Change: Is.
Speaker Change: Simply on the.
Speaker Change: The growth in wireless EBITDA of 17%.
Speaker Change: They remember the number correctly.
Speaker Change: Does that include any drag from higher stock based comp or are you do you gave us that number on a gross basis and then the stock based comp adjustment is more just out there.
Speaker Change: The telecom level.
Speaker Change: Aggregate or are with 17% would have been achieved despite absorbing higher stock based comp.
Speaker Change: No just stock based comp is it was is it spread.
Speaker Change: A good chunk of it is in a is in the head office adjust that well not adjustments at the head office variance that you saw.
Speaker Change: But the but the rest is spread.
Speaker Change: And then it will the rate also between wireline.
Speaker Change: Wireline and wireless of course, those are wireless will take its share of Av.
Speaker Change: The stock comp increase yes.
Speaker Change: Okay.
Speaker Change: If that's the case then the math should be pretty straightforward. If your wireless EBITDA is up 17%. Your cable segment EBITA was down 12% year over year that is unusually bad for any cable company, especially for one that's managing its cost as aggressively as you guys can.
Speaker Change: Can you talk through lateral is that.
Speaker Change: Something you find acceptable I know you've talked a lot about the price war in Quebec is that just the reality of what it translates to what in terms of EBITDA growth or can you is there something temporary in there that you can make it look better in the next few quarters.
Speaker Change: Well you know on the call.
Speaker Change: It's either it's either on the revenue side, Vince as you know or the cost side right and the cost side in wireline as you know these are long term I mean, there is efficiencies and then where we continue always to work on efficiencies and we will continue to do so, especially since we're facing a are there.
Speaker Change: More pressure on the on the top line in the wireline.
Speaker Change: But but it's mostly.
Speaker Change: It's mostly repeating what we said before it is mostly a revenue issue most of which is due to the fact that we did not.
Speaker Change: Bring wireline prices up at the beginning of the year and that we will do now to help matters for 2025.
Speaker Change: Okay.
Speaker Change: Thank you sort of at a laundry list just need to clarify or those things.
Speaker Change: Okay.
Speaker Change: Okay. Thank you very much there.
Speaker Change: Thank you to all of you.
Speaker Change: Only the.
Speaker Change: I'd like to have something because it was.
Speaker Change: One thing that surprised me, but yeah for sure again, we will say that it's a competitive environment and.
Speaker Change: Certainly you have.
Speaker Change: Some effects.
Speaker Change: But when we're calculating IRR.
Speaker Change: We are we don't exclude you.
Speaker Change: We don't exclude any customers, which we've been seeing our competitors doing.
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: Funny is that the there excluding you know the one with the lowest harpoon ER, which mathematically you know increase their their average or so.
Speaker Change: We.
Speaker Change: Recognize the competitive aspect of the of the market and but we will always kind of be transparent.
Speaker Change: About it.
Speaker Change: And we will continue to focus on our capacity to generate money to generate cash to improve our balance sheet and to reduce our debt, which will give us even more leeway in the future.
Speaker Change: So on this I'd like to thank you all and wish.
Speaker Change: With you.
Speaker Change: I'm early and a little bit on the process, but a Merry Christmas and we'll talk to you at the next quarter.
Speaker Change: Ladies and gentlemen, this concludes chemical or <unk> financial results for the third quarter Conference call. Thank you for your participation and have a nice day.