Q1 2025 Rogers Communications Inc Earnings Call

Thank you for standing by this is the conference operator, welcome to the Rogers Communications, Inc. First quarter 'twenty twenty-five results conference call.

As a reminder, all participants are in listen only mode and the conference is being recorded.

Following the presentation, we'll conduct a question and answer session.

And the question queue you May Press Star then one on your telephone keypad.

Should you need assistance during the conference call you May signal, an operator by pressing Star then zero.

Speaker Change: I would now like to turn the conference over to Paul Carpino, Vice President Investor Relations with Rogers Communications. Please go ahead Mr. Carpino.

Speaker Change: Thank you Caitlin 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 brand.

Speaker Change: As a reminder, we will be holding our AGM. This morning at 11, a M and you can pick up that call through the Investor Relations website.

Speaker Change: This call will last approximately CAD until 845, so we ask that you limit yourself to one question. So we can accommodate as many questions as possible, we'll be happy to follow up with you later this morning on any other questions.

Tony Staffieri: 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 earnings report and our 2024 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.

Tony Staffieri: Thank you Paul and good morning, everyone.

Tony Staffieri: This morning, we reported our first quarter results as you saw we continued to deliver growth 2% growth in service revenue and a 2% growth in adjusted EBITDA and we delivered strong margin improvements year over year on our already industry, leading margins. We also demonstrated our ability to execute.

Tony Staffieri: On our Delevering plans, while continuing to invest in our core businesses to drive long term growth. These solid results come against a backdrop of slower growth in our sector driven by lower immigration and a highly competitive market.

Tony Staffieri: Our results also demonstrate our clear focus on disciplined execution profitable growth and delevering the balance sheet.

Tony Staffieri: These are our key areas of focus and a more cautious economic environment.

Tony Staffieri: Cable and wireless we delivered strong financials profitable subscriber growth and industry leading margins.

Tony Staffieri: Despite a significantly slower rate of growth in the market, we delivered 57000 wireless and Internet net additions.

Tony Staffieri: Q1, typically represents about 10% of annual subscriber growth for the industry and so as we work through the quarter, we remained focused on price discipline and delivering profitable subscriber growth.

Tony Staffieri: As I look to the year ahead, we will continue to deliver the same industry, leading performance through four priorities executing with discipline delivering efficiencies across the company.

Tony Staffieri: De levered the balance sheet and.

Tony Staffieri: And advancing our plans to surface value for value from our sports assets.

Tony Staffieri: First on executing with discipline our sector is adjusting to lower immigration. This change was reflected in our 2025 outlook, our revenue and EBITDA growth profile remains positive for the year and our priority is to maintain solid financials financial discipline is key in this or any mark.

Tony Staffieri: That environment.

A good example is our focus on offering high value wireless and Internet plans on the Rogers brand, while delivering differentiated services. The most content the best Entertainment on Canada's most reliable networks.

Tony Staffieri: Disciplined execution with a strong value proposition remains our priority to ensure our financial performance is consistent with our capital spending we are making to improve and grow our networks.

Second on delivering efficiencies across the company.

In this more moderate growth environment, we will look to bring costs in line with revenue growth and to identify more efficiencies. This includes digital investments that both reduce costs and simplify and improve the customer experience. Our track record on driving efficiency has been notable and very effective over the past three years.

Tony Staffieri: And we expect continued strong performance in this area.

Tony Staffieri: Third and importantly, our Delevering efforts remain a top priority, we have been making strategic long term investments for growth. While also accelerating the delevering of the balance sheet.

Tony Staffieri: And I'm seeing both is key to our long term strategy.

Tony Staffieri: We made a clear commitment to de lever when we merged with shot to return leverage to three five times 36 months after closing.

Tony Staffieri: We've made very good progress on this priority since the start of the year, we've attracted an aggregate $9 billion of equity capital.

Tony Staffieri: In closing our structured equity transaction, our leverage will be down to three six times, we will have gone from the highest leverage amongst the three major Canadian carriers to the lowest leverage within two years after closing the Shaw transaction.

Tony Staffieri: It is clear and also worth noting that both domestic and international investors remain confident and Roger strategy asset base and investment grade balance sheet is reflected through these significant investments.

Our assets include Canada's most reliable networks with continuous industry, leading new innovations.

Tony Staffieri: Yesterday, we were awarded the most reliable five G wireless network in Canada by <unk> for the seventh straight year solidifying our long standing leadership in network reliability and.

Tony Staffieri: And earlier this year open signal also recognized Rogers as Canada's most reliable wireless network and most reliable internet.

Tony Staffieri: We also started delivering four gig download and one gig upload speeds and select Calgary communities with the Rogers Xfinity modem.

Tony Staffieri: This new technology supports multi gig symmetrical speeds and includes Wi Fi seven where the first internet provider to bring this next gen Wi Fi to Canadians.

Tony Staffieri: Finally, we will continue to advance our strategy to surface value from our sports assets.

Tony Staffieri: Multibillion dollar value of our World class sports assets is not reflected in our share price and our priority is to change this.

Tony Staffieri: Earlier this month, we announced the renewal of our partnership with the NHL. These national media rights now locked in until 2038 are the most valuable media rights in Canada. The first deal was profitable and successful for Rogers and sports in that and we plan to build on this over the next 12 years.

Speaker Change: On M O S. C. We expect to close the transaction in mid 2025.

Speaker Change: Upon close we will control, 75% of one of the most prestigious sports and entertainment organizations in the world.

Speaker Change: Beyond the sporting franchises associated with this investment we will also expand our revenue and EBITDA base.

Speaker Change: Our sports assets are unrivaled in Canada, and our sports portfolio is one of the best in the World Sports assets continued to appreciate significantly in value and that's why investors remain very interested in holding a minority position in these appreciating assets.

Speaker Change: We continue to meet with external investors, who recognize the opportunity with our sports portfolio for now we remain focused on closing our M. LSE deal to become majority owners.

Speaker Change: Overall, I'm pleased with our operating and financial performance in the first quarter and remain confident in our disciplined execution and steadfast focus to remain the leader in our sector.

Speaker Change: We will focus on a very clear set of priorities consistent with our strategic plan to drive growth and surface value for our shareholders.

Speaker Change: I would like to thank our team for delivering on our priorities and continuing to execute with discipline in a competitive environment as they consistently have over the past three years.

Glen: With that over to you Glen.

Glen: Thank you Tony and good morning, everyone. Thank you for joining us.

Glen: We are proud to report that Rogers first quarter results reflect continued disciplined execution and strong performance in a highly competitive and slower growth market.

Both revenue and adjusted EBITDA are up year over year margins continue to lead our sector in wireless and Internet net additions were strong against this backdrop.

Glen: Importantly, we are also delivering on our commitment to significantly reduce leverage and strengthen the balance sheet protecting our investment grade credit ratings.

Glen: In February we completed a very successful 4 billion dollar hybrid securities offering.

Glen: And we have recently announced our definitive agreement for a 7 billion dollar equity investment led by Blackstone and backed by several leading Canadian institutional investors, which we expect will close shortly after all closing conditions are waived or satisfied.

Glen: These combined transactions at $9 billion of equity capital to our balance sheet and substantially lower leverage from four five times at 2024 year end to three six times as at March 31st on a pro forma basis.

Glen: As a result, I am pleased to report that our balance sheet is sound and we are well positioned for the current business environment.

Glen: Let me start with some highlights from our first quarter results.

Glen: Wireless service revenue and adjusted EBITDA, each grew 2% year over year, primarily driven by subscriber growth over the last 12 months.

Glen: Our wireless margin was up by 40 basis points compared to the prior year at just under 65%, reflecting our sustained emphasis on driving efficiencies, while balancing subscriber growth with pricing and margins.

Glen: In the quarter Rogers delivered a combined 34000 net new wireless subscribers.

Glen: Down from 61000 last year, reflecting the smaller market size due to reduced immigration.

Glen: Importantly, we continue to drive a substantial share of net adds while improving churn with postpaid mobile phone churn down nine basis points year over year to 1%.

Glen: Blended mobile phone ARPA of $57 was down just under 2% from $58 in the prior year.

Glen: Reflecting the competitive intensity <unk>.

Glen: And lower roaming revenue in the latest quarter driven in part by reduced travel to the U S.

Glen: As we operate our wireless business in the current environment.

Glen: Rogers remains focused on the value proposition for our premium plans.

Glen: Our Rogers five G plans emphasize more value and savings for families as they add lines on Rogers consistent with our balanced approach to the market.

Glen: Moving to our cable business service revenue was down 1% in the quarter, reflecting a combination of continued competitive promotional activity and customer churn in both satellite and video subscribers.

Glen: Additionally, we are lapping prior year price adjustments that occurred in the first quarter last year.

Glen: And which were not repeated in this latest quarter.

Glen: Cable's adjusted EBITA was up 1% year over year.

Glen: Driven by a 4% decrease in operating costs from our ongoing cost efficiency initiatives.

Glen: This was partially offset by increased brand investment with the first quarter launch of our Rogers Xfinity campaign.

Glen: Internet net additions were 23000 compared to 26000 in the first quarter last year.

Glen: Reflecting in part lower immigration activity.

Glen: Wireline services remain highly competitive across all regions from coast to coast.

Glen: Our balanced approach to subscriber additions is driven both competitive market share gains while sustaining cable margins at just over 57% a.

Glen: At 110 basis point increase from the prior year.

Glen: And didn't Rogers sports and media, we delivered very strong revenue growth and improved EBITDA.

Glen: Revenue was up 24% year over year, driven by additional Toronto Blue Jays home games in the quarter and by additional advertising revenue from the foreign Nations Hockey tournament.

Additionally, we have benefited from higher subscriber revenue with the launch of Warner Brothers, Discovery's suite of channels and contests.

Glen: And the flow through from the higher revenue has translated into a 36 million dollar improvement in EBITDA year over year.

Glen: On a consolidated level service revenue and adjusted EBITDA, each grew by 2% respectively year over year and consolidated operating margins were up slightly to just over 45%.

We continue to find growth opportunities in tighter markets, having added over 400000 wireless and over 100000 internet customers over the last 12 months draw.

Glen: Driving service revenue and EBITDA growth and margin improvements.

Glen: Capital expenditures for the quarter were $978 million down 8% from one year ago and capital intensity was down 190 basis points.

Glen: Free cash flow of $586 million was unchanged from the prior year largely due to timing differences in cash taxes.

Glen: Turning to the balance sheet at quarter end, we had seven $5 billion of available liquidity comprised of $2 $7 billion in cash and short term deposits on hand, and $4 $8 billion available under our revolving credit facilities.

Glen: Our weighted average cost of all borrowings was four 7%.

Glen: And our weighted average term to maturity was just under 10 years.

Glen: We ended the quarter with a net debt leverage ratio of four three times compared to four five times at December 31 24.

Glen: And down a full turn from the five three times reported when we closed shop two years ago.

Glen: The sequential and quarter reduction was driven by the issuance of $4 billion in subordinated hybrid securities, which reduced leverage by 0.2 times, we intend to use these proceeds to repay debt and to fund a portion of our upcoming MLS see transaction.

Glen: Yeah.

Glen: And as I'd indicated earlier Rogers has now agreed to terms.

Glen: For a 7 billion dollar equity investment with funds led by Blackstone and backed by several leading Canadian institutions.

Glen: Rogers will retain a majority controlling interest in its new Canadian subsidiary, which holds a regional portion of certain components of Rogers wireless networks.

Glen: Rogers maintains full operational control of its network from end to end and we'll consolidate the subsidiaries financial results and its consolidated financial statements.

Glen: The subsidiary is expected to distribute up to approximately Canadian zero point $4 billion annually to Blackstone and the first five years post closing.

After which Rogers average capital cost for the investment is expected to be approximately 7% per annum.

We intend to use the net proceeds from the transaction substantially to repay debt and upon closing we expect our net debt leverage ratio to be approximately three six times on a pro forma basis for the end of Q1.

Glen: Each of these capital transactions are aligned and consistent with our priority commitment to maintain and strengthen our investment grade credit ratings and to dilute delevering back to the pre Shaw transaction levels.

Glen: With these initiatives, we have removed the discount on our dividend reinvestment plan or drip effective from our next dividend payment in July.

Glen: And we will be reverting to open market purchases to satisfy those shareholders opting to remain and the dividend reinvestment plan.

Glen: And finally, we continue to move forward on our agreement to buy the 37, 5% additional ownership stake in MLS see for $4 $7 billion.

Glen: As we await league and regulatory approvals for the transaction, we have had significant interest from various institutional investors seeking to invest in our sports assets.

Glen: Nothing further to add at this time, but we intend to continue to develop and explore opportunities and look forward to providing further information in due course.

Glen: Wrapping up then we have once again delivered strong results in a competitive environment.

Glen: We continue to execute well operationally, while also substantially strengthening our balance sheet.

Glen: We have very substantially lowered our debt, which positions us well for today's more uncertain market.

Glen: I would like to thank our employees for their consistent and dedicated execution across all of our businesses and for their success and once again delivering strong financial and operating performance during a period of major strategic investments.

Glen: Thank you for your time and attention this morning.

Glen: And with that scaling may we please commence with the questions and answers. Thank you.

Glen: Certainly.

Glen: She joined the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.

Speaker Change: Our first question is from Betsy <unk> with UBS. Please go ahead.

Glen: Okay. Thank you.

Glen: It starts with what you are saying.

Glen: So I'm kind of in terms of your confidence you haven't Daniel outlook, given the macro backdrop and potential impact from tariffs.

Glen: And maybe another question on the cable trends you mentioned the competitive environment.

Glen: Do you expect the revenue decline to continue as you lap last year's adjustments or maybe some monetization opportunities as you rollout a xfinity. Thank you.

Glen: Got you. Thank you for the question I'll start and I'm going to let some detailed comments as well.

Glen: In terms of what we're seeing for the rest of the year as both Glenn and I said in our comments we.

Glen: We took into account some of these macroeconomic issues that we're seeing in terms of slowdown in the economy into our outlook.

Glen: And so we continue to forecast and see opportunities for growth.

Glen: Both revenue as well as EBITDA.

Glen: In each of our segments with respect to the second piece on cable.

Glenn highlighted there were a few things one related to timing of price adjustments.

Glen: And the second related to headwinds that we see from satellite.

Glen: The video.

Glen: Losses, but notwithstanding that internet and some of the additional products that we have on the Xfinity platform.

Glen: Will more than offset that and you'll see that commencing in Q2.

Glen: For the rest of the year as you see our cable revenue, which includes business as well I should I light.

Glen: Returning that segment to to breakeven and our growth in the back half of the year.

Glen: Nothing nothing much further to add to that that you I think on on the cable side, specifically, we will continue.

Glen: Continue to find opportunities to grow subscribers through the year.

Glen: That's a significant part of the year over year a growth plan for for the division.

Glen: As well as ongoing work on our on our plans I think the the emphasis here is to restore our the rate side of zero I'm not looking for a a very substantial growth, but certainly expect for the year and the coming quarters, we will see a restoration.

Glen: Of zero to positive growth.

Speaker Change: Thank you Matt.

Glen: Thank you.

Glen: Next question Gayla.

Glen: Okay.

Glen: Yes, certainly one moment please.

Glen: Yeah.

Speaker Change: The next question is from drew Mcreynolds with RBC. Please go ahead.

Drew Mcreynolds: Yeah. Thanks, very much good morning, just first a quick clarification on free cash flow guidance that Glen can you just remind us whether existing guidance included kind of the pro rata distribution on under a structured equity investment.

Speaker Change: Whether that will be updated when when that deal closes.

Speaker Change: And then more broadly my real question just on wireless pricing. It seems like it's two steps forward two steps back to the industry.

Speaker Change: All the operators, saying the right things are kind of acting differently in the market and trying to be disciplined but you know we don't see it necessarily on the price plans and handset discounts. So I just want to ask from Rogers perspective does this simply now just a new normal for them.

Speaker Change: Hereon in or if not you know what do you think needs to change here just day, obviously, it's still a little bit more disciplined and firm up.

Speaker Change: What has been a.

Speaker Change: The decline in pricing that everyone has seen over the last couple of years. Thank you.

Speaker Change: Andrew I'll start with the the first question on the free cash flow guidance. The guidance. We gave for the year was was provided based on the balance sheet and capital structure as it existed, but I've said consistently and continue to say the the transaction.

Speaker Change: On the $7 billion structured equity will will be reflected in our reporting going forward. So people understand how it goes through and would not alter that that guidance range. So it'll be a part of our reporting going forward and no adjustment to guidance.

Speaker Change: On the second part of your question do drew I think it's relevant to.

Speaker Change: Look at it in the context of the market dynamics of what we saw is a significant slowdown in the rate of growth in the market. If you were to look at our Q1 the decline in our net total mobile net additions year on year is roughly in line with what we think the <unk>.

Speaker Change: Market is declining and so if you look at the postpaid market our estimate it's probably down for the total market in Q1 by about two thirds.

Speaker Change: And in terms of total AR mobile, it's probably down by a third is our estimate and so against that backdrop. Notwithstanding we like to think that we were very price disciplined in the first quarter are again, I reiterate first quarters about 10%.

Speaker Change: Of total annual volumes and so on.

Speaker Change: We thought it was a good opportunity to focus on the higher value segments with minimal discounting we were disappointed to see the market still.

Speaker Change: As you mentioned continuing with some discounts in the below $40 price point, but.

Speaker Change: But we'll that too we think the market adjusting to a smaller size and you know as we look to the rest of the year, we see opportunities for growth.

Speaker Change: In our in our Pud, frankly, and and price discipline, you would've seen late in the quarter Rogers coming out with a revised wireless pricing plan that is much more simplified I'm much more focused on the added benefits in terms of the value proposition BC.

Speaker Change: Sides, just the the data bucket size and also focused on multiline consolidation.

Speaker Change: Relative to our U S peers.

Speaker Change: We're much more fragmented here in Canada in terms of a multiple lines with multiple providers.

Speaker Change: And so we're focused on that strategy as well in terms of handset discount that you've talked about.

Speaker Change: We see the opportunity for the market here in Canada.

Speaker Change: Move in line with where the U S shoes and promotional activity centered more around the handsets.

Speaker Change: While maintaining our price discipline and the plans themselves with monthly subscribers and so those are some of the dynamics, we see drew and so we are optimistic about our outlook and the industry's outlook to improve price discipline in the marketplace.

Speaker Change: That's great color. Thank you.

Speaker Change: Thanks to our next question gaming.

Speaker Change: Certainly one moment please.

Speaker Change: The next question is from Linda <unk>.

Speaker Change: <unk> with Canaccord Genuity. Please go ahead.

Speaker Change: Good morning, Thanks for taking my question on the cable side Tonio glad I mean, one thing that sort of evident is it are you Europe, even though it's slightly down year over year, you'll have the broadband net adds are holding up fairly well with respect to sort of what we've seen and what we expect from peers.

Speaker Change: I wanted to get a sense of that.

Speaker Change: The level of contribution Youre getting now from F. W. A instead of your reseller initiatives and how we should set of POS that are you know that net adds number from that from that perspective. Thanks.

Speaker Change: Thanks for the question I was going to.

Speaker Change: A couple of things.

Speaker Change: Our focus is on growing net adds and revenue through all.

Speaker Change: All our technologies such we continue to remain focused on on net.

Speaker Change: In both the east and the West and we've seen good improvements on that particularly when it comes to bundling. We've always had a strong position in the east and notwithstanding that.

Speaker Change: Continues to improve but we're also seeing it in the west and so there's good progress there on that at very good incoming our booth as well.

In terms of are five G wireless home modem that continues to do well also some of the technology improvements we've done in terms of network slicing, but also upgrading the speed you would've seen us move up to 250.

Speaker Change: Download speeds are on SWA and that's been our.

Speaker Change: Successful across the nation, but in particular in places, where we don't have wireline and Quebec and certain parts of southwest, Ontario, and as we.

Speaker Change: Look to launch our full suite of Xfinity products are on that wireless modem, we expect the penetration opportunity of that continue to grow. So we're pleased with that and then finally on the wholesale side of it where it makes sense, we continue to deliver on that as well, but you ought to.

Speaker Change: Think about the relative breakdown as you know focused on on net first fixed wireless access and then T. P. I E is sort of the third piece of it. So that's roughly the breakdown of Oh.

Speaker Change: Of those three technologies.

Speaker Change: Okay.

Arlinda: Thank you. Thanks. Thanks, Yeah. Thanks Arlinda next question gave me.

Speaker Change: The next question is from Tim Casey with BMO. Please go ahead.

Arlinda: Great.

Speaker Change: You clarify.

Arlinda: Expectations about M L L C.

Arlinda: Equity Glenn in your prepared remarks, you indicated you are talking to investors. So.

Arlinda: I get a deal have control of another 37.5% of the equity, but should we expect you to own that or should we expect there to be.

Arlinda: Third party investors involved when you close.

Arlinda: My my expectation on closing is that we will close the transaction with buying the V C stake.

Arlinda: And then.

Arlinda: On the on the other side of that we continue to get substantial interest from institutional investors and and so we will explore those opportunities with a very open mind and yeah nothing nothing further to say at this point.

Arlinda: Tim but we are we're certainly engaging in those discussions.

Speaker Change: And Glenn what what are the what are the hurdles that you have to still have to go would be to close the transaction itself.

Arlinda: Are you seeing any.

Arlinda: Anything from the C or D C in terms of timing and from the leagues themselves.

Arlinda: No no specific timing given I don't I don't expect any any substantial hurdles, we're a known quantity to the leagues with our existing ownership interest.

And it's a fairly straightforward transaction.

Arlinda: So the league approvals I expect in due course, and the CRT see review again, I don't expect any substantial hurdles there, but CRT C needs time to to run it's a it's a review and so I think you heard you know our expectation on timing is continues to be mid year none.

Arlinda: Thing nothing substantial or further to to update from that.

Arlinda: Thank you.

Speaker Change: Thank you Tim Thanks, Tim next question Galen.

Speaker Change: The next question is from Vince Valentini with TD Colin Please go ahead.

Vince Valentini: Yeah, Thanks, very much sticking on that topic with my first question do you hope that you can.

Speaker Change: Now, it's not close because it takes a while for approvals, but announce a transaction with third party investors sometime in this calendar year.

Speaker Change: And the second question just throw it out first so Paul doesn't cut me off.

Speaker Change: To get through the list in terms of wireless sub at AT&T and Verizon are both signalled January and February was very weak, but they they felt better ads and in March can you give us any sense of the pacing through the quarter that that you saw in and maybe some some some outlook on how how Q2 in April has started.

Speaker Change: Are we seeing a bit of a recovery in what seemed like a very lackluster start to the year for wireless sub adds across not just for Rogers, but the whole industry. Thank you.

Speaker Change: But it's I'll start with the second part and then Glenn will come back to.

Speaker Change: Your question on MLS see investment timing in terms of the profile. We saw in the first quarter, it's not dissimilar to what the others are south of the border of communicated it was a slow January February and somewhat typical we see the uptake during March and March break.

And so that's the profile, we saw and as we.

Speaker Change: Goes out April we see a continued pacing of good volume activity.

If we were to having said that we continue you know last year, we would've had total wireless market growth of just over 4%. We indicated back in January when we released our guidance on.

Speaker Change: We saw a market growing for the full year I'd roughly 3%, we continue to see it as roughly 3% give or take a little bit for the full year and so so a bit of a different dynamic from the U S. In terms of where we were and they were and so hopefully that's helpful in terms of.

Speaker Change: How do we see the pacing.

Speaker Change: Yep.

Vince Valentini: Vince Vince on your first question. It's it's we're in.

Vince Valentini: Discussions with folks who are interested in the assets we own in and are soon to acquire.

Vince Valentini: It's gonna it's premature for me to start speculating on win.

Vince Valentini: That might result in a transaction I would say we are engaged in those conversations in earnest.

Vince Valentini: We are are more aware than the market is reflecting right now of the value of those assets on our balance sheet.

Vince Valentini: We believe those assets to be worth something in the range of $15 billion. Once we close on the purchase of the additional interest in MLS see.

Vince Valentini: Others talking to us also understand that value.

Vince Valentini: We are engaged in those discussions as I say in earnest and you know more to more to follow but well, there's there's plenty of opportunity there and we've been consistent in indicating that a we are engaged in finding those opportunities.

Speaker Change: Tories right, Paul just to clarify Glenn you're.

Vince Valentini: 15 billion is what you're asking me to an agent.

Vince Valentini: Yeah, but with 75% ownership of M, a C or that would be.

Vince Valentini: Okay. That's that's what we quote that that's correct yes.

Vince Valentini: 100% of the JV obviously.

Speaker Change: Yes, and Roger Center, Yes.

Speaker Change: Excellent. Thank you Vince. Thank you Ben next question Gayla.

Speaker Change: The next question is from your own barrels with Desjardin. Please go ahead.

Gayla: Hey, good morning, Thanks for taking my question a longer term question on the satellite on the mobile side the bite to the bias I understand there's a really important limitations for this technology. So I don't think it's a near term threat at all.

Speaker Change: But interested in hearing you on if he think eventually satellite could compete with cell phones for mobile data transmission and you've been there yet thanks.

Speaker Change: Thanks for the question Jerome as we've previously announced we're working with a few satellite operators to bring that technology to Canada.

Speaker Change: As quickly as we can but it is an emerging technology as you said and.

Speaker Change: So we're working very closely.

Speaker Change: With the satellite owners, it's gonna be a game changer, you know today, our wireless network.

Speaker Change: Including those of the competitors cover about 12% of the land mass here in Canada, and so theres a real opportunity to.

Speaker Change: I cover the whole nation, particularly with respect to 911 and first responder emergency texting.

Speaker Change: Which will be the first wave of it.

Speaker Change:

And that'll come in due course.

Speaker Change: So I don't want to say too much on on timing with respect to that but we don't see satellite necessarily replacing wireless it's much like the wireless wireline debate and we had 20 years ago as to whether wireless would supplant and theres always an increasing.

Speaker Change: The demand for data latency and a whole bunch of other things and so it'll be something satellite will be something that augments, our wireless and wireline networks.

Speaker Change: It does have limitations as well in terms of in building them. So.

Speaker Change: You need to have some sort of direct satellite view, if you will for it to operate so certainly it's going to be a significant step up in coverage.

Speaker Change: But it'll continue to evolve in terms of its capabilities and.

Speaker Change: And so we don't see it as something that necessarily replacing.

Speaker Change: It replaces a terrestrial wireless.

Speaker Change: Very clear thank you.

Speaker Change: Thanks Jerome.

Speaker Change: Daily we have time for two more questions. Please.

Speaker Change: Thank you. The next question is from Matthew Griffiths with Bank of America. Please go ahead.

Matthew Griffiths: Oh, hi, good morning, Thanks for taking the question I'm, sorry, I have to ask a tariff question.

Speaker Change: So are you guys purchasing Rogers purchase handsets from like Apple USA, and so anything that they do with parents with China for instance.

Matthew Griffiths: You know influence AR.

Speaker Change: You are purchases in handsets or are you going maybe directly to China and maybe bypassing.

Matthew Griffiths: Impacts that may or may not materialize and then just if you could.

Matthew Griffiths: Is it possible to quantify the rolling impact on our on our cool in the corner and we see that going on early on in Q2. Thanks.

Matthew Griffiths: As you all start with the first one and Glen will talk to the second part with respect to roaming in our booth.

Matthew Griffiths: In terms of the tariff impact I should probably.

Matthew Griffiths: Take a step back little to no impact on us directly or most of our suppliers are within Canada and the other pieces of it largely come from outside the U S and so the tariff issue as more as we've said before a concern around the macro economic.

Matthew Griffiths: Impact for Canada and Canadians.

Matthew Griffiths: With respect to handset, specifically I don't want to get into the details of exactly how we purchase I will say that irrespective of how the legal structure of it is it's still a bit of an unknown and a risk with respect to handsets given comments made by the <unk>.

Matthew Griffiths: U S administration on the topic and so we'll continue to watch that closely and so you know we highlighted as a potential risk.

Matthew Griffiths: But we think it's a it's unlikely.

Matthew Griffiths: And in terms of your your ask on on roaming in the quarter.

Matthew Griffiths: Matt the the.

Matthew Griffiths: Roaming traffic was probably 15% or so give or take of the the decline in our pud the rest of it was.

Matthew Griffiths: Competitive.

Matthew Griffiths: Intensity in the market.

Matthew Griffiths: It's really helpful. Thank you so much.

Speaker Change: Thanks, Matt and giving our last question. Please.

Matt: Certainly the last question is from Mayer Yaghi with Scotiabank. Please go ahead.

Speaker Change: Great. Thanks for squeezing me in so I wanted to ask you a question on I'll go back to Joe's question on the deal the backhaul deal so Glenn.

Speaker Change: Glenn you your free cash flow.

Speaker Change: Clinician does not include principal payments on the lease liabilities. So I just wanted to make sure I understand.

Speaker Change: Cash flow guidance that you gave for 2025 does it include.

The borrowing are the reduced interest cost on borrowings coming from this backhaul deal, which will lower your debt levels or not and if we include.

Speaker Change: Principal payments.

Speaker Change: Look at cash on cash are real cash generation.

Speaker Change: Including the lower debt levels and increased principal payments from the lease liabilities, how little the free cash flow generation.

Speaker Change: Impacted from this deal.

Speaker Change: So thanks for the question Mayor I think.

Speaker Change: You if you simplify.

Speaker Change: It's down to just the dollar flows.

Speaker Change: But more from the standpoint of the.

Speaker Change: The distributions that we make.

Speaker Change: On.

Speaker Change: The the transaction.

Speaker Change: Net of the interest savings on the debt is repaid.

Speaker Change: Full value of the distributions that get paid out.

Speaker Change: Full value of the interest savings net off the cash taxes, it'll go up a little bit for the fact that the interests creates a tax deductible expense the distributions do not the net of that.

Speaker Change: Dollar flow.

Speaker Change: Does not substantially alter where our free cash flow is it would not have resulted in you know in any any difference in the guidance. We gave on the year the distributions as I've indicated.

Speaker Change: Our.

Speaker Change: Point $4 billion a year the interest savings on a 7 billion dollar debt repayment you can figure that out not far off from that number the interest shelter offsets it a little bit you're not you're not talking about a substantial difference in the AR and the cash costs that.

Speaker Change: That will go out on the distributions.

Speaker Change: Okay, Great and then just a follow up and I just on the corporate line.

Speaker Change: That the loss on the corporate line.

Speaker Change: Has it been increasing lately what is the outlook going forward on that line, including Capex. Because it has also increased year on year by about $35 million.

Speaker Change: The the Capex, there's you know there's a.

Speaker Change: There are some you know year to year.

Speaker Change: Ah variations in capital spend at the corporate level some of its real estate related some of it systems related from year to year that I don't I don't expect to be particularly material year to year. The corporate losses line, we have some investments in.

Speaker Change: The the startup of Rogers Bank. It is still getting its finding its scale and so that that runs through the corporate line.

Speaker Change: I would say that our all of our corporate departments, along with our business departments.

Speaker Change: Being a target of looking for efficiencies and driving those efficiencies that continues to be a focus for us.

Speaker Change: And so yeah nothing further due to clarify there I think you've you've seen it a rising in part as well as a result of I'm just the changes that come from the acquisition of Shaw and the roll through of some of that integration.

Speaker Change: That is a.

Speaker Change: Largely complete from an operational standpoint, but there were still some some remaining investments on the Capex side as you say in the systems as well as some people that are in some of those numbers as well. They that is one of the areas of focus for us.

Speaker Change: That's great. Thank you Mary and thank you everyone for joining us we will happy to follow up if there's any other questions.

Speaker Change: Thank you everyone for your time and attention much appreciate it.

Speaker Change: This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Speaker Change: [music].