Good afternoon, ladies and gentlemen, and welcome to the Proximus Q1 twenty nineteen Results Conference Call. For your information, this conference is being recorded. At this time, I will now hand over to Madam Nancy Gosent, Director, Group Investor Relations. Madam, please go ahead.
Thank you. So good afternoon, ladies and gentlemen, and thank you for calling in. I hope you all well received the documents that we released this morning and that you had some time to go through the results. For this round, we will use most of the time to answer your questions. So we will get to that in a minute.
I have here with me the CEO, Dominique Lourguard and CFO, Sandrine Dufour as well as other members of the Executive Committee. So they will take your questions in a moment. But before we get to that part, we will start with an introduction of the CEO. Please go ahead. Yes.
Thank you, Nancy. Welcome to our first quarter conference call. As announced this morning, over the first three months of the year, we further attracted additional customers to our main products, growing our customer base for fixed Internet, TV and mobile postpaid. We also realized further progress in our foreplay customer base, especially driven by enticing an increasing number of families to our Tutimus and Bisolin offers. As a result, we saw the average revenue per household continue to grow to EUR66.7.
At the same time, we maintained the positioning of our Scarlet brand towards the lower end of the market, addressing especially customers looking for the lowest price and where Scarlet's No Frills offer fulfills their requirements. Besides challenging market conditions, we also face the changing behavior of customers. These are using more and more communication apps instead of traditional voice and SMS. This results in lower inbound revenue, which is reflected in the consumer mobile service revenue, however, with no real impact on our margin. We also see increasing promotional activities and competitive moves in the consumer mobile market, putting pressure on acquisitions.
On the enterprise side, where competition is also very present, we realized another sound quarter with firm mobile customer growth. The acquisition that we have done over the past year has been delivering in line with our expectations. The highly specialized companies provide the necessary expertise to offer meaningful solutions for the digital transformation of our enterprise customers. Thanks to these acquired companies, we posted a further increase in ICT revenues in the first quarter. In Advanced Business Services, we posted an increased revenue for B Mobile, our subsidiary active in the field of smart mobility.
B Mobile also benefited from the contribution of MediaMobile, a company acquired in November and allowing B Mobile to increase its traffic management services to countries such as France, Germany and The Nordics. With positive commercial drivers in both the Consumer and Enterprise segments and revenue pressure partly on low margin income, we kept a sound underlying domestic direct margin growing the first quarter by 0.9%, which in turn drove a 2.2% increase in the underlying domestic EBITDA. The big segment posted a 1.3% increase in EBITDA, including the support of Telesign new services. All in all, this leads to an underlying group EBITDA increase by 2.1% for the first quarter twenty nineteen. Based on recent trends and our expectations for the remainder of the year, we have decided to exclude the revenue from terminals from our revenue guidance.
Revenue from terminals is largely generated through reselling of stand alone mobile devices. This is creating top line pressure while being margin neutral. Therefore, we have refined our revenue metrics for the full year 2019 outlook to domestic revenue excluding terminals. This way, we take out volatility linked to these sales and it keeps focus on where the real value is. For the underlying group EBITDA, we reiterate our stable outlook, including a slight underlying EBITDA growth for our domestic operations in spite of the expected EUR 20,000,000 regulation impact and a decline on BICS results in the remaining quarters due to a progressive insourcing by MTN of their Africa and Middle East operations.
Our CapEx outlook for the year remains unchanged as well, so we expect to end 2019 with CapEx stable to the previous year, excluding spectrum related CapEx. As you know, we are spending an increasing part of our CapEx envelope for the rollout of fiber in Belgium. Today, we are running out fiber in 10 cities, bringing a superfast, future proof network to our customers. As a last point, we also reiterate the intention to return over the year 2019 a dividend of EUR 1.5 per share. With this, I have covered my introduction and propose.
We now start with your questions. Thank you.
We have one first question from Mr. David Wagner from ING. Sir, go ahead.
Hi, good afternoon. Thanks for taking my question. I've got three. First, could you explain us what is the momentum of Epic Combo so far? And roughly indicate us what is the profitability of this offer, say, compared to Tutimus?
And do you see any risk of down trading by Proximus customer or Scarlet customer moving to a bigger combo? So that's my first question. Then secondly, if you could clarify the direct margin increase in consumer, if you could possibly quantify the impact of the different drivers. So you mentioned the better of new mix, the lower commission paid, but also increased digital sales. And then lastly, regulation, can you give us your view on the regulatory change asked by the VIPT regarding high quality networks?
So what could the passive access by your competitors means business wise in B2B, so down the road? And how much does this activity represent in terms of sales for the one affected by the regulatory change? Thank you.
Hi, this is Guillaume speaking. For the first question regarding Epic Combo, of course, it's way too soon to see if it's going to be a hit on the market, but we are quite happy with the first results that are in line with our expectations. On the risk on the downgraded, we don't see a risk of downgrades as we are in starting to segment our value proposition. And as you see in the communication, in the channel mix that we are shooting for Epic, we are really targeting people that are and customers that are really different from the Tutimus or the Minimus of this world. And so far, this is really what we are achieving when looking at the first results.
In terms of margin contribution of these new offers, know, Epic Combo is, I would say, a no fritz offer in some respects with not a lot of additional cost on top of the connectivity and access to the mobile network. I think that for us, it's a very good drivers of margin contribution if we really manage to make this step in combo a success for the group. In terms of direct margin increase at the consumer level, of course, as you saw in the presentation, the positive drivers around broadband, digital TV, mobile postpaid are partly offset by the decrease in prepaid and fixed voice. And then you have some other items like that are more noncore elements around Reminders three that you know is impacting our direct margin since May. In terms of the control of our cost and direct margin cost here, I will maybe take some minutes to explain the benefits of the current digital adoption that we see at Proximus.
I'm going to give you some examples that are favorably impacting the commercial cost and the servicing cost of Proximus. For example, the share of channel increased by 35% year over year. My users, the users that are using My Proximus app, are increased by 38% year over year, and we passed the bar of the million monthly active users at My Proximus this month. At the same time, the volumes of call that are arriving at our call centers are decreasing by double digit year over year. So all the digital adoption is impacting in a positive way the cost to serve and the cost to sell our products at the consumer level.
Concerning your third question and the regulatory change on high quality access, yes, it's true that there is a draft consultation from the BIPT about the fact that we would have to give access on dark fiber and also ducts. But that's, I think, a normal evolution. And we already have offer a dark fiber offer in the B2B, which are already given today as a commercial offer. So I don't think that would have a major impact on our wholesale activity neither or enterprise competition activities.
So you're already offering passive access actually?
Already offer passive access to enterprise customers, yes, to operators active in the enterprise business to Aulus. And
if I may, a very quick follow-up on Epic Combo. Do you plan to complement the Epic Combo with other offer, let's say, with more flexibility on the mobile side? Do you see Epic Combo as a family? That's a bit the sense of my question.
I will not comment on evolution of its offers. And I've got already three different products at Epic. So everything is possible at that front, but I will not comment on evolution of my current
portfolio. Thank you.
Thank you, sir. We have another question from Mr. Ulrich Hatt from Jefferies. Sir, please go ahead.
Go Yes, thank you. So my first question would be, in EBU, you're sort of highlighting the acquisition impact in the B Mobile bit. Could you quantify to what extent the M and A impact in EBU has stepped up on the year on year trends in the first quarter compared to the year on year trends in prior quarters? Is this sort of a material change so that it's more of a boost in the first quarter than in prior quarters on M and A? That's my first question.
Second question, it sounds a bit as if you step back in the first quarter from promotional activity by competitors. So I'm wondering, would you be able to quantify roughly what impact that might have had on your EBITDA trend, the fact that you might have sort of stepped back a bit in a way that you I would assume you sort of get back into it once the market quietens down a bit. So I was wondering of that element of the EBITDA growth. And the last question is on the terminal sales. You're highlighting that it's down a lot.
You're sort of changing the guidance. I mean you're saying it's low margin, so it doesn't really matter. I'm just wondering, is there any adjacent relevance of this Daimler sales business to the third party distributors in particular? Is this a question of sort of finding these people closer to Proximus? Or is this really a completely stand alone business that you can simply cut it well without any material impact on the core business?
Thank you.
Okay. So it's Jean Rin speaking. I'll take your first question regarding the M and A contribution in our Q1 numbers. If I measure this relative to our total revenue group, contribution of M and A is south of 1%. Now if I take it in terms of EBITDA, it's lower because bear in mind that these are ICT activities with more people intensive structure.
So in terms of OpEx, it's clearly more than 1%. So net net contribution of EBITDA, it's lower than revenue.
On the promotional activity, I would say that traditionally, Q1 mobile postpaid and commission means are not the most intense quarter of the year for Proximus. We used to have a very strong marketing and commercial Christmas period, and we usually try to be more disciplined during the first part of the year. But we are not going to give some precise impact on the at the EBITDA level. As I said previously, what we see, however, is a good positive impact on the digital adoption linked to e servicing and e share of channel for all the Proximus servicing and sales activities.
And so on the terminal sales, I think it's more a historical business we have had where new device provider came to the country very often. They ask Proximus to sell the device to be able to gain quickly distribution. I think today, the terminal sales market is more mature. So they want also to take part of the business themselves. And to be honest, for us, it's a business with, we say low margin, I would say low margin.
And there is no real advantage today to continue to have the business on a standalone. What we, of course, continue to do very intensively is to sell devices when we have joint offer because there, the devices are linked with connectivity, and that makes sense for us. So that part will certainly keep. The rest will probably gradually decrease. And that's also one of the reasons why we wanted to give guidance without the terminal sales in a market context today where there is lower terminal sales evolution, I think, overall in Europe.
Very helpful. Can I follow-up, please, on the second question? I understand there are seasonal effects, but that's not the core of what I'm interested in. I'm really wondering, is there in the first quarter an effect that you saw competitive activity that made you decide to step back a bit? Because that was my understanding from the report.
And I'm not entirely sure whether you're saying that's simply not the case.
No, it's because of competition that we decided to step back. It's more traditionally, as I said, a period where we are less active on the market, and we are more concentrating our efforts to value customers and to master and control the churn rate. And this is why we put in that period more effort on conversions products, more effort on value customers and more effort on churn rates. As you see also in the performance, the growth in performance is quite okay. And if I look at mobile drivers, if you look at the mobile churn rate, it's a decrease year over year.
So we really focused on churn control, value customers and developing our broadband customer base, which is key for the future of our strategy.
Great. Thank you very much for your time. Thank you.
Thank you, sir. So we have another question from Mr. Matthijs van Lejenhorst from Kepler Cheuvreux. Please go ahead.
Yes. Good afternoon. First question is on the EBITDA. If I look at the EBITDA growth for domestic, 2% up year on year, but you still keep your guidance on flat EBITDA. Could you shed some light on the development of the EBITDA for the remainder of the year?
And the second question is, could you tell us how the discussions with the unions are going?
Okay. So Sandrine speaking. I'll take your first question on EBITDA. I think what's important to probably highlight is the specific seasonality of our EBITDA over the year. While sticking to our guidance of a slight growth at the level of domestic and stable at the level of the group for EBITDA, think it's important to remind everyone the fact that last year, our Q2 EBITDA growth was more than 6% at group level, more than 5% at domestic level.
This was based on a strong direct margin growth. We, at the time, highlighted the fact that it included positive settlements with suppliers. So that was clearly a one off that will not repeat. But also highlight the fact that in Q2 last year, our OpEx base was the lowest of all quarters, both domestic and group level. For domestic, it was lower than €400,000,000 And so we do not expect to see growth in Q2.
We expect to have a decrease of our EBITDA in Q2. I prefer to be very clear. That's clearly a seasonality effect. But clearly, as I said, no impact on the fact that we guide stable EBITDA for full year and slight growth for the Domestic ParaMed.
A quick follow-up. Could you remind us, obviously, you're still targeting these €150,000,000 indirect cost savings by the end of this year. What is the current run rate? How many savings can we still expect? How much?
We are in line with the expectations of the yearly guidance we gave on cost savings. I think the comment that Guillaume made specifically on the digital drivers behind delivering on efficiency proved to be effective in Q1 and we're tracking well on plan there. Okay. So on your second question, discussions with the unions. I mean, we started indeed a discussion with the union January with thirteen full days of discussions with them where we informed about all the plans we have for the coming three years.
We after that had a small break where the unions asked for a break so that they could come themselves with some proposals. This phase has just been or is being finalized where we have received some suggestions from the unions. We have responded to those suggestions last week. And so normally now by having both or wishes and the wishes of the union, we should be able to start a negotiation in the coming weeks by bringing the two sets of elements together. So I would say it's a long process and I know it brings quite a lot of uncertainties in the company, but I think so far, it is quite a normal process of information consultations.
And I really hope that in the coming weeks, we will be able to go into the real negotiation phase so that we can really then discuss about an outcome for the next year and a new HR framework and also an important cost reduction linked to decrease of task in a company.
Dynamics around your unlimited data packs? Do you see more migrations or more acquisitions in your net add mix? My second question is on EBU. I can see that churn has picked up in Q1 compared to Q1 last year. So should we read this as a kind of a sign of a growing competition?
Or is it linked to a specific contract? And my third and last question would be following up your comments, Dominik, on the negotiations in the coming week. How much of the government do you need to get into negotiations and eventually a final decision? Do you have to wait for the general elections and eventually a government to be formed?
On the first question, Nicolas, the only thing I can say to you, I can disclose that the share of high end products is increasing year over year and quarter after quarter. So we have a nice impact in terms of value mix of this unlimited data pack. So it's more improving our value mix than other things. And with a nice improvement of iShares pack within the total the total sales of Proximus.
Okay. And
on your second question, EBU churn, it's I assume you're referring to mobile. So indeed, there is a slight increase. So in 2018, we had 9.7%, now we have 10.8%. I think it's still fairly reasonable, but indeed there is a slight increase. And indeed, this is linked to growing competition.
That I mean, competition is getting more aggressive. And so that is linked to competition.
And so on your third question, the union discussions, I mean, everything what we have proposed in terms of, let's say, which list and intentions together with the unions are elements we can implement without any intervention for the government. So I think the whole plan we have put forward is not dependent from election or from having a new government or from any new law. So I think that it really should be that we can implement everything without by ourselves, I would say, as soon as we have an agreement with the social partners.
I see. That's clear. Thank you.
Thank you, sir. We have another question from Mr. Michael Bishop from Goldman Sachs. Please go ahead.
Yes, thanks. Just two questions from me, please. Firstly, on B2B, I was wondering, following on slightly from the earlier question, whether you could sort of comment on what the B2B growth would be excluding the M and A? And then I'll just sort of follow-up on B2B. Generally, we're seeing trends deteriorate or be very weak at other incumbent operators, and Proximus has held up very well for quite a number of years now.
Clearly, some are more proactively migrating to All IP. Do you see any sort of material differences between your B2B strategy that mean that your current levels of growth are more sustainable than peers that we should factor in? And then just as a quick follow-up on the mobile side, have you thought at all about potential tower sharing in Belgium? We're seeing a number of tower sharing deals being announced across the rest of Europe. And clearly, we've had a bit of a surge in terms of independent tower ownership, but we haven't seen anything in Belgium.
So it'd be interesting to get your thoughts. Okay.
So on your first question, the impact of M and A and excluding M and A, Sandrine already answered by stating that the M and A has only a 1% impact on the total group. In terms of EBU, it would mean, we have now a growth of 1.6%. It would bring it slightly I mean, a little bit down against year over year, but I mean, it's almost flat. That's the impact. Then how is Proxima, I mean, holding up in B2B?
It's not it is as I stated before, it's a one reason and it's not a single silver bullet. There is a lot of hard work behind that, but the main element is that we are fulfilling our ambition of becoming the trusted partner of our customers in the digital transformation. And that is and so go beyond connectivity in bringing value to our customers. And that is also the reason why we did the acquisitions in the past two years to bring up our relevance to our customers, be it in security, be it in data integration, be it in moving into the cloud and the different elements. And that is clearly valued by our customers that we are partnering with them in the digital transformation, which makes that we sustain our business in that environment.
Just as a follow-up, tying those two things together, do you think that that would have been a lot tougher without the M and A you've done? Because I guess other incumbents potentially haven't done as much M and A to particularly bolt on the security and the cloud aspect.
I'm convinced it is because as I said, we have done with M and A. I mean, were not companies that were for sale. I mean, we have been screening the market, looking for specific capability skills that we believe are important to fulfill our ambition of being that trusted partner in digital transformation. So they are indeed key in growing that relevance and so being that partner of trust to our customers.
Okay. Regarding your questions on the tower sharing in Belgium. In Belgium, there is already a regulation that requires that all operators can have access to the towers of the others. So today already, we have we are hosting our competitors on some of our towers, and we are also looking at opportunities to be hosted on towers where new towers are being built by our competitors. So that's currently the structure, which has been effective for quite some years now.
Thanks. And just in terms of can you update us on how many towers you have and whether you sort of see them as strategic longer term? Thank you.
We've not disclosed the number of towers we have. So it's few thousands, I mean, proportionate to the size of Belgium. And we've not considered the disposal of our towers so far. Remember that I tend to look at this with the cost of financing and any deals in this respect is attached to a cost of financing, which is way above the level of debt that we're currently paying with our current net debt to EBITDA.
Thank you, sir. We have another question from Mr. Ruben Devos from KBC Securities. Sir, please go ahead.
Yes. Good afternoon. Thank you. I got one on IT. So following some of the M and A activity of your peers on the IT side and the dynamic that we see in the enterprise segment for Proximus,
I was curious whether you
could give some color on the value of providing IT services and connectivity to B2B customers and maybe how you've seen the overall take up within the various segments such as SOHO, SME and the large enterprise segment. The second one is related to five g. We've got a delay on the five g auction, potentially. We got the uncertainty following the elections. Maybe we're gonna have an auction late into 02/2020.
So I was wondering, you know, how how would all of that affect your road map in deploying five g? And then given the requirements to densify the mobile network, could you give a rough indication of what needs to happen basically in terms of emission standards and building permits in Belgium to be able to deploy next generation mobile technology? Thank you.
On your first question, as I said in the earlier question, so the value of the acquisitions is for me when I say the most important value for me is that it increases our relevance to our customers. It increases our relevance in terms of being the trusted partner in their digital transformation. And for instance, the investments that we have been doing in security and also with the acquisition of Da Vinci Labs has reinforced our security offerings and services. So that, for instance, in Belgium, we have been able to win the most important security deal with Fault Finance and Fault Justice, which we would not have been able to do without them, and they would not have been able to do it without us. So that's why I'm saying this relevance is very important.
Next to, of course, the value in terms of value for us, ICT has become a very important business for us. Last year, we did more than EUR $05,000,000,000 in ICT. So it's also a growth source for us. But at the same time, as I said, it's also a differentiation and value creation for our customers.
Okay. So and on your question of five gs, I mean, yes, indeed, the spectrum auction has been delayed. It will have to be taken care of by the new government. So we think at the earliest we could have auctioned indeed in 2020 and most probably 2020. So does it affect our roadmap?
Think partially yes, but what we also need to say is that today we have test spectrum and that we can already do some tests on five gs. So in that sense, we think if the new government can make diligence of the new spectrum auction once they are formed, the delay is very much manageable. And I think what will be probably a bigger handicap on the five gs will be the radiation norm of Brussels, where we had hoped to have a changing law before the election and that has not been able to happen. So I think probably on the roadmap, my bigger worry is probably the radiation norm in Brussels versus the spectrum auction because there we can still do test and we do some work with various suppliers to move on the five gs. Concerning what you said, densifying our network, I mean, in the road map we currently have, we do not foresee to do small cells on five gs in the coming years.
The most deployment we have foreseen is mainly on the macro side. So to that extent, we do not depend so much on new permits. So there, I think as well, we will be able as soon as Spectrum will be available to deploy most of our five gs roadmaps on the macro side we currently have. So that's not so much affecting the rollout of our conference process. Thank you.
Thank you, sir. We have another question from Mr. David Wright from Bank of America. Sir, go ahead.
Yes. Hello, guys. Just to get a little better understanding on the sort of revenue dynamic. You've guided for the nearly stable revenues excluding the terminals. I think you're running a little bit below that.
This quarter, I think it's around about 0.9% or so down. Now my understanding is you've obviously got some regulatory headwinds, the international calling, that strips some service revenue away from Q2 onwards. And obviously, the commercial momentum in Q1 has possibly been a little bit softer than well, maybe than we expected, perhaps not yourselves. But given you've had the softer start commercially, given that you've got more headwinds coming from regulation, how do you turn the sort of 1% decline in Q1 around? What are the sort of major drivers of the stronger revenue outlook, please?
Well, the I just remind that the guidance for the revenue is for the Domestic Perimeter, nearly stable. So in that sense, with the current dynamics and with the expectation that we have, the fact that we still have some growth in our volume base and some elements that will disappear. I think Guillaume was mentioning the reminder fees. As of May, this is disappearing. Of course, as you said, the international courts will replace this, but it's not coming on top.
There are a couple of elements which gives us the comfort to maintain the nearly stable revenue guidance for the balance of the year.
That's so you saw it again. Maybe my semantic understanding is nearly stable, I guess, up for negotiations. Thank you very much.
Thank you, sir. We have another question from Mr. Stephane Genoux from Degroof Petercam. Sir, please go ahead.
Yes, good afternoon. Two questions. A follow-up on ICT, underlying growth is more or less or revenues are more or less stable. Could you give more color on the underlying dynamics within ICT, which activity is growing, which other activity is declining? That's one.
And then on the fiber rollout, you indicated that you're in 10 cities currently. Could you indicate what CapEx is related to that? And how do you see the step up in the coming quarters with what, for example, is given the workforce requirements you need, what would be your maximum quarterly or yearly run rate? Thank you.
On your first question, first of all, for us, of course, as I said, we have been investing in ICT in different areas where we focus on those areas that bring the highest added value. And I would say very often, they are also the ones that have the fastest growth. So if I take again security, security in the digitized world becomes more and more important. So it's clear that that is an underlying growth that is quite important. But we have also if I take application integration and application moving to the cloud, it's another one that is quite important.
If I take the one that is around, so it will be wind in terms of business analytics and network and IT operations. So there are different ones. I mean, the ones that are less growing are of course the on-site infrastructure ones because very a lot of companies are moving into the cloud and that is also why we are offering a hybrid cloud offering with as well on premise or in our data center or in the public data centers being Azure, AWS or Google Cloud. So I would say the more traditional ones are replaced by the more digitized ones. It possible to give
an indication about the breakdown in what we could call more traditional business of ICT and then the more new growing technologies?
No, we don't give that breakdown. By the way, it's not so easy neither to make that breakdown, but we're not disclosing that one.
Okay.
So on your questions concerning fiber, I think the figures we have given on CapEx was longer term, one third of our CapEx would be invested into fiber. We are not at that level yet, but that's still the guidance we gave. So we can we currently follow the plan. We have, I think, in terms of manpower, as you mentioned, we secured the manpower for this year. And we have said that we would most probably come back at the end of the year with a further view on the plan.
I think today, it's a bit too early because we first want to make sure that we have a full view on the regulation, which is foreseen by second half of the year. So anything around potential acceleration of the fiber plan will be decided in the second half of this year and will, of course, be communicated at that time to the market.
Thank you.
Thank you, sir. We have another question from Mr. Paul Sidney from Credit Suisse. Sir, please go ahead.
Thank you very much. I just had three questions, which I think mostly follow on from questions we've had before. Firstly, just on the consumer line loss comment. You said they were exceptionally high in Q1 twenty nineteen. I'm just wondering if you could just tell us why that was or why you think it was exceptionally high.
And by describing it as exceptionally high, does that mean that you expect it to improve in the next few quarters? And then secondly, just on the consumer subs growth slowing in the quarter, you mentioned stepping back from promotional activity in Q1. Does this suggest that Proximus' priority is shifting to focus more on profitability rather than pure subscriber growth? And then just lastly on fiber regulation, with the wholesale rates moving to a cost based model, do you think that's likely to stimulate any new interest in reselling your fiber? And indeed, have you been actually approached by any resellers looking to resell your fiber products?
Thank you.
On the first question regarding fixed voice line loss during this quarter, I think there are many two elements. First, we saw the continuous erosion of the fixed voice standalone customer base, and this is something that will continue in the coming quarters. But in this quarter, we saw we witnessed a combination of elements that we do not expect to be repeated in the coming quarters around an accelerated migration from legacy to cloud based voice solution in the SA market. And I would say also a strong performance on multiplayer offers without fixed voice, which has no impact on margin contribution, as you know. But we do not expect those trends to be continued in the coming quarters.
So we indeed do not expect the weak one performance to be repeated in the coming quarters regarding Fixed voice losses. On your second question on Consumer Operations, we are not shifting from a strategy at all. We have our long term view in shifting all our business operation to more digital ways and to bring more services on top of connectivity for the consumer business unit. This strategy will remain and will continue to be executed. As I said, Q1 is not our best quarter traditionally, and this happened that year again.
But we have a number of initiatives that is that are currently ongoing. I would mention the revamped prepaid portfolio that we launched in March. As usual, in Q2, we could be more presence of the Proximus marketing in the market. And as you saw in Q1, and it's going to be continued in Q2, Q3, our focus on churn, I think it's a clear priority. And with all that, we expect to improve our commercial momentum in Q2, Q3 as we usually do every year in Q2, Q3 compared to Q1.
Okay. And concerning your fiber, I think so far, the first indication we have on the cost model is very much in line with the commercial price we currently have for the fiber to the home part. I mean, today, we have already 15 players that OLOS that are buying of fiber. So most of the people active on the Belgian market is OLOS are buying fiber at Proximus. On the fiber to the home business, I probably think the only one who is not currently buying fiber from Proximus is Orange, and we are, of course, very open to sell them our fiber if they would be interested.
Can I
just have a quick follow-up? I'm not sure if I've just missed this, but have you actually given an absolute figure for your the number of homes passed that you've passed with fiber now? You've always been building for a couple of years. Just wondering if you can give us an absolute figure or even a percentage figure.
No, I don't think we have given figures. I think what we have said is that we want to double the number of installed lines in 2019. So we have an acceleration of the Home Pass. I think so far, we haven't given a number. They are still quite small, to be honest.
I think you will see that as from this year, we will really accelerate. You know that our fiber plan was first focused very much on the enterprise market. And we have covered around 50% of all the industrial zonings by the end of last year, and we are continuing to do that. So the focus is still more on that. And on the fiber to the home, we will double the installation this year, and we will continue to accelerate it as from next year, but we haven't given any absolute number so far.
Understood. Thank you very much.
Thank you, sir. We have another question from Mr. Emmanuel Cladier from Kempen. Sir, go ahead.
Hi, good afternoon. Two questions. One on the wholesale rates, which are under review. So far, there is no not really a tiering based on data usage. Is that something that you believe that will be picked up by the regulator?
And then secondly on fiber, yes, the question has actually already been answered. But I think three years ago, you mentioned that you could not roll out fiber quicker than in your current plans. Has that changed? And if so, how long would it take to go to 100% fiber to the home penetration in Belgium? Thanks.
So just on your first question, I mean, for me, it's not clear your question. You are talking about tiering on data usage?
Yeah. I yeah. So the the whole the cable wholesale rate actually, but also the fiber wholesale rate, I think so far, you'd have a pricing for broadband separately, broadband plus TV, and then it depends on speed. But if you sell a broadband standalone product, I think a kind of wholesale rate depending on the data usage would also make a lot of sense. So do you believe that this will be included in the decision of the regulator?
No. To be honest, I think so far the only thing we have seen is if there is a price tiering, which is based on speeds. And of course, have two components on the regulation of the fiber. You have a cost model where you have indeed a small difference based on speeds. And then you have the whole concept of fair margin, which will be applied on top of cost model, where the first time that we have heard from the regulatory that will enable to have tiering on the cost base model.
So I think the element of cost model plus fair margin will enable us to continue to do tiering. But so far, the tiering that is foreseen is mainly on speed and not on data usage as for what I know. And on the fiber rollout, I think I just indeed answered the questions that a quicker rollout will be decided in the second half of this year when we'll have more clarity on mainly on the regulation. And we still need to assess, I mean, how fast we can go. The main to be honest, the main constraints we will have in terms of if we want to go faster will be the capabilities and the manpower, which will be available in the country and that's still to be assessed once we would take the decision.
Okay. And any recent data you could share on the uptake of customers in the fiber to the home footprint? Or is the sample still way too small?
No, I think what we can say is that currently, the uptake is in line with roughly in line with our expectations. We have a longer history of take up rates in the zone where we call greenfield, so where we build new houses and we come with fiber, where there we have a very good uptake. The uptake is a bit lower in what we call the brownfield because there, of course, it's all go on migration and win back and that's taking a bit longer, but it was also foreseen in the plan that in zones where you replace copper by fiber, the uptake will be a longer term in line with what we have in greenfield, but that will take a bit more time to get there as we don't force migration. So I would say so far in line with the expectation, but no very precise figures that we can give already today.
Yes. Okay. And maybe coming back on my first question as well. Don't you believe there should be a tiering based on data usage? Because if you can have access at, I don't know, 20 and everything is going via the data network, then that could be quite disruptive for Proximus and Telenet for the network owners?
Are you not scared by such a potential move?
I think so far the offers you have on the market on Internet, most of them are unlimited offer with a super, with a fair use policy. It's only the very low end Internet offer that are limited. So I think so far there is not even in the consumer price, and I'm referring to that as a way to benchmark benchmark the wholesale, there is not so much tiering on data usage on the Internet side. It's only the real entry offer where you have a limitation to 100 gig or 150 gig. And for the rest, it's more unlimited where ships.
So I think it would be quite it's a good idea, but I think it's difficult to replicate as in retail part, we don't have these data usage so far.
Yes. Okay. Thanks a lot.
Thank you, sir. We have another question from Mr. Uli Khatt from Jefferies. Sir, go ahead.
Yes. Thanks very much. I don't want to entirely labor the point. I would just like to come back to the earlier question on sort of the consumer commercial spending and market activity compared to the competitor sort of activity and the results. I mean it looks to me, if I sort of look at the slides summarizing your volume KPIs in Consumer separately, that on a year on year basis, the Internet intake has halved, the TV intake has halved.
And I think it was discussed earlier that the fixed voice intake in Consumer separately was also very, very weak. And now in the mobile data, we have only 1,000 instead of 12,000 mobile net adds. So on all the major volume KPIs, the year on year trend is actually down a lot. On the other hand, sort of we're seeing this commentary here about direct margin benefiting from lower commission spending. And sort of you when asked about this, you sort of you seem to say that it wasn't really you stepping back.
So I'm wondering how does this fit together? How does it fit together that all the volume KPIs sort of have this dip on a year on year basis that you're not suggesting you step back and on the other hand, the margin is up? I'm still not entirely sure I get the picture there. Thank you.
Perhaps I can try to give another light on the Q1 results. I think, first of all, we had very strong net adds and activities in Q4. And I think as well our operational activities in Q4 were very much well run. So we didn't have a lot of our Q4 customers that had to be installed in Q1. So I think that's explaining a bit of it where most of the sales on Q4 were strong sales and were also installed in Q4, where in the past year, we sometimes had some spillover from Q4 to Q1.
For the rest, I think Q1 has been indeed a quarter where we have not so much focus on promotional activities. The other competitors has focused way more on promotional activities, also a lot of Internet promotion that's probably less visible for you as analysts, but there has been quite some aggressive promotional activities in the digital space from competition. We decided not to react on that. For instance, there has been quite a lot of promotion on mobile at EUR0 on WIGO of Telenet. So I don't think we should follow acquisition at EUR0.
There has been very aggressive promotional activities from Orange on their unlimited and also on base on their unlimited at half price, which are extremely value destructive promotions. And we decided at Proximus not to follow that route and indeed to be resilient on what happens on the market. Therefore, indeed, you have some lower KPI on the first quarter, but I think competition cannot continue to to have acquisition at half price or at EUR0. And we have a quite normal promotional activity plans, which is foreseen on Q2, Q3, Q4. That's why we are quite confident here to maintain our guidance and to say Q1 has been indeed a bit weak versus high competition activities, high competitive activities.
But we still think that on Q2, Q3, Q4, we'll be able to post our normal KPIs as we have done in the previous year. So that's I mean, we turn it in a lot of different elements. I just think the reality is Q1 indeed weak in figures, but due to very aggressive offer of competition and I think strong Q4 net adds of 2018. And we think Q2, Q3, Q4 will be way more balanced because we also have our plans and I don't think competition can continue to give aggressive promotion half price over €0 Okay.
Now that makes perfect sense to me. Thank you very much. Thank you.
Thank you, sir. We have no other question. I give you back the floor.
Thank you all for calling in, and thank you all for your questions. Should you have any follow-up questions, you can contact the Investor Relations team. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.