Q3 2019 Earnings Call
In Q1, we connected.
Thank you.
Good day and welcome to the coach coach Inc. and coach go Communications Inc. third quarter 2019 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Petros Sweeney Senior Vice President and Chief Financial Officer, Cogeco Inc. and coach Go Communications Inc. Please go ahead, Miss you mean there.
Good morning, everybody and welcome to our third quarter Conference call also joining me today are footage at the money in an entity.
On their incident Bernie.
So as usual before we begin this call I'd like to remind listeners that the call is subject to forward looking statements, which can be found in our press release issued yesterday and I'll turn the call over to Philip today.
Good morning, ladies gentlemen, and shareholders of Cogeco Communications, Inc. and Cogeco, Inc.
And thank you for joining us to discuss the results of our third quarter ending May 31 2019.
Let us begin with Cogeco communication.
Our previously announced sale of Cogeco Pier one as closed on April Thirtyth for a net cash received a 720 million, resulting in a net gain on disposal of $82.4 million.
This transaction now allows cogeco communications to focus exclusively on the growth of our North American broadband business with greater flexibility to pursue organic investments.
And acquisition opportunities as our net leverage as declined from 3.3 times at the end of the second fiscal quarter to 2.8 times as of May 30, Onest when excluding the results of Cogeco Pier one.
The transaction has also allowed the launch of a normal course issuer bid, where cogeco communications could repurchase up to 1.8 million shares or 10% of its public float over a one year period.
Between our share buyback program and our dividend, we could return up to 60% of our expected fiscal year 2020 free cash flow to shareholders.
That is dividends and then if fully exercised.
The management team is focused on delivering shareholder value.
By creating exceptional customer experience.
Augmenting our geographic regions in the Us and Canada.
Mobilizing highly engaged teams and in time expanding into new telecommunication market segments, such as wireless.
The implementation of a new customer management system.
The rollout of many digital initiatives.
As well as one gigabit internet speeds.
And the upcoming launch of an IP TV platform in Canada.
Demonstrate our commitment to offer and then services.
In a cost effective way.
Could you go connections recognition and 2019 as one of the top employers in the greater Montreal area by the editors of Canada's top 100 employers.
Is a testament to our engaged workforce.
On the wireless side in Canada.
We were very pleased to see the recent actions by innovation science and economic development as well as this year Tc.
To explore regulatory changes that would allow capable regional entrants into the wireless market.
In our submission to the sea RTC.
We propose a hybrid them animal model.
In which companies with significant network access infrastructure would add regulated wholesale access to spectrum in regions, where they operate.
This approach.
Balance the objective to sustain Canadian investment.
And implement pro consumer measures.
We remain committed to exploring opportunities to enter the wireless space in a dip in a disciplined fashion.
And given the consultation timeframe and the areas discussion in this process. This process will result in.
It is still too early to provide further comments on the specific of a wireless rollouts.
Let's now move to an overview of our consolidated financial results.
Note that results from continuing operations exclude cogeco peer one's result.
So for the quarter revenue is up 1.7%.
And EBITDA up 4.3% in constant currency when compared to the same period last year.
Reported revenue has reached five.
A $587.3 million and EBITDA has reached 283.9 million generating a margin of 48.3%.
Cogeco connection achieved an EBITDA growth of 3.6%.
Which is close to last quarters strong performance.
And customer trends have improved compared to last year.
Atlantic broadband 4.4%.
EBITDA growth was in line with expectations.
Reflecting higher marketing expenses at now at a normalized level.
With Q3 also capturing the full impact of the annual January Onest programming rate increases.
The increased marketing spending.
The Florida expansion plan.
And a greater focus on reconnecting seasonal customers in New Hampshire, and Maine AFE beta.
As the primary service units net adds of 15800 have more than doubled in the quarter compared to last year.
The quarterly dividend was reconfirm at 52.5 cents per share.
A 10.5 increase over last year.
Let us now look at the individual components.
At Cogeco connection our P. a few trends in the quarter are slightly ahead of the comparable quarter last year.
Now, reflecting normalized trends as our CMS migration issues have been fixed.
And we have ramp up our sales and marketing efforts since last November .
The new CMS is the foundation piece of Cogeco connection evolution to digitize customer experience.
Enabling quicker response time, and better digital interaction to enhance and personalize the customer experience.
Cogeco connections revenue as declined by 1% in the quarter, which is the trailing impact of declines in rigid residential video and telephony customers in Q4, 2018, and Q1 2019 as a result of the transition experienced last year with the new CMS.
Commercial services revenue growth was strong at 6%.
And now represents over 10% of Cogeco connections revenue.
As customer trends have stabilized we expect overall low single digit revenue growth at Cogeco connection in Q4 and in fiscal 2020.
Could cogeco connections EBITDA has grown by 3.6% in constant currency.
Mainly as a result of lower workforce expenses.
Resulting from an operational optimization program in the first half of fiscal 2019.
And lower programming costs as a result of lower PSS use.
One gigabit Internet speed is now available to about 55% of our footprint and we are on track to achieve our 60% goal by the end of August .
Cogeco is pleased to see the continued momentum at the federal and provincial government levels.
To support private investment.
In ice speed Internet connectivity in regional areas.
In addition to the budget announcements made in Ottawa, Qubec and Toronto alleged last March and April .
Which included a combined 4 billion in government funding over a decade.
The federal government recently, NVO, Canada's connectivity strategy called ice speed access for all.
This strategy confirms the critical importance of connectivity for economic development.
And a strong commitment of the federal government to work with provinces and the private sector to achieve its ultimate goal of connecting 100% of Canadian by 2030.
Cogeco is very well positioned to support their respective government in achieving their goals.
The new program will be a great opportunity for cogeco.
To grow and extend our regional ice speed Internet coverages across Ontario, and Quebec.
As well as further bolster our leadership position.
In our target markets.
Atlantic broadband revenue and EBITDA have increased by 5.4% and 4.4% respectively in constant currency, mostly due to organic growth.
The organic growth is mainly related to three factors.
The continued growth and upsizing and residential internet and commercial services.
The rate increases implemented in August and former ABB systems and in October in the Metro cast systems.
And the ramp up of the Florida expansion plan, which is now positively contributing to EBITDA.
The PSC trends in Q3 were very strong as explained earlier, especially for Internet, which is our higher margin service. We are pleased to note that the internet penetration over the last year has increased by about 1%.
Atlantic Broadband currently offer one gigabit Internet service in over 75% of its footprint.
And as well aligned to reach its 90% target by the end of August .
Let us now take a look at Cogeco, Inc.
Consolidated revenue has increased 1.3% and EBITDA, 2.9% in constant currency.
As you know, we operate 23 radio stations, which for the most part.
Occupy a leading position in their respective respective markets.
Our team strives everyday.
To provide relevant and unique content to $5.4 million listener per week, we tunes to our stations.
That being said the advertising markets in the traditional radio business continued to be challenging.
And competition as increase relative to last year.
As a result, we are managing our cost tightly.
In order to ensure that we continue generating attractive free cash flows from the business.
The quarterly dividend has been reconfirm at 43 cents per share.
10.3 increase percent increase over last year.
For fiscal 2019, our April 9th guidance was which was revised.
To exclude Cogeco pier one remains unchanged.
We are now introducing our preliminary guidance for fiscal 2020.
Which on a constant currency basis relative to fiscal year 2019.
Calls for revenue growth into 2% to 4% range.
And EBITDA growth in the 2.5 to 4.5 range.
The expected low single digit growth at Cogeco connection will stem largely from internet customer additions and growth in the business sector.
The expected mid single digit growth at Atlantic Broadband will result from both the residential and business sectors and continued Florida expansion.
In fiscal 2020, the capital intensity ratio is expected to be below 20%.
As a result of revenue growth.
The expected slight increase in capital expenditures should be mainly related to the US operations as we continue to expand our network in Florida.
Our Capex budget includes investment to further extend our one gigabit internet speed footprint in both countries.
The rollout of our IP TV platform in Canada.
Continued digital transformation initiatives.
And further expanding our footprint in Canada, where we can secure government funding for high speed Internet.
We are currently testing our IP TV platform and we are very enthusiastic about the advanced features we will provide to our customers.
We are expecting to launch.
To our entire Canadian footprint by the end of the current calendar year.
Free cash flow on a constant basis should grow by 5% to 11% mainly as a result of increasing EBITDA.
Modest capex growth.
And declining financial expenses due to the $720 million received from the sale of Cogeco Pier one.
As you can see the fiscal year 2020 looks very promising.
As we continue to.
Pursue profitable organic growth through providing and then services to our customers.
Growing our internet and commercial services market shares.
And expanding in select areas such as Florida.
Profitable growth will also be accomplished.
Through continued investment in employee engagement astute marketing.
Digital transformation initiatives.
And consistent investment in infrastructure upgrades to provide service and enhancement to our customers.
We continue to look for attractive acquisition opportunities.
And are proactively engage into Canadian wireless consultations.
And now we will be happy to answer your questions.
Thank you at this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you are using a speaker phone. Please lift the handset before pressing any keith.
Your first question comes from the line of Vince Valentini from TD Securities. Please go ahead.
Thanks very much.
Couple of questions first on the Internet subscriber adds in Canada.
So if the.
See issues are behind you.
I'm just trying to struggle with how the Internet Shabad number is basically the same in Q3 this year.
As it was in Q3 last year and obviously it was a slight negative.
Is that some sort of timing or a seasonal issue do you expect a strong.
Recovery in Q4 on on that front.
Yes, so hi, Vince so we.
We have a quarter that was.
Generally in line with what we were looking for a little softer.
But when you compare to last year I would say the main difference will be when you get to Q4 and Q1 of next year.
That's where we have the bulk of the impacts on the PSC use when we made the change in the in the system.
The Q3 of last year, we were already one month into it but there was the beginning of the implementation so.
You should not normally see a big difference year over year in the third quarter, which which obviously will change in Q4 and Q1 and for the future. So this this quarter was a little softer in Canada and stronger in the US in terms of PS use we would expect in Canada two to improve going forward.
Action mine, Vince as well that Q3 is typically a a slowest quarter in terms of internet.
Net adds.
As it's that there is a lot of summer returning home for the summer.
Yes, maybe just expand on that and if you don't mind should make sure we're not under a different page here. If I look back two years ago to the third quarter of 2017 was there something unusual then I may have forgotten about because you added over 5000 internet subs in that quarter.
If you look at.
Actually it does vary from one quarter to another that quarter was a little stronger if you look at the total POS you picture for Q3 of 2017, we were up to.
Minus 7.6.
The 7600, the Ts use.
And this quarter is a bit softer at minus 12, So thats why I said, if you look in the past. So basically we would expect to go back to normal there's no particular relationship with the.
The system change that's behind US, it's just that some quarters are a bit softer.
The the video was a bit softer the phone was stronger than usual in this quarter and the internet.
Again 2017 was a little.
Stronger than usual in Q3, Okay. No that's fair. Thank you.
Last question I was just a bit more structural one.
CGM versus GCA.
I, just I look back over the last.
Two or three quarter year show the last.
11 quarters in every single period.
The free cash flow per share achieved Joe is higher.
Then the free cash flow per share it at GCA and Thats, what I back out the the economic interest in CHC, Joe doesn't own so just take proportional free cash flow.
GCA and then there is slight extra amount exceeds your generates from radio and and the management fees just consistently doing more free cash flow, but yet your dividend is $1.72 at GGB and its $2.10 at CCM, just 22% GAAP.
I also did the math, just saying how much dividend as.
CGM get from GCA every year.
And then add back the amount of extra free cash flow CTO generates from which other businesses.
There's also a pretty huge gap there is there some structural reason why you think a lower dividend CG all make sense then its CCH.
The there's our historical reasons why we have the difference today and had to do with the facility. The bank facilities, we had with have been changed in the past few years.
So theres not a structural reason today.
So thats why also we started doing the the buyback program now, we havent and both companies, but we started.
A lot earlier at sea Geo because we had additional cash flow. So in terms of returns of capital.
We if you take the total of buybacks and dividends we have addressed it this way.
You have.
Good question, though going forward is this something that will that will change we typically make the decision on dividends in the fourth quarter.
But it's really due to historical reasons. The other thing I could add is that we've been increasing the dividend thats CTO in a percentage basis high at a higher rate.
Then CA for the past few years to close that gap. So it's just a question of the judgments on on how quick or not we want to do it.
Thanks, Chris.
Your next question comes from the line of drew Mcreynolds from RBC. Please go ahead.
Yes, Thanks very much couple from my end first on the Canadian side of the business clearly getting some very good margin expansion.
Wondering I guess, Patrice the extent to which the current.
Expansion numbers ending the first quarter, you expect to continue and how ultimately.
IP TV could impact that as we look into fiscal 2020.
Sure.
So indeed, the the margin is very strong in the quarter.
They vary a little bit from one quarter to another depending on many elements that happened during the quarter. So if you think going forward. We we're thinking in the upcoming year to see an increase in margin in 2020 versus 29 team.
So in.
But not to the extent we had in the in the third quarter. So a range of.
A little higher 53, 54% would probably be a good a good proxies for the coming year in terms of IP TV.
The major impact will be on the Capex side. Once we start the program so that will be at the end of the calendar year.
There is improvement that we're expecting eventually also in in Opex as there is more self installs and as we get closer to the launch or when we launched and we will be able to provide more more clarity on this we just want to make sure that.
We launched for us before addressing this but more more capex impact than Opex with IP TV.
Okay and.
And sorry, just just on the Capex impact.
You are saying ultimately are positive, but but near term negative or did I reaching correctly.
No not not negative near term.
Is that when when we launch IP TV, we should be able to benefit from a decrease in capex on the Cps Thats just one portion of our Capex, obviously, but on that theres going to be an impact.
Okay understood and.
In terms of the TV picture.
Can you comment on what you're seeing in terms of cord cutting.
Perhaps Ontario.
Versus call back if there is a difference, but also how Canada would compare to the footprint us footprint.
Are you seeing any acceleration is it relatively stable any commentary there would be helpful.
Sure no nothing new really so historically, what we've seen as the cord cutting has been a bit slower in Canada than what you've seen in the U.S.
And then the USA I would not call the dramatic either but it's a little faster than what we see in Canada.
So nothing nothing really new there.
I know the PS use were or the video PS is in Canada were softer this quarter.
Had more to do with.
With.
Because the timing of.
Of marketing promotions and.
Okay competitive situation than pure cord cutting.
And between Ontario, and Quebec.
Ads.
I would say generally the what's available from streaming services is more catered towards the anglophone.
Market, so and our markets in Canada is a bit more francophone so.
Less impact on on on Quebec, perhaps than what you'd see in Ontario.
Okay, that's great.
On the American broadband side, I think last quarter, you did talk about.
I see an uptake in Internet net additions I believe in Q4.
As some of the MD you business and the larger contracts come onboard did we see any of that in Q3 or was Q3 just to.
A more of an organic kind of <unk>.
Uptick from from Reconnects and more marketing dollars put to work.
So the one we were referring to.
That will come online in Q4.
Because it's a bigger one.
Is still planned for Q4 right now it does not happen in Q3.
And obviously, we have a lot of.
A lot of.
Customers in Florida. So obviously, we typically comment only if it's if it's a bigger.
So in Q3, we did see a nice uptick year over year I would say, it's really two reasons. So we're investing in Florida and selling as well. So there is an uptick there that's a portion of the reason.
And it will be a bit spotty from quarter to quarter and the other reason is the reconnects.
And we've been successful at capturing our fair share of the reconnect. So actually it was stronger this year than what we had achieved last year, which was the first time, we were running this new operation that network assets.
Okay. That's great last one for me.
A little bit more modeling in terms of a blended cash tax rate for fiscal 2020, if you have that handy that'd be great and if you can give us any.
Contact from depreciation and amortization again, just strictly for modeling.
Sure sure so the the cash tax percentage is 12%.
And we we typically put it also in the Mdna just so people can work the math.
And I just came out yesterday.
And in terms of depreciation.
So.
I am looking at foundries here, we could maybe we can take it offline, but I would not necessarily expect that high level.
Significant change from what you're seeing in current quarters, because the continuing operations are.
Our out sorry, the discontinued operations of CP, one are out of the numbers. So you should not necessarily see.
A major difference.
Okay. Thank you very much.
Your next question comes from the line of Jeff Fan from Scotia Bank. Please go ahead.
Thanks, Good morning, and thanks for taking my questions.
First just on your guidance for.
20.
I am assuming the growth rates that you've given are based on the midpoint of your guidance is that correct.
So it's a good question because we're in a period, where we have two guidance out so 2019 and 2020 typically what we do is we try to.
We do we do look at where we think we'll end up and we do have ranges that can absorb.
Differences with with the mean.
So we don't necessarily use the mean per se, but.
We our goal is not to have to change the guidance when we get to the end of Q4 and report the actual numbers for the year of 2019.
And so thats our goal it Doesnt mean, it will work every year, but normally what you what you have would be.
The guidance, we would normally keep for them.
Next quarter four 2020.
I see okay. So so just so I understand what you're saying is you like to maintain growth rates that you've given up.
And.
And I will be based on one month. After my team has done will be based on the actual up 19 about your growth rates is shouldn't expect to change.
Thats right Thats our plan right now obviously.
I would say as the kind of the as the business evolves, we relook at it every quarter, but that's the current thinking.
Okay great.
Just on Canadian cable.
Two questions earlier, I think about the system migration, although the impact of last year, one other things I do recall.
Was that you had issues on bill credits because of some of the issues that you faced.
Can you just remind us.
When.
So the impact of those bill credit top and.
If there was any ways to kind of remind us help.
Much or how much the impact was.
Yes. So the the credits were primarily given in Q4 of 2018 and Q1 of 2019 and that corresponds also when you saw a larger decrease in NPS use.
And we need to go back to what we actually said publicly its been a while.
But they were in a few million dollars in each quarter from my recollection.
Okay.
And just my final question is on the share buyback.
And I guess related to that leverage.
Nice to see that you guys are buying back shares with the tier one.
Proceeds it looks like you bought back roughly 112 year end in one month. So I guess the read through there is that you are on pace to buy them to execute the full full buyback and it sounds like from the earlier comments that you're going to be allocating 60% of your cash flow towards dividend and buybacks you would execute the full full beilock am I interpreting that correctly.
Yep.
So I'm sorry did you want to take it.
Okay. So the.
We did actually do.
Above 112 in May we actually did not buyback during the blackout period in June and we have an ability to do so or not them.
Depending on depending on the choices, we make at that point, we can be in the market are out because.
Has the regulation basically and the way we operate have too.
Those instructions have to be given before so we haven't done it in June and we're planning to restart in the in July .
So thats a call we make every time in terms of total amount for the year were planning to do a very large portion of the of the buyback and Thats still the plan.
And but again June was not there so you might end up a little lower.
Okay understood. It was a good start can you just remind us.
What you're targeting to settle with respect to your.
Leverage ratio.
At the.
Sorry at the end of Q4 is that your question.
No it didn't like what your target leverage ratio is.
Oh, it's still about three times or below that now following the sale of CP one.
But obviously as we've done many times in the past that our leverage goes down and then.
When does an acquisition that goes up so it's we're still targeting at the high level three times.
Okay, great. Thanks.
Your next question comes from the line of Matthew Griffith from Bank of America Merrill Lynch. Please go ahead.
Hi, Thanks for taking the question I just wanted to ask on the Canadian segment.
For the past three quarters, you've called out resellers.
And the having an impact on the Internet I was just wondering if this is kind of a growing.
Competitive threats that you're seeing and maybe how large it's it's become in that segment.
And then also in Canada, just curious if you could give some comment on that.
Whether bell has kind of made some more inroads and laying fiber across your footprint and.
How effectively you feel as though your.
Kind of retaining those customers as they they pushed further in thanks.
Thanks for your question so on the reseller side on the.
Internet services, they're very nice and they're very localized.
If.
My memory serves me well this year Tc numbers indicate.
About 10% to 15%. So they are they are developing very nice solution and they are gaining some shares but in some very specific areas in some cities.
So not a major concern there now on the Bell side we.
We are not.
Seeing.
A major changes in the market, there and we feel very well equipped with our internet being deployed that.
2020 everywhere and as you heard me say, we are rolling out our one gigabit internet speed.
Where where their mind is as well as.
The competition is also using some fixed wireless solutions that are maxed out that 50 megabit.
So our platform is far superior than than the wireless.
Offers.
So all in all we feel good.
We have good products and.
Although we we embraced competition.
We're we're not doing too bad.
Do you feel you have the ability to kind of.
Maybe anticipate where.
The demand is likely to be and therefore were bell is likely to perhaps.
You know.
Lay fiber and to preemptively move in or is it.
Are they just is it just too hard to to kind of see what competitors are doing and you're just sometimes added to them and sometimes responding.
Well as for Bell.
Hi.
I will.
Redirect you to them due to find out about their plans, but we continue to improve our services stay ahead of the demand curve.
Be very very close to our customers are understanding our markets and.
And keep delivering on a better customer service. So we will remain focused on.
Providing our our markets a better service and I think we'll do very fine with that thank you.
Is there any additional questions at this time. Please press Star then the number one on your telephone keypad. Your next question comes from the line of Matt her Yaghi from day Sheldon. Please go ahead.
Thanks for taking my question I wanted to ask you on the.
Customer base in Canada, and the us and when I look at the U.S. customer base.
Indicate that 48% of your customers.
I have one service with you and 33% pass to services with you.
In Canada. The numbers are 31 was one service and 32 with two services I was wondering what your views are on.
Our cana those customer base slightly to reflect what we're seeing in the U.S. and a couple of years because both.
Both.
Countries are showing trends towards reducing the number of.
Services in one bill.
So the question as well.
The Canadian customer base looks like the U.S. customer base and a few years or there is differences that you think will limit the amount of.
Services that Bill let go as time goes by.
Sure. So the answer is probably in the in the middle.
Basically.
What happens is in the us.
We have the Florida market, where we have some both you and that's where we're going to provide just HSR. So there's some of that.
There's also.
The fact that when we bought metric Ath network has had a higher concentration of single products.
And our approach is to push more bundles, so two and three products.
In the us so you should normally.
That's our plan to be able to have more double and triple plays in the U.S men currently.
And in Canada, we do the same obviously, but as you as you pointed out there is some cord cutting so the single HSR, especially.
Single play.
Typically increases a little bit so the answer is probably a middle ground overtime.
So just one I look at these numbers and calendar that you're.
Are you looking maybe like what's what's your long term distribution that you expect things to settle out is it 40% maybe before with one service is that what is likely to happen.
While these number change all the time and given market dynamics.
After the our competitors are also as planned the demand is changing overtime as content is moving from.
Certain distribution media to others, so there's not really.
Plan other than to quickly adapt to the marketplace and deliver with customer stay ahead of the demand curve and deliver with customer wants. So if they if they want more of a product we will adjust our bundles accordingly.
Okay and.
My second question is on the.
Price increases on elasticities to those price increases in Canada, specifically.
Can you talk a little bit about your views on what what could be remaining potential.
Headroom in terms of price increases going forward.
Are you seeing.
Pushed back more than you've had in the past or.
The price increases are passing.
Normally I was just as they have done in the past.
Yes, I would say there is not really a change with the past.
We're.
Typically what we do in both countries.
We tried to.
While we have video cost increases that we need to pass through and we do provide.
Better value every year and better speeds on Internet. So we are I think customers see the value, we're bringing as well.
And we're trying to be reasonable obviously with what we do in terms of price increasing overall.
And for a portion of the customers that decide to.
Two for example cut the cord and again, it's a small portion, but as we were talking just before.
There's more dollars available there to increase speed on the internet so that money can be.
Can the use in different products basically so.
We see we see capacity for for.
Price increases in the future again being reasonable and.
Making sure that our customers see the value that we're bringing to the table.
Okay and on the restructuring is it in Canada.
How much of that restructuring is fully reflected in your cost basis right now.
It's fully there so the restructuring we did.
About two quarters ago, we were expecting to get $14 million per year.
And the third quarter is.
It reflects basically.
25% of that approximately.
Okay. So is there an opportunity to do something similar in the last or more and the last you'll see it more as an investment cycle right now you're ramping up.
Your your your base so that you can service more customers in the future.
So in the U.S., we operate right now with a very efficient team. There are no reduction we are in the high growth. There is a lot of work to continue the floor the expansion, but also in the Norton and the central areas of our.
Networks.
We we operate in 11 states.
It's a very very wide coverage.
I feel that we have the adequate.
Resources to to provide that customer experience that we want above the competition.
So that's.
That's how we will continue going forward.
Perfect and my last question on.
Your constant currency growth rate than the last.
What would it be without acquisitions.
Well this quarter, you mean for the first quarter.
For the third quarter.
Yes, there is a little bit of an acquisition, we did the fiber lights in the U.S.
It's a very small amount so we did not quantify it but it's less than 1%.
Pretty close.
Your growth is 3.6 as you state that the 1.7 in constant currency.
What would it be if I exclude fiber light.
Oh, you're talking the combined number the consolidated one of the U.S., yes sure but.
We saw good so my what I was expanding as we did not quantify the fiber light impact because it's really small.
So with with the it would have a very minor impact on the on the 1.1, 0.7% revenue growth year over year.
Okay. So it's more like a decimal point on the 1.7.
Yes, it's really small.
Okay. Thank you.
Okay.
Your next question comes from the line of Jeff Fan from Scotia Bank. Please go ahead.
Thank you.
This is actually just a follow up from more of an industry view.
We've seen a limited pricing on mobile being introduced in Canada.
And in the last few years, you've seen a little bit mobile and you us Im curious in the U.S. experience have you seen any of that.
The impact to your cable broadband Internet service.
Not necessarily cord cutting but any impact on your growth in usage or customers are using more.
They are unlimited mobile plans as opposed to their tethering to the watch list or the home broadband.
Thats kind of the U.S. question then the second part is really in Canada was with the introduction of a limited.
How do you position your broadband business to ensure that.
If there is any kind of substitution that doesn't occur in your in your core base.
Thanks.
Ill.
First answer by by reminding.
Ourselves that wireline to wireless.
The.
This is not only just the speed, but it's a volume.
Answer as well so an average home consumed north of 160 gigabit Didnt, Canada, and a little bit more in the U.S., where wireless Lan usually provide two gig three gig four gigs of usage amount. So that there is a huge huge difference in using a wired network versus a wireless network and homes are largely.
Consuming from their wire wired connection or broadband connection and this is here to stay with DOCSIS 3.1, we can offer one gig as you know in.
Technology is evolving is evolving fast cable labs has already a 10 gigabit product.
Waiting to be released so the significant gap between the two.
We'll always called for complementary use of technology wireline and wireless will continue to be used together.
And warrant us is more of a nomadic.
Thing now as it relates to caps and Troughing and which I believe was the early part of your question.
Well we have.
Wireless code in Canada, and as you know right now.
The D. These plans are are challenging the wireless code.
This year TC as has put in place so we'll see what happens with that.
Great. Thank you.
And there are no further questions at this time I turn the call back over to management for closing remarks.
Good well thanks, everyone for participating we are going to be back with our fourth quarter in October so in the meantime feel free to call us. Thank you.
Thank you.
Thank you. This concludes today's conference call you may now disconnect.