Good day, everyone, and thank you for standing by. Welcome to the Quebecor Inc.'s financial results for the fourth quarter and full year 2023 conference call. I would like to introduce Hugues Simard, Chief Financial Officer of Quebecor Inc. Please go ahead.
Ladies and gentlemen, welcome to this Quebecor conference call. My name is Hugues Simard, I'm the CFO, and joining me to discuss our financial and operating results for the fourth quarter of 2023, and also the full year 2023, is Pierre Karl Péladeau, our President and CEO. Anyone unable to attend the conference call will be able to listen to a recording by telephone or webcast. Access details are available on our website at www.quebecor.com. The recording will be available until May 22nd. As usual, I also want to inform you that certain statements made on the call today may be considered forward-looking, and we would refer you to the risk factors outlined in today's press release and reports filed by the corporation with the regulatory authorities. Let me now turn the floor to Pierre Karl.
Merci, Hugues, and good morning, everyone. Oops! Sorry, my clock.
Let's go.
First off, I have to say, what a landmark year 2023 was for us at Quebecor. In the Canadian telecom industry, 2023 will go down in history as the key turning point when we disrupted and changed the wireless landscape in Canada as the fourth national operator, finally blowing to pieces the quiet oligopoly of the big three competitors, as we did in Quebec more than 10 years ago. In the media sector, we were the first to recognize that we needed to execute a complete rethinking of how to operate media activities in a globally competitive and strategically challenged new reality. We are proud of our accomplishment this year and perhaps even more satisfied with the strength of the basis we have now put in place to support our growth for the long term.
Much hard work and competitive sparring remain ahead, but we are clearly on the right track to continue to succeed. Of course, the defining event of our years was the completion of the acquisition of Freedom Mobile that took place on April 3rd. The impacts are already being felt in the market and to the direct benefit of all Canadian consumers. In only 9 months short, despite the expected warm welcome from the incumbent operators, we immediately announced our intention to offer a more competitive mobile telephony environment. We then proceeded to, first, increase by 10% domestic data packages to all existing Freedom customers. Second, freeze prices on all existing plans for all current and future customers. And third, launch on July 27th our 5G services and significantly improve our network connectivity to nationwide coverage, seamless handoff, and affordable international mobile plans.
With that wider and faster 5G service coverage, Freedom reaches more than 12 million Canadians in Greater Toronto, Calgary, Edmonton, and Vancouver areas, as well as in other cities across Ontario, BC, and Alberta. We will, of course, continue to roll out in new markets over the next months. In addition, we will progressively add further improvement to the Freedom offerings, such as attractive multi-services bundles and a smoother digital user experience. Of course, we expect systematic interference from the incumbents, as we have been used, unfortunately, for too many years, and we expect to have to call upon the CRTC and ISED to intervene and accelerate the process of bringing in an additional telecom provider to shake things up for the benefit of all Canadians.
Capitalizing on the new regulatory and MVNO framework, we announced just a few days ago, the launch of our MVNO service in Winnipeg, as well as in a number of other cities, with a phased expansion plan over the next month that will make our services available to millions of additional Canadian consumers, giving them access to more choices, lower prices, sorry, and better service. As we became the fourth major wireless carrier in Canada, expectations were high. The government and regulatory authorities want to see more competition, more investments and lower prices. As clearly demonstrated by December Canadian Monthly Consumer Price Index, the CPI, the impact of Quebecor's strategy and action on Canadian wireless service prices are undeniable.
Since April 23rd, when Videotron acquired Freedom Mobile, wireless prices have declined by more than 27%, and from December 2022 to December 2023, the wireless services CPI decreased by more than 26%. These results clearly confirm that we have not only delivered on our promises, but we have surpassed these high expectations by combining Videotron's proven expertise and successful track record in Quebec with Freedom's highly skilled and agile team. True to our commitment to offer Canadian consumers more choices by continuing to build a reliable and high-performance wireless network, Videotron announced late last year a CAD 299 million investment to acquire 2,305 blocks of spectrum in the 3,800 -MHz band at the latest Science and Economic Development Canada's auction.
This strategic and measured addition brings our total investment to just over CAD 1 billion in the 3,500-MHz and 3,800-MHz bands, putting us in a favorable position for our continuing 5G deployment. With the acquisition of Freedom, we managed to record 230,000 wireless net adds in 2023, bringing our total mobile customer base to 3.8 million customers. As expected, we have witnessed a significant increase in competitive and promotional intensity over the Black Friday and holiday season. Despite that, we posted a fourth quarter record of 66,000 net additions, fueled by a strong performance by all our three brands, Videotron, Fizz, and Freedom. The latter, as a result of the new improvement and benefits implemented in only nine months.
We have achieved this growth despite immediate and fierce retaliation strategies from the incumbents, who didn't hesitate to offer their packages at much lower prices in Quebec, in a clear, but I should say, unsuccessful attempt to slow us down. As expected, annual wireless ARPU decreased by CAD 1.72 at CAD 37.44, mainly attributable to the dilutive impact of Freedom prepaid services, Fizz lower ARPU, as well as the overall competitive intensity I described earlier. I should mention that contrary to our competitors, we have not changed our ARPU calculation, either by a definition tweak or customer base exclusion. To the benefit of all Canadian consumers, we expect to remain aggressive so that more and more Canadians can enjoy our great mobile services and benefit from our efficient and customer-oriented approach.
Churn rate on postpaid customers increased by 0.3% this quarter, strictly due to Freedom addition, and importantly, all our brands experienced lower churn in Q4 2023 versus Q4 2022. We said we had a plan to reduce churn, and again, we delivered, posting the best churn performance in the industry. Excluding Freedom, our churn rate would have changed, sorry, would have improved by 10 basis points compared to the same quarter in 2022, demonstrating the strong performance of our two brands, Fizz and Videotron, in the Quebec market. Wireless revenues increased by 84% during the year to CAD 2.05 billion, and wireless EBITDA reached CAD 833 million, up 65%, of course, due to the addition of Freedom Mobile revenues, as well as increases in service revenues and equipment sales.
On the wireline front, we continue to generate revenue growth and, more importantly, managed to increase our cable revenues and gross margin as compared to last year, in the face of particularly hostile retaliation measures taken by our longtime competitor, who offers internet and bundle packages at an all-time low price that are 40% below the prices for the same package outside of Quebec. How long will they remain—will they maintain this almost shameful disparity between their own customers? I will not venture an answer, as these repeated behaviors seem to be how they choose to operate, but I can't help but wonder why Bell is so, is so terrified by the new CRTC FTTP rates of approximately CAD 70, CAD 70, excluding consumption, when they are offering the same service at a much lower monthly rate, more than CAD 30 lower in some cases.
So despite this fierce environment, our broadband services customer base increased by 6,000 net adds in the fourth quarter of 2023, for a year-over-year growth of 25,000. We continue to be very disciplined in our pricing strategy, and this translates into a remarkable internet ARPU improvement of CAD 0.57 in 2023. We will continue to focus on pricing optimization and strategic positioning of our brands to preserve margin, to overcome the dilutive effect of Fizz and lower plan mix, and to maintain our profitable growth trajectory. While our competition only talks about speed or the illusion of speed, I should say, Videotron reputation for the quality of its customer experience is unquestionable. In 2023, Videotron received several distinctions on that front. Too many to go through them all, but highlighting the recent Léger WOW! Index survey in 2024, where Videotron offered the best in-store experience in Quebec.
In addition, Fizz placed first for online experience in the Canadian telecommunications industry for the fifth year in a row, according to the same Léger survey. These distinctions attest to Videotron's unique and privileged relationship with our market and our clients. As we continue to grow and expand across Canada, we are committed to raising the bar and bringing the same stellar standards of service, performance, and experience to all Canadians. Turning now to our media segment. Our 2023 results were severely impacted by a very difficult advertising market that shows no sign of improving anytime soon, a significant decline in studio business due to the actors' and writers' strike in the U.S., and a static regulatory environment that continued to put us at a disadvantage in our fight against the web giants and the national broadcaster.
Groupe TVA experienced decrease of CAD 49 million in revenues and CAD 25 million in EBITDA for the year as compared to 2022, leading to a negative EBITDA of CAD 5 million . As you know, the audiovisual and media landscape throughout the Western world is undergoing profound and unprecedented changes as a result of the globalization of television viewing, driven by the proliferation of on-demand digital broadcasting platforms and the tectonic shift in advertising spending to the web giants. These are no short-term changes, but a long-term trend that is reshaping the broadcasting ecosystem and forced us to take unprecedented, unprecedented actions to rethink how we will operate our media activities in this new reality. TVA has historically been a beacon for Quebec culture, language, and news. We have a duty to preserve it and ensure its sustainability.
The difficult, yet necessary, measures we announced last year are changing the way we do business, to withstand the market pressures and to face the competition. We are refocusing our activities, reducing our operating costs, and concentrate on the strength that set us apart and make TVA, Quebec's favorite television network. We will continue to invest in original Quebec content and to bring all Quebecers reliable coverage of news and major sporting events. As a matter of fact, the positive impact of our continued significant investment are clear with Groupe TVA increasing its viewing market share by 0.2, in viewing market share to reach 41% as at December thirty-first, sorry, double that of our competitors. As we adapt to the new market reality, we remain the undisputed reference for news and entertainment in Quebec.
Finally, our sports and entertainment division maintains its momentum, with revenues and EBITDA of CAD 213 million and CAD 23 million, respectively, for the year. Major shows at the Videotron Centre include KISS, Shania Twain, and Michel Sardou, were great successes in the last quarter. Before turning to you for the financial review, I would like to point out our continued balance sheet discipline, as demonstrated by our ability to repay more than CAD 400 million of net debt and bring our net debt to EBITDA leverage ratio down from 3.6 to 3.4 in just 9 short months since the acquisition of Freedom Mobile. Our clear intent is to continue to delever over the next months, to get our investment-grade rating, and to sustain a leverage ratio in the low 3x area.
Contrary to our incumbent competitors, who continue to enjoy IG status and operate with a leverage ratio at least 0.3 x higher, sorry, 0.3 x higher than our, than ours, with no tangible signs of improvement. I will now let Hugues review our detailed financial results.
On a consolidated basis in the fourth quarter of 2023, Quebecor reported revenues of CAD 1.5 billion, up 27%, and EBITDA of CAD 565 million, up 17%, and adjusted cash flows from operations of CAD 396 million, up 10% from the same period last year. Our telecom segment generated CAD 399 million in adjusted cash flows and an 11% increase compared to the same quarter last year. EBITDA also increased 17% to CAD 559 million. Revenues reached CAD 1.3 billion or 35% increase compared to the same quarter last year. In addition to Freedom Mobile, which accounts for most of the increase, our Videotron and Fizz brands continued to deliver growth in both wireless and internet service revenues.
Telecom CapEx spending, excluding the acquisition of spectrum licenses, was up CAD 45 million in the quarter and CAD 80 million for the full year, as compared to the same periods in 2022. This variance is essentially due to the integration of Freedom Mobile, as we remain on guidance for 2023 for key initiatives such as LTE Advanced and 5G, network extensions, and geographic expansion in all markets. For 2024, we will remain disciplined and strategically continue to invest on 5G technology, new revenue growth opportunities in targeted areas, and maximizing our return on our investments, maintaining our competitiveness and staying committed to our strategies. Our media segment recorded revenues of CAD 205 million, a 5% decrease, and EBITDA of CAD 14 million, an 8% decrease compared to the same quarter last year.
Our sports and entertainment segment revenues grew 4% to CAD 56 million, and EBITDA was down 1.5% to CAD 2 million in the quarter. Quebecor reported a net income attributable to shareholders of CAD 146 million in the quarter, or CAD 0.63 per share, compared to a net income of CAD 143 million, or CAD 0.62 per share in the same quarter last year. Adjusted income from continuing operations, excluding unusual items or gains or losses on valuation of financial instruments, came in at CAD 168 million, or CAD 0.73 per share, compared to an adjusted income of CAD 159 million, or CAD 0.69 per share in the same quarter last year.
For the full year, Quebecor's revenues were up 20% to CAD 5.4 billion, and EBITDA was up 16% to CAD 2.2 billion. Total annual revenues from our telecom segment reached CAD 4.7 billion, representing a 25% increase, while EBITDA grew 17% to CAD 2.2 billion in the same period, an improvement of CAD 317 million over last year. EBITDA margin stood at 48%, and on the OpEx side, the increase of 29% this year is due to the consolidation, of course, of Freedom Mobile, as the cost containment initiatives on Videotron and Fizz continued to deliver. Telecom segments finished the year in record figures with CAD 1.7 billion in adjusted cash flows from operations, a 16% increase compared to last year, and EBITDA margin stood at 48%.
As of the end of the quarter, Quebecor Inc.'s net to EBITDA ratio, net debt, rather, to EBITDA ratio remains stable at 3.39, still one of the lowest of all of our competitors and telecom competitors and peers. In the 9 months since the closing of the Freedom Mobile acquisition, we repaid more than CAD 400 million in net debt and already brought down our leverage ratio from 3.6 to less than 3.4, as Pierre Karl mentioned earlier. We intend to continue to delever, as we've said, to get our investment grade rating and continue to operate in the low threes. Available liquidity of more than CAD 1.9 billion at the end of the fourth quarter, and our growing free cash flows will allow us to continue to improve our already very strong balance sheet.
In 2023, we purchased and canceled 260,500 Class B shares for a total investment of CAD 7.8 million. Finally, in light of these results, and following our plan to gradually increase dividends to represent between 30% and 50% of our net free cash flows, I'm happy to report that Quebecor's board of directors declared yesterday a dividend, a quarterly dividend of CAD 0.325 per share in both Class A and Class B shares, up from CAD 0.30, an increase representing a reasonable 28% payout going forward. We thank you for your attention and will now open the lines for your questions.
All right, so just to remind everyone to ask a question, it's star one. And the first question comes from Maher Yaghi from Scotiabank. Please go ahead.
Yes, thank you. [Foreign language] . I want to ask you to discuss your views on the new fixed wireless relaunch that Rogers announced this morning, but probably not the best place to discuss this publicly. But I will ask you on your own investments in wireless network deployment. Can you discuss what your priorities are in 2024 in terms of wireless network deployment, specifically on the 3.5 GHz spectrum? And can you share with us any views on your CapEx, tech, you know, budgets that you expect to spend in 2024, either for wireless or for the company on a consolidated basis? And also as a follow-up, you know, we are seeing more intense pressure, competitive pressure, you mentioned that in your prepared remarks, across Canada, affecting margins for...
All the players, how, how should we think about margins for Quebecor in 2024 as you continue to focus on gaining market share outside Quebec? Thank you.
Thank you, Maher. A lot of questions this morning? So, I guess that there were three questions. I will try to find out, you know, what they are. Well, the first one, Maher, you know, I, I guess that you're not gonna be surprised, you know, that I will tell you that, we do not plan, you know, to talk about too much of our, deployment strategy. What we can say, obviously, and this is, a relation that what we've been doing and what we said also in our, our speech, that we will continue to do so. We will continue, to make sure that, you know, we're offering, the, best service and the best product, through our, our footprint.
We certainly help with by the fact that, you know, the MVNO regulation is now up to speed. Obviously, again, you know, we would not be surprised to see a blockage, any sorts of things that, you know, the incumbents will put in front of us. We've been used to it, and we've been used, you know, to continue to fight, and at the end of the day, you know, making sure that our plan will succeed. So, you know, basically, this is the overall strategy I would be able to tell you. Other also, maybe, you know, and this is something also we addressed, and this is something we look forward to put forward as we've been seeing TPIAs in the province of Quebec, you know, highly present during the last years.
This situation changed dramatically after the acquisition of most of the TPIAs by either Bell, Altima and Cogeco. But this is not the same thing that, you know, we're seeing elsewhere. And we look forward to be able to propose, as a wireless operator, also services on a bundling purpose. And so we look forward, you know, to implement those, to offer and to improve our proposal to the Canadian market in the very near future. On the CapEx side, I think that, you know, we should not expect major changes. I think that what we said, and we will repeat, you know, to say it, is we consider ourselves disciplined, and we will continue to do so.
It's not something that we consider saving, we're always considering CapEx, you know, of the importance to continue to grow. But also in the meantime, you know, we make sure that what we spend is properly spent, and it's spent for the purpose of servicing our customers better and wider. On the margin, I will let you give the explanation.
On margin, Maher, you know, we've, you know, we've said that, you know, and we said this even before, you know, the acquisition of Freedom, you know, that we were expecting ARPU, you know, to come down. You know, it's, you know. Not only we're expecting, were we expecting it, but we're, you know, we're at the heart of it, you know? And it is a more competitive market is what we got into with our eyes fully open, and we expected that. And in order to be able to continue to grow margin, we always said that we had an advantage that, you know, that very few of our competitors have, is our long-standing cost culture, I'll call it.
You know, I think you will agree that compared to any of our competitors, we have been over the years, and this is not recent, you know, we have been very, very disciplined. I'd even say tight operators on the cost front. We certainly intend to continue and use that advantage to make sure that we can continue to grow margin in an environment of, you know, pressure on the top line.
More specifically, you know, don't forget as well, that there are opportunities and synergies that are still haven't been, you know, fully reflected in our results from the Freedom acquisition, obviously, as we are continuing to integrate and to develop the business and to invest in it, and to really change and continue to improve the culture to our high standards of, you know, of cost management that I just talked about. So, you know, margin is where we believe that we are positioned very, very well compared to our competitors.
You know, I think we have to be cognizant of the fact that, you know, that the revenue market and the will remain competitive, and we certainly intend to remain competitive, but we think we can continue to perform better than anybody else in that type of environment.
Thank you.
All right. Next question. Yep. Next question comes from, Jérôme Dubreuil, from Desjardins. Please go ahead.
The first question for me is on a comment Hugues made at the end of the prepared remarks. You've been saying, you said that pro forma, the dividend increase that gives you a dividend payout of approximately 28%. Just running the quick math here, it gives me a free cash flow sort of guidance of CAD 1.07 billion for next year. That would be higher than what we expected. Can you confirm that?
Yeah. I mean, this is what we're expecting. I mean, on cash flow, I think you will agree with me, Jérôme, that we've been delivering the goods and that, again, this is not recent. And even since the acquisition and even more so since the acquisition of Freedom while continuing to invest and you know, with some, as we see in Q4, with some impact on EBITDA through you know, increased you know, advertising and branding and investments in our retail network and our call centers and all of that, in a very competitive fourth quarter, as it's historically always been.
You know, we managed to generate, you know, significant cash flow and to repay CAD 400 million of debt in nine months alone, you know? So, you know, we believe, based on my comments on margin, for example, and our discipline going forward in CapEx that Jacques talked about, where we see a moderate increase for next year based on. But very, you know, more sort of a stability leaning towards a moderate increase next year. You know, that we will generate, that we will continue to generate these very impressive cash flows that will, you know, that will lead us to investment grade and to continue to delever. So, yeah, I'm comfortable certainly with the number that we've provided.
That's great.
I will add, Jérôme-
Yeah. Go ahead.
Obviously, there's a lot of measures, you know, to, to highlight, you know, whatever it's, EBITDA, revenues, ARPU, churn. I would say that, you know, one we could consider the most important for us is our capacity to generate cash. So what kind of cash are you generating to be able, you know, to bring, to pay your interest, to pay your income taxes, to pay your capital expenditures, and at the end of the day, you know, bring at the bank to reduce your debt and your debt leverage, that will give you the possibility to improve the relationship or the return that you're offering to your shareholders.
Or obviously, you know, helping your balance sheet to make sure that it will be in a good position for capitalizing any source of opportunities that may become. So, you know, when we're looking at our numbers, we see some of our competitors that are basically paying 100% of their free cash flow in dividends. And at the end of the day, instead of seeing their debt being reduced, you know, they're increasing, and their ratio also.
I guess that, you know, this is certainly not the way that we would like to proceed, and we will continue to have a balance between the different elements that we need to serve at the end of the day: dividends, interest, and capital expenditure, to make sure that our, again, the platform that we're building will service our customers the best way at the lowest prices, to maintain the margin as higher as possible.
And then if I could just squeeze a second one in here. I'm just trying to triangulate these comments with the margins we're, we're seeing in the quarter. If you can just maybe try to explain the seasonality of the Freedom business, maybe in the quarter, a Q4 profitability of Freedom versus what it would be in the, in other quarters, please. Thank you.
Yeah. Yeah, as I mentioned, you know, in my, in my comments to Maher, Jérôme, you know, Q4, it can't, you know, you can't just use, you know, especially since it's a recent acquisition, you can't just use... And I guess you're typing as you're talking to me, right?
Jérôme, you're busy man.
I'm not. Someone else is.
Oh, someone else is. Well, if someone else could go on mute because it's... Thank you. Yeah, so, my point is, you can't just, you know, use Q3, for example, because I think we'll all agree that Q2, which was our first quarter with Freedom, was, you know, non-representative. You know, we were just getting our hands on the business and, you know, we didn't make any particular waves. But, you know, certainly, you can't use Q3, you know, as a proxy for Q4, where, you know, Black Friday is now, of course, as you all know, not only a day, but it's almost a month, and then—which morphs very quickly into Christmas and Boxing Week.
You know, and it's a time, it's a highly. It's the highest, you know, promotional time of the year. And when you're the price leader, like Freedom, you know, it is obviously a time of year where you lose your pricing advantage. And, you know, we've been, you know, we've been, I think, quite transparent about this, that we feel as we are continuing to invest in the business, growing, you know, improving our network, improving our customer service, being more creative in terms of packages and what we offer our clientele, that we need to continue to offer a price advantage to be able to continue to gain market share.
And, you know, in Q4, quite frankly, it is less possible for us as all of our competitors become extremely promotional, and we lose that little bit of an advantage. So it's been historically even at Videotron, as we were growing, you know, you'll remember that it was historically a time of year where we didn't do all that well in net adds, you know? And that's why, and I'll just make a comment on net adds as we're going through. You know, when I think 66,000 in the quarter is actually very good when you compare our base to some of our competitors. And when you compare with we did 14 last year, you know?
It was Freedom, of course, but I don't remember that Freedom did all that well either, in Q4 of last year. So, anyway, all of this, where I'm going with this is that, you know, Q4 is a time of year where you lose that little bit of advantage, so you have to invest more. You have to invest more in advertising, which we did, in branding. You have more operational costs that are associated with that. And lastly, but perhaps more importantly, you know, the handset subsidies.
You know, it's a time of year where a lot of handsets, as you know, you know, leave the stores, and we take a one-time hit that is higher than, you know, than usual. And certainly, when we compare our negative equipment margin in the quarter, and especially at Freedom, because you know, a lot of handsets came out there, you know, we have more of a negative margin in the quarter. But that's a, you know. but that's—it's nothing unexpected, and it's seasonal, and it's, you know, accounting-wise, it's a one-time hit, you know?
So I think all in all, I think it's, you know, the margin and the performance, both in EBITDA and in net adds in the quarter, if I may say so, I think we managed to reach that equilibrium that, you know, that we were seeking in terms of continuing to gain market share in a crazily promotional time, while maintaining, you know, while trying to minimize the impact on margin and continue to grow. These would be my comments.
Fine, Jérôme. Anything else? I think so. So maybe we can go to the next question. Operator?
Of course. Of course. Next question comes from Vince Valentini from TD. Please go ahead, Vince.
Thanks very much. I apologize if you've kind of answered some of these things, but, Hugues, you normally give us telecom segment CapEx guidance or a budget for the upcoming year. Have you given that number?
No, I have not given that number. It's, you know, as Pierre Karl mentioned, like, a slight. I, I think we believed, I believe we finished the year at 536 or 5, just slightly under 540. So, you know, a slight increase on this. We're probably looking at the, the 600 area, you know, for 2024.
So you can increase your CapEx slightly and still get to somewhere close to CAD 1.07 billion in free cash flow? I'm, I'm just trying to reconcile that.
Exactly.
That would make it seem like there's very little spent on wireless handset subsidies or restructuring costs or working capital or any of those other, you know... Forget about EBITDA, we can predict that on our own, but all those other items below EBITDA, you, you have no concerns about any of those line items that would hold you back from getting above CAD 1 billion?
Well, I don't know if I'd go as far as saying I have no concerns. I mean, we're in, you know, we're in a tough market, as you know, and but I would put it differently. I would say that I believe in our ability to generate this free cash flow. I think we, you know, in the past, you know, we've been in this situation before, Vince, as I'm sure you remember, and we've been able to deliver. And I'm confident that, you know, that we will, you know, that the billion-dollar number in free cash flow is not, is far from being unreachable.
Excellent. If I can try to drill down on something else related to margins and costs in the fourth quarter. Your answer seems to imply most of the bit of the deceleration in wireless EBITDA growth that we saw was just seasonal marketing costs and handset subsidies and all that, which I think is quite justified and easy to understand. Is there any impact from roaming fees? I mean, you offer free roaming in the U.S. and Mexico and now 81 other countries. Is it, is this not, becoming a material line item in your OpEx as well?
Well, it's... I mean, it's there for sure. As we offer, you know, you know, roaming packages that are obviously a lot more generous than they were in the past, that yes, there is some loss on of that revenue. So it's there. It's not huge, but it definitely is there. Yeah, you have a good point. It's one of the things I could have talked about. But you know what? Yeah, the reverse side of what we did, though, is that we, you know, it certainly gave us some significant momentum in gaining customers. So, and it was a bit of a different twist, you know, as I'm sure you'll agree.
You know, you can play on price, but, you know, you need to find other levers, and that was a, you know, a pretty good one, which resonated with customers. So yeah, I mean, a little bit of, you know, giving up a little bit of revenue, but, you know, I, we still think it was a good, it was a good decision. Yeah, and also another point, don't forget that international roaming charges are much lower than the Canadian ones, right? So we've talked about this before, so less of an impact on that front.
Last thing then, somewhat related to that, if your network's improved, you're giving away these extra perks like roaming. Are you satisfied, maybe this is more for Pierre Karl, are you satisfied with CAD 36 ARPU? And you said in your opening remarks you expect to remain aggressive. I mean, we obviously don't normally see carriers keep their Black Friday pricing continuous right through to basically the end of February, where we're at now. Do you... Is this just some sort of temporary plan to get sales momentum going? Or do you think this is the right level to, you know, have CAD 29 offers out there and your ARPU at 36? Are you happy with that, or is this temporary in your view?
Well, you know, we need to put this in perspective. You know, first of all, you know, when we arrived at Freedom, I guess that, you know, they were kind of a limbo situation for the last year and a half. And, not sure completely also what was the mindset, you know, of Shaw was considering for this wireless business. So we arrive and do what we can consider being a very good transaction in terms of price paid, EBITDA accomplishment. Then, you know, starting operating it. For whatever reason, the investment made was pretty short because of the environment where they were coming from.
It was a priority for us, you know, to try to implement, and we will continue to do so because it is a reason of our success in Quebec. So to implement a culture that will bring customers first, and this is why, you know, we went forward with the 5G deployment, with price freeze, through in recognition of the support of our customers. To continue in this direction, and I'd like to focus, and this is why, you know, this is a moving target, and we cannot fix, you know, this, this ARPU forever. And the moving target will be our capacity to deliver your multi-services, to be able to offer more aggressive bundles in terms... And what will be the response of the competition in the territories we are servicing.
On top of which, also, as we mentioned, you know, we just started a business, a service in Winnipeg, and larger in Manitoba, that will bring, you know, additional services, and we cannot today anticipate what will be the reaction of our competitors. Will the reaction be the same as what we've been seeing in Quebec? I mentioned this, you know, where we're seeing prices in bundles that we never seen before, and where the difference is of very, very important. But, we are able, you know, to continue despite this strong pressure to service our customers, because our customer service, you know, experience and expertise, which is highly, highly appreciated by our customers. And we look forward in the bundle proposal that we're gonna offer to make a difference.
So this situation that we're living here will certainly, you know, be exported, quote, unquote, "in the different markets that we intend to service in the very near future." So then, therefore, you know, if the ARPU for wireless makes sense, makes strictly sense, I would say, you know, less and less in the future.
Fair enough. Thank you.
Thank you, Vince. Take another question.
Yes. Next question comes from Stephanie Price from CIBC. Please go ahead.
Good morning.
Hi, Stephanie.
Just to follow up to Vince's question, just curious if you could talk a little bit about the timeline to bundled internet offers for the Freedom brand. It looks like Koodo and Virgin are offering internet bundles, but, but Fido has stopped its home internet offer. Just curious if you see a strong demand there for internet bundling within the flankers.
Well, you know, first of all, I think that, you know, we are in a good position technologically, you know, to do so. With the acquisition of V Media, you know, we already have the experience of a TPIA. We need to make sure that, you know, the stack, joining with the Freedom will be accomplished. Certainly, also, I think that we should highlight the technology that, V Media brought to the table, and this is one of the reason why, you know, we thought it will be a good idea to acquire it. It's what, you know, the television, features are bringing, to the company. So putting all this, I guess that on the technology, on the technology front, you know, we have what is appropriate to move forward.
The part of the equation that we don't control, and we highlight it, you know, is the kind of blockage that we will meet, you know, with the incumbent network operators that we are forced to connect to. We expect this will go, say, fluently. I don't know if I can use that word, but you know what I mean. Unfortunately, you know, in the past, you know, this is not something that we experienced. As an example, you know, when we decided to be a TPIA on the Bell monopoly, footprint in Abitibi, we were forced to go in front of the CRTC many times, for at the end of the day, you know, be in a position to offer our service. But we lost, you know, between 9 and 12 months.
Today, you know, and I guess that this is, that was certainly not a good thing to do for Bell, because, you know, we took a significant portion of their marketplace, so much that we are now intending, or we are in the process to build the network or to overbuild the cable vision platform, which is a Bell platform in Abitibi. So then, therefore, obviously, growing from a TPIA to a network operator. So we look forward to keep this in mind. We are a facility-based, you know, company, have been built like this even, you know, in the old times of the Chagnon, and we intend to remain the same.
This is why, you know, when we started in 2006 as an MVNO operator, we participated in, you know, all the representation to make sure that we will get access to spectrum. We built, you know, the platform to convince ISED, which was not ISED at that time, was only industry, you know, to make a spectrum reservation for new entrants. We win that game. And today, you know, from no wireless operator, we are other than our friends in Maritimes, the only, you know, new operator in wireless, for which also with, I would say, favorable regulation, that we will be able to offer bundles. Obviously, we experience significant success in Quebec offering bundles, and we look forward to do the same.
Again, that means, that does not mean that we should not be able also to operate as a standalone wireless operator, as we've been doing it. Not completely true, because we also offer internet, but as we've been doing it for the last four years with our Fizz brand, and for which, you know, we think and we should say that we were quite successful. This is something that we look forward to replicate in the other areas. So in a nutshell, to answer your question, is, you know, we're ready to go. And what we're seeing is opposition from the incumbent to be able to connect to the network.
Okay, thanks for the color. And, and maybe just one more from me. You mentioned Fizz there. Just curious what you're seeing in terms of the Fizz beta program in English Canada. Has the rollout been as it's expected? Has there been any response from competitors, and, and how do you think about any cannibalization of the Freedom base?
Well, you know, this is always a quote, unquote, you know, a little bit of kind of by kind of cannibalization. But at the end of the day, you know, the question is, would you better you know prefer to get your customers being you know lose being lost to to our your competitor or keeping them? But I would say that, you know, with Fizz, what we experienced in Quebec was not, it was certainly you know offering a service to a bucket of clientele, you know, the digital-savvy people, younger people that would prefer to be serviced by a digital environment, with no call center, having probably a lower price.
But, on our side of the equation, you know, the lower price or the lower margin is, you know, compensated by lower cost. So at the end of the day, you know, it bring us, in terms of free cash flow, a very interesting input. So again, you know, we cannot expect completely anticipate what's gonna take place, but we see certain areas probably more open to this kind of service, to what we can call traditional services. That does not mean that, you know, we will not continue to offer self-install. That will help our cost base. This is something that we've been doing in Quebec, and we look forward also to implement this in a more traditional way.
Thanks for the color.
Thank you, Stephanie.
All right.
We'll go to the next.
Sure. Next question comes from Matthew Griffiths, from Bank of America. Please go ahead.
Hi, good morning, and thanks for taking the question. If I could, I just wanted to maybe circle back for a moment to the CapEx question, and if you could give any color on, like, the split between, maybe, you know, your cable investments in the coming year and wireless. You know, particularly I'm thinking about the comments Pierre Karl made about rolling out wireless to new markets. And if there was any context you could provide around those rollouts. Obviously, you don't want to name them, but if you could, how material of an addition to your, you know, addressable market are these rollouts? Are they relatively small, which would, you know, be in line with the no change in CapEx guidance, or, you know, perhaps they're larger than I might be thinking? That would be helpful. Thank you.
Thanks, Matt, for the question. On the rollouts, I mean, no, the rollouts are significant. The rollouts are significant through our MVNO agreements, which gives us a good lever on CapEx, as you know. So, you know, I think we have to be just a little bit make sure we, you know, a very large improvement through MVNO doesn't necessarily translate short term into a much higher you know, CapEx increase. You know, so I think we're in the right position to increase our coverage area significantly in, you know, in Ontario and Alberta and BC, without, you know, while still being quite disciplined on the CapEx.
I mean, on the CapEx, to answer your first question, I mean, the priority is network improvement for sure. And we will continue, you know, we talked in the past about densification, about making sure we address, you know, the black holes and the issues with, within our own coverage areas, and this is where we're continuing to focus our investments. So that would be... You know, I won't give you the specific split as we never do, but, you know, that's certainly where our priority would be, would be in terms of CapEx. But, I think that there really is, you know, is no dichotomy between, our expansion plans and our CapEx guidance.
Okay, that's helpful. Maybe just on churn, and I apologize if I missed it, but I believe you provided some color on churn ex Freedom, but what was wireless churn in the quarter? And now that we're two-thirds or so of the way through the first quarter, you know, how have you seen churn kind of evolve after that period where the industry overall really experienced elevated levels? Has it remained, you know, seasonally higher than you would expect, or has it reverted back to, you know, previous years' churn levels on the wireless side? Thanks.
Matt, our churn is actually down in Q4 in all of our brands, well, in our three brands. You know, overall, of course, Freedom having a higher churn, obviously, you know, when you do the average, it dilutes and it increases the overall churn number. But every brand, even Freedom has started. You remember, I'm sure you will remember, we talked about that, saying we had to have our eyes on the churn as we, you know, and we needed to put in place a number of steps, you know.
We referred to that many times to be able to continue to you know some of the black spots and some of the network issues we talked about, some of the customer issue, customer service issues, et cetera, et cetera, to make sure you know that we address churn. And you know what? We did it because Freedom's churn is already down sequentially, and that's you know to us this this this this is huge. And ex Freedom also, to answer your question, we said that you know our Videotron and Fizz brands together's churn was down 10 basis points. So we're continuing to bring down churn as well in our home markets. So..
We see this as, you know, very important, and as a clear indication that our customers are increasingly resilient, are increasingly hard to, you know, to steal from us as we are improving our service and our network as we said we would, you know. And that's gonna be the name of the game, you know, because ultimately, that's where we're positioning ourselves. We're the price leader, but we need to improve the technology front and the service front. And I believe that, you know, the churn numbers that we're already showing are proving that we're on the right track on this.
Thank you very much.
All right. Next question comes from David McFadgen from Cormark Securities. Please go ahead.
Great. Thanks for squeezing me in. Just firstly, just on wireline, relatively stronger net adds here, in recent quarters. You know, you've talked about heightened price competition from one of your largest fiber competitors. Can you maybe speak to some of the moving parts that drove the relatively stronger subscriber loading during the quarter, and just the competitive environment in general on the broadband side?
Yeah. Actually, yes, we. Our performance was really good on,
I have to say, guys, that I'm still irked about the underlying assumption that our performance on wireless isn't good, net adds isn't good, where we actually think it's pretty good at 66,000 when we did 14 last year, and Freedom didn't do a heck of a lot. But anyway, I'll set that frustration aside, and I'll worry, I'll answer your wireline question. W here we did way better than last year. And it's a hugely competitive market. We've talked about this, Pierre Karl talked about this in his opening remarks.
I mean, we have a main competitor that is, you know, that is crazily competitive, offering prices in Quebec that for the same package is 40%-50% higher in Ontario and elsewhere in the country. And we are still managing on the basis of our, you know, strong service, because quite transparently, we are not, you know, responding or have not been responding on price. And we believe that we have, you know, way more to offer. And we are very strong on retention and being able to keep some customers. And that's why our performance has been quite interesting in wireline net adds, you know?
But, you know, to answer your second question, I mean, I'd be lying if I said that, you know, that the overall promotional and competitive environment is easing in Quebec. It's not. But I think, we're showing that this is, again, we've been competing with Bell and wireline for quite some time, you know? And, it's ebbed and flowed and, you know, and yes, of course, I'll admit that right now we're in a tough spot with them, and they're particularly aggressive. But, you know, we, we've been successful in the past at against them, and we will, you know, we will continue to be successful.
You know, they're bringing down the overall value of the market, but we believe that even so, you know, we're even better placed than they are to compete in that type of environment, and we will continue to succeed, you know.
Yeah, we've been in this, as you said, you know, for so many years, so we're quite used to it. But, you know, if you look at our performance and the competitive performance, we highlight the fact that it's very competitive, and it's even getting more competitive. You know, I don't know what should be the conclusion other than to say that they're not successful, and this is why they continue to reduce their prices. So maybe they should ask themselves, you know, are they doing something good? And when they are you are looking at overall numbers, you know, we've been seeing, you know, their improvement lower than previous quarters. So if I may, I remember, you know, they had 23,000 net addition in video, which is lower than, you know, what they used to have.
We don't know the split between Ontario and Quebec, but, but maybe it talks by itself. So we're used to it, and we will continue to make sure that, you know, we will. We are offering the best service, the best proposal, and we are doing it, you know, efficiently and wisely, you know, and not spending our money in things that don't make sense and don't get us an appropriate return.
Okay, great. And then, sorry, just one last one for me. You know, you typically disclose wireless EBITDA, and maybe you did in your prepared remarks. I apologize if I missed it, but I think the growth in wireless EBITDA was 65%. Are you able to disclose the amount of wireless EBITDA during the quarter?
Yeah. Yeah, I, I can disclose the CAD 220 million from in the quarter from memory. I'll just check my number right now to be sure. 220... Yeah, 220. Yeah, 220 in the quarter in terms of the wireless EBITDA.
Okay, great. Thanks, guys.
Thanks. Is our friend David on vacation?
No, he just, he just had a meeting. He's here.
Oh, all right. If he doesn't have enough time for us, then, I'll call him this afternoon to remind him that we're, you know, we're important too.
It is a joke.
No, it's a joke. A joke. Thanks.
We'll take the next question, and I think it's the.
Yes.
the last one, eh?
Yes, indeed. So last question comes from Drew McReynolds from RBC. Please go ahead, Drew. Oh, it looks like Drew dropped off, and we have Maher Yaghi from-
Another one, another one that don't want to talk to us.
Yes.
Hurt. We're hurt.
Sorry. Sorry, I had to come back. I had to come back to this because it's fascinating when you were talking about churn-
Maher. Sounds like Maher. Maher, do you have anything to add here? Since your colleagues won't talk to us, maybe you can talk to us.
Can you hear me?
We can hear you very well.
Yes, I needed to go back. Sorry. It's fascinating just when you talked about churn being down sequentially on your brands, on wireless, when we saw a significant increase sequentially for the incumbents. I mean, at the end of the day, don't you think that the experience that we saw in Q4 will probably highlight the... That it's less likely going forward that we'll see that kind of significant competitive dynamic happening again? Because... You know, having higher churn for incumbents but not able to bring you down is not profitable for anyone. So I go back maybe to say, you know, the experience we saw in Q4 doesn't give you pause in terms of that the risk that this will occur again is less probable.
Well, Maher, you're asking, you know, existential questions. Should we anticipate, you know, again, you know, what's gonna take place? I guess that, you know, maybe we can consider that our competitor is very nervous about, you know, us coming in the marketplace. What we're seeing is sometimes, you know, strange and weird reactions. I think, you know, Bell going to the Privy Council, you know, to fight the CRTC decision for the government is certainly, you know, adding in an environment where they would like more competition. You certainly heard, you know, about, you know, the Prime Minister calling, you know, some decisions, garbage decisions.
We're seeing, you know, other players going in front of the Federal Court of Appeal to ask the competence or to question, you know, what the CRTCs are doing. We see a arbitration process for the MVNO verification process being challenged also by the incumbents, where we all know that the roaming prices in Canada are the one of the highest, if not the highest in the world. And we all know, you know, what roaming prices cost in the U.S., cost in Europe, and they're still, you know, maintaining that kind of situation. Last week, we were in front of the CRTC. Also, I was in front of INDU, which is the industry committee for the Commons, la Chambre des communes.
And it was quite interesting to see, you know, they were all anonymous, all anonymous, seeing a company challenging the Big Three. I never seen that in my life, and I've been there a few times. So things will happen. And is, will this have an effect on churn? There's probably gonna have an effect on churn. How can we qualify the marketplace in Canada? We're certainly helped by immigration, but more and more, being in a mature business is also a, a churn market. It's a business of churn and providing, you know, the best price with the best offer, and the best product will give you the capacity to increase your RGUs.
This is in the business we're in, and we intend that we will continue to grow our EBITDA by adding a better RPU, with better service for a higher amount of Canadians, a higher amount of customers. This is how we've been building our different businesses in Quebec, from the internet access to wireline telephony, and finally, in the wireless business, you know, for the last 10 years. I guess that there's no magical recipe other to offer the best thing to our customers, and we look forward to do this for the new footprint that we're now being implemented since the acquisition of Freedom Mobile.
Thank you.
Thanks, Maher.
So this is the last question. Thank you, Maher, and we look forward, you know, to talk with you guys at the next conference call. Thank you very much, and have a nice day.
Ladies and gentlemen, this concludes the Quebecor Inc.'s financial results for the fourth quarter and full year 2023 conference call. Thank you for your participation, and have a nice day.