Good day, everyone, and thank you for standing by. Welcome to the Quebecor Inc.'s financial results for the first quarter 2023 conference call. I would like to introduce Hugues Simard, Chief Financial Officer of Quebecor Inc. Please go ahead.
Good afternoon, everyone. Ladies and gentlemen, welcome to this Quebecor conference call. My name is Hugues Simard. I'm the CFO. Joining me to discuss our financial and operating results for the first quarter of 2023 is Pierre-Karl Péladeau, our President and Chief Executive Officer. Anyone unable to attend the conference call will be able to listen to a recording by telephone or webcast. Access details are available on Quebecor's website at www.quebecor.com, and the recording will be available until August the eleventh. I also want to inform you that certain statements, as usual, made on this 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 regulatory authorities. Let me now turn the floor to Pierre-Karl.
Merci, Hugues. Good afternoon, everyone. First and foremost, I should say that we're very happy to have finally closed the acquisition of Freedom Mobile on April the third. After months of negotiation, representations at various levels of judicial, governmental, regulatory authorities, and other twists and turns, we're now already hard at work to offer all Canadians, for the first time ever, the benefits of our competitive services, superior client experience, and lower prices. It is an important milestone for both Quebecor and Freedom. I would say a natural fit between two companies with a strong track record at disrupting their respective market and successfully competing against well-entrenched incumbents through an acute knowledge of our markets, agile and responsive commercial strategies, as well as unparalleled client care.
With our combined experience, expertise, and assets, we have everything we need to drive long-term competition as a strong fourth national wireless carrier. We will. As you know, we have accepted the conditions stipulated by the minister, and we intend to deliver better pricing for Canadians swiftly. These conditions are aligned with our business philosophy, which has proven highly successful in Quebec, where we built a significant market share in a very short time span. As I said this morning to our shareholders, things are about to change for the better for Canadians, and I should say, stay tuned. That being said, it is important to reinforce that for competition to truly thrive in Canada, fair and reasonable roaming and MVNO rates must be established in line with international standards as well as the government's and the CRTC objectives.
It is imperative that the Big Three sign MVNO agreements with regional players and stop perpetually using delaying tactics as has been their modus operandi over the years as we continue to experiment with Bell and Telus these days. On the bright side, the CRTC ordered on Tuesday several changes to be made to the proposed tariff pages of the national players and has set a reasonable timeline for the implementation of the mandated MVNO operator regime. We are optimistic, as we sincerely believe that a new pro-competition mindset is firmly in place at the helm of the CRTC, and even more so at ISED. In addition, it is essential that incumbent carriers be required to offer TPIA services through aggregated FTTP facilities for us to become a truly fourth national player in wireless and wireline services for the rest of Canada.
The CRTC must implement a reasonable test for FTTP rates to prevent abusive situations where underlying providers offer their services at prices significantly below approved wholesale rates. On the regulatory front, we welcome the addition of the Bill C-11 as a step in the right direction. Canadian private broadcasters companies have been weakened by an unfair competitive and regulatory environment for too long. We now encourage the government to quickly give direction to the CRTC to grant local private companies the flexibility necessary to continue to evolve in this new regulatory context and, thus, ensure their future. To quickly remedy the precarious situation of private television, it is imperative to immediately withdraw advertising from all CBC Radio-Canada platforms to put an end to unfair competition and race for ratings. This situation should not be true for CBC as a whole, with less than 8% market share.
Certainly the case for Radio-Canada, which competes directly and actively with TVA and reaches a very significant 21% market share, contrary to the CBC, which is hardly moving any kind of needles. Finally, we need the swift adoption of Bill C-18 that would regulate negotiation between web giants and local news outlets to ensure fair and equitable compensation for the use of their content. The creation of a redistribution platform is necessary in view of the web giants' market dominance. As we all know, these platforms use the content produced by Canadian news organizations to generate a significant portion of the interaction on their network and should be required to pay a fair price for it.
Before turning to our operational results, I am proud to report that Quebecor, on a consolidated basis, has generated CAD 346 million in cash flow from operation in the first quarter 2023, an increase of nearly 10% over the first quarter of 2022, with Videotron also improving its cash flow from operation by 10% to CAD 380 million and its EBITDA by 3% in the quarter while maintaining the best margins in the industry. As I have said before, I believe that cash flow from operation is by far the most important compelling benchmark of a company true performance compared to its competitors.
As you know well, it is easy to capitalize operational expenses to improve the EBITDA, the EBITDA line, but at the end of the day, what really matters is how much free cash you generate. I will now review our operational results, starting with our telecom segment. In the first quarter, ARPU increased in all our services and through the price optimization, improved brand positioning and churn management with continued mitigation of customer decline in traditional services, we returned to growth in our wireline services gross margin. In a market characterized by ongoing cord-shaving and cord-cutting, we managed to slow down this trend in both television and wireline telephony for a fifth consecutive quarter by optimizing the positioning of our brands and the pricing of our illico and illico platforms, thereby improving ARPU. This quarter, we reduced television and wireline telephony declines by 15% and 5% respectively.
In broadband, we recorded 9,000 net adds this quarter, excluding third-party resellers, for a year-over-year growth of 75,000, which includes the acquisition of 37,000 VMedia customers in Q3 2022. Internet ARPU improved CAD 1.06 or 2% over the last year, again, resulting from pricing optimization and brand positioning, allowing us to overcome the dilutive effect of Fizz and lower plan mix. In the wireless segment, we recorded 26,000 net adds during the quarter, 2,000 or 6.9% more than last year, for a year-over-year growth of 110,000 new lines, capturing a 25% combined share of gross adds in Quebec with our two brands, Vidéotron and Fizz, according to a Léger survey. Churn remained stable and our wireless EBITDA increased by 13% in the quarter.
Consolidated wireless ARPU for the quarter improved by $0.21 or 0.5% compared to the same quarter last year, due to higher plan mix, lower discounts and higher roaming and data usage revenues, offsetting the diminishing dilutive effect of Fizz. Lastly, I am proud to report that Vidéotron was rated again, as it has been 17 x since 2006, Quebec most respected telecommunication services provider in Quebec, according to Léger 2023 reputation survey. In addition, Fizz was rated first for online experience in Canada telecommunication industry for a fourth consecutive year, according to the Léger WOW Digital study published in 2023. Whether traditional or digital, Vidéotron simply deliver the best client experience and offers the product and services that our client wants. At the most affordable prices, the performance and commitment we're now expanding across Canada. Turning to our media segment.
Despite challenging advertising market conditions, especially in television, we have continued to invest significantly in the production of unique, differentiated, and highly popular content to ensure continued leading ratings and maintain our position as Quebec undisputed destination for broadcasting information and entertainment. Our strategy was successful, as TVA still dominates its market, increasing its consolidated market share by 0.3 part to 40.9% in the quarter, compared to Radio-Canada 21.2% and Noovo Media 20.2% respective market shares. TVA also broadcasted four of the five most watched TV shows in Quebec, including their new reality show, Sortez-moi d'ici! , which rose to first place with an average audience of nearly 1.7 million viewers, and La Voix, which attracted nearly 1.6 million viewers.
Our sports and entertainment division had a very productive quarter, organizing more than 200 cultural and sporting events throughout the province of Quebec. Igloofest Québec, the first spin-off in Quebec City of our blockbuster Piknic Électronik Igloofest franchise, was a huge success with crowd favorite talents such as Diplo, Paul Woolford, and Carl Cox, and a fully booked venue every night at the festival. The Quebec Remparts also drawing records crowd as they continue to perform well in the playoff of Quebec Junior Hockey League. I will now let you review our detailed financial results and come back to you for question period. Hugh?
Merci, Pierre-Karl. Turning to our financial results, our telecom segment started the year on a strong note, with CAD 380 million in cash flow from operations, a solid 10% increase compared to the same quarter last year. Our cash flow from operations margin stood at 41%, improving 3% compared to 38% last year. EBITDA growth was 3%, and EBITDA margin grew to 51%. Revenues reached CAD 925 million, a 2% increase compared to the same quarter last year, the best performance in nearly two years, mostly due to higher wireless and internet service revenues and wireless equipment sales, partially offset by lower Helix equipment sales, resulting from our pricing strategies to improve margins. On the OpEx side, our cost containment initiatives are continuing to pay off and translating into our increasing and industry-leading EBITDA margin.
Telecom CapEx spending, including the acquisition of spectrum licenses, was down CAD 21 million as compared to the same quarter last year. This favorable variance is mainly due to the timing effect of the sourcing of materials as we continue to focus on our strategic priorities and remain committed to our efficient spending path while increasing our investment levels on key initiatives such as LTE Advanced, 5G, network extensions, and geographic expansion. In our media segment now, revenues were down 6% in the quarter as compared to last year, driven by Mels' lower film production and audiovisual services activity. In broadcasting, our investments in a wealth of new show, original productions, and exclusive content paid off, as evidenced by a 2% revenue increase in the quarter as compared to last year.
As we announced in February, we initiated a number of restructuring and cost-saving measures, both at Groupe TVA and in other media units, to address the challenging advertising revenue market. The positive financial impact of these initiatives will increasingly be felt over the next quarters. On a consolidated basis, Quebecor's revenues reached CAD 1.12 billion for the first quarter, up 2.5% from last year. Our Adjusted Cash Flows from operations increased by CAD 30 million in the quarter, or 10% to CAD 348 million, mainly due to lower CapEx spend.
Quebecor's EBITDA was up 0.2% to CAD 443 million in the quarter, driven by the CAD 14 million or 2% increase to CAD 474 million in EBITDA from our telecom segment, but counterbalanced by Groupe TVA's CAD 14 million decline in EBITDA due to our increased investments in content, which helped us, as Pierre-Karl explained, continue to grow our market share and, but did not unfortunately translate into sufficient additional revenues in a difficult and more competitive advertising market. Quebecor reported a net income attributable to shareholders of CAD 121 million in the quarter, or CAD 0.52 per share, compared to a net income of CAD 121 million or CAD 0.51 per share last year.
Adjusted Income from continuing operations, excluding unusual items or gains or losses on valuation of financial instruments, came in at CAD 136 million or CAD 0.59 per share, compared to an Adjusted Income of CAD 129 million or CAD 0.54 per share last year.
As of the end of the quarter, our net debt-to-EBITDA ratio was 3.13 x compared to 3.18 x reported at the end of the first quarter of last year. It's important to underline still and continuing to be better than Bell's 3.44 x, Rogers' 3.50 x, and Telus' 3.85 x. Pro forma the acquisition of Freedom, our ratio is rather 3.80 x. Our balance sheet remains very strong with available liquidity of CAD 1.5 billion at the end of the first quarter, following the redemption at maturity of Quebecor Media's five and three-quarters % senior notes and the increase of Videotron's secured revolving credit facility from CAD 1.5 billion to CAD 2 billion in January.
Pro forma, the Freedom acquisition and the new CAD 2.1 billion dollars secured term credit facility consisting of three tranches of equal size maturing over four years, our available liquidities of CAD 1.5 million, a billion rather, are more than sufficient to build our to fulfill our commitments and fuel our development plans. We thank you for your attention and will now open the lines for your questions.
All right. Our first question comes from Maher Yaghi from Scotiabank. Please go ahead.
Yes, thank you, and thank you for taking my question. I wanted to focus on your bundling strategy in the Freedom areas that you are starting to look at. This week, we saw a significant reduction in prices on bundled services in Ontario. Both Bell and Rogers have brought down their prices quite a bit. I mean, right now, Rogers is not far away selling their 1.5 gb price internet from the CAD 49 tariff that they have to sell on an aggregated wholesale basis. Obviously, a regular ISP will have a hard time to compete at these levels, at the retail levels that we see right now in the marketplace.
My question is, did the deal that you struck with Rogers give you enough margin here to continue to operate and sell profitably a bundled product at 1.5 gb given the new lower retail prices that we see in the marketplace in Ontario? Thank you.
Good. Maher, I'll start, and Eric will add a few things. Well, first of all, you know, I would like to refer a little bit about what I said in my intervention regarding what the CRTC said earlier this week on Tuesday. I don't want to interpret this as a completely without any question thing. You know, I read between the lines that the message is loud and clear from the leadership of the CRTC. You will remember also when the Minister Champagne announced the approval of the transaction in his press conference, that he was going to push and reinforce. Well, maybe not reinforce, because probably it was not there big time, but certainly push forward for more competition.
What the CRTC said, what the leadership said is that, you know, they know about all those tactics being used by the incumbents. They know that the roaming prices in Canada doesn't make sense. Therefore, they will review this quickly other than they also move forward with a schedule to make the incumbents their network opening for MVNO operators. As you can imagine, you know, we intend to start as an MVNO operator where our network is not actually built. We have obligation that we will build this network, but you know that we have seven years to do so. By the time that also, you know, we will implement, this is also being regulated by the CRTC, the seamless handoff, so our network will be of the quality of any other operator in Canada.
We expect roaming prices. We expect MVNO prices. We expect certainly also additional maybe conditions for the TPIA, certainly on the speed-based. If you're familiar with the prices, and I think that, you know, you refer to some pricing in terms of Bell selling price for their gig. The pricing regulated for the speed-based by Bell is CAD 122 to have access. For the last, I would say probably four or five months, even more, Bell has been selling their gig at $60. Either the CAD 122 price is highly inflated or either they're selling their gig at a loss. Pick what you want. We think we will pick, you know, that the pricing is inflated and therefore we think also that the CRTC and ISED will be able to find this at the same conclusion.
This network also will be available for TPIA as we are. As you also know that Bell, Telus and Rogers, not as more as Rogers and Bell, but their own TorIX. There's the new game in town that will come. I'll finish before, you know, moving to Hug. Is the market competitive? Yes, it is. We expect that the market will be competitive for sure. This is how we've been able, you know, to gain market share in Quebec, and we don't expect that it will be different in the other regions in Canada where we're now operating with Freedom and overall with roaming prices that will change in the near future with arbitration taking place at the MVNO process being launched by the CRTC.
Maybe just to add a little bit on your comment on bundled prices, Maher. You know, as Jacques just said, you know, I was gonna say that's how I was gonna start my answer. I mean, it's not as if this is a surprise that both the wireless and the bundled prices are coming down, you know. My first comment would be, you know, we've been, you know, we've been at this for many, many years in Quebec. I think we've demonstrated that we can successfully and profitably compete against that and in the rest of Canada, you know.
That was one of the reasons that we negotiated a number of specific agreements with Rogers to ensure that we can make the margin that is necessary as these prices come down, that we are in a position to bundle, that we are in a position to lower our back-end expenses, whether it's transport, backhaul or whatever. To be in a position to be aggressive on bundled and unbundled prices. You know, this is not, you know, this is not unforeseen, and this is not something we're, you know, we're not used to. I'd say that we certainly planned this and to make sure that we were able to respond to this situation and just watch us go, you know.
I think the future will tell, you know, if we're right about this, but we're pretty confident.
I will just add that, Maher, that, you know, we all did this despite the fact, you know, that we were paying roaming prices that was completely out of what the market is all about elsewhere than in Canada, being known as the country where the roaming prices are the highest or if it's not the highest, one of the most higher in the world.
Thank you. Thank you both for your answer, but just wanna summarize it quickly. Under the agreement that you have with Rogers or, you know, if you don't wanna get into the details, it's okay. Can you sell internet at 1.5 gb in Ontario at CAD 50 in a bundle and still make money? That's really what I'm trying to get to, because that's the price that Bell is selling their 1.5 gb in Ontario at right now. Can you make money at CAD 50 for 1.5 gb in a bundle?
I will answer, very quickly, Maher. No, because as I said to you know, the price to have access to the SCPH is a CAD 122. You can't sell this to CAD 60. This is, you know, what we experienced in Quebec for the last five or six months.
Okay. Thank you.
All right. next question comes from Jérôme Dubreuil from Desjardins. Please go ahead.
Thanks for taking my questions. Jacques, you talked about the importance of generating free cash flow in your prepared remarks. Typically, you're open to sharing your CapEx plans for your business in Quebec. Would you also be ready to share what your CapEx plans in dollars would be for the Freedom initiative?
Yeah, I mean, you know, we've, you know, I think one thing we can say it's, yeah, I mean, the number that we would feel probably comfortable with is probably gonna be over the next few years to be in the neighborhood of CAD 200 million CapEx, as guidance for English Canada.
Okay. And that would include, possibly launching a 5G network in the early months, I'm guessing.
That includes everything, Jerome. This is our CapEx guidance for. I, you know, I mean, 5G, don't forget, I mean or maybe you don't know, but, well, one thing that's important to know is that Shaw and Freedom had started the investments in 5G, with, you know, certain areas quite ready actually to be turned on. Yeah, there will be further investments in not only in 5G but in the network as it's, you know, as we continue to make it better. You know, all of the above is included in the number I gave.
Okay, great. Then second question is on the internet loading. you know, we look at the numbers and, it looks like an improvement. It's been a while since we've seen the net adds actually improving year-on-year. Wholesale excluded right now, there's, these regional deployments. What's really the trend like, the underlying trend in terms of internet net adds? Has the competition stabilized a bit in Quebec?
Yeah. Just on a few points on your thing. Yes. Now we are reporting only the retail internet numbers like all of our competitors, by the way. I mean, it's, it is due to, you know, first of all, as you well know, our competitors, mostly, especially Bell and Telus, have invested significant, very large sums of money to make acquisitions. They're obviously trying to, you know, to migrate as quickly as they can on their own network. That creates obviously a wholesale downward trend in terms of RGUs.
We've excluded that. You know, even if you look at just the retail in and of itself, it's a huge improvement over last, over the same quarter last year. You know, we believe that there's, on the internet side, you know, our response to Bell has been quite successful. We will continue, you know, you know. In terms of our market share of ads on the internet front, you know, we remain still, of growth ads, we remain still higher than Bell. I mean, this is, you know, this is good news for us.
Thank you, Jerome. Merci.
All right, next question comes from Drew McReynolds from RBC. Please go ahead.
Yeah. Thanks very much, and good afternoon. Yeah, first, Pierre and Hugues, congrats on closing the transaction and expanding outside of Quebec. I know it's been almost a lifelong dream, so that's great. Two for me. One is, just want to clarify the CAD 200 million comment. When you acquire Freedom, we're to assume annual CapEx of CAD 200 million for now for Freedom, and that should cover off essentially everything excluding spectrum. Is that the right interpretation?
Yep.
Okay. On the core-
No, there's not gonna be. No, No. No. Wait a minute. For this year, yeah, for this, there won't be any spectrum. No, that's excluding spectrum. Sorry.
Yeah, yeah.
excluding spectrum.
Okay. No, I understood. On the Videotron side, so just the core business in Quebec, I think your last kind of updated CapEx outlook was for stability year-over-year relative to about CAD 450 million in CapEx last year. Does that still stand? Obviously, you have some clarity on, you know, other things inside Quebec, whether it was the relationship with Rogers or kind of 5G, continuing to be deployed. Any change to that previous type of outlook?
No, no, we're still on track for that.
Okay. Last one then for me. On the Freedom Mobile side, in terms of kind of integrating the asset into the broader Quebecor, have you kind of provided any roadmap there in terms of the extent to which the asset actually gets integrated? Maybe some synergies that can be realized along the way. Anything that you can give us would be helpful. Thank you.
Yeah. To, obviously, you know, you can easily imagine that, you know, we were considering in our due diligence the long time frame that, you know, we wait until we've been able to close the transaction. The different elements where we think that we will be able to improve our results and where we're gonna pick our savings in terms of those synergies that we were considering. It was quote-unquote easy for us, you know, day one, to implement them. I guess that probably, you know, the same for Rogers regarding Shaw, because they even waited even longer than we were. Those elements had been lined up, and we've been working on it.
That, you know, will be available, even. It's even there for a significant portion of it will be continued to be implemented with the weeks and the months to come.
Okay. Thank you.
All right. next question comes from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.
Good afternoon. Thanks for taking my questions. Two for me. First of all, just to go back to the cable business. In addition to obviously sort of the stability of the subs, you know, the core cable margins look to be stabilizing, particularly if we make, I guess, a small adjustment for VMedia. Can you perhaps talk to sort of the outlook there? I mean, based on the wireless EBITDA comment that you made, it sounds like cable EBITDA is almost stable. Any commentary around sustainability there and incremental tailwinds from your cost reduction efforts going forward? Secondly, is there an update that or some sort of color you can provide on sort of your executive team as you sort of look to English Canada and your plans there?
Where do you stand in that process? Thank you.
Okay. Well, on the cable side, as you know, you know, we have two platforms. We have the new one, Helix, which is Xfinity, Comcast platform, and our legacy platform. Our legacy customers are of a certain market segment. What we're doing is, you know, to make sure that we will continue to serve them with, you know, the product they want. The digital platform under Xfinity and Helix is obviously of greater quality, but not always, you know, what certain segment of customers will ask or will require.
We need to be clever and smart, I would say, marketing-wise, to make sure that, you know, we will do the proper offer at the proper segment without disrupting our legacy base, which are happy with the customer, the product that we're servicing. Cable is not only, you know, historical cable, we also provide, you know, video on demand and many other features that makes a lot of sense for customers. Also, as you know, we've been valuing added this service with strong content with Club illico and strong content with our media platform that is able to bring what our customer base is looking for.
I think that, you know, we to answer the question, there's a balance that is something that we work with touch, to make sure that, you know, we will keep as long as possible our legacy, which provide, you know, stable flow of return and making sure that, you know, our cable business is also digitally educated, quote-unquote, to make sure that it will fit. Especially with the bundle on the Internet, you know, what are the desires of a more sophisticated segment of customers. This is how, you know, we try to manage the balance. As of today, you know, we can say that we are happy with the results. On the management side, you know, I would say it is going very well. You know why?
Because people that work at Freedom have been working for a lot of them in the wireless business. Well, you know, we're also coming from the wireless business. We talk the same language. We have the same expertise. We work with the same suppliers. We know where, you know, we can improve our results. We know what are the challenges that our industry is facing. All this makes, you know, people talking together much easier than anything else. You will remember at certain point that, you know, maybe Freedom would be considered to be sold to whatever, you know, a hedge fund or another, you know, telecom company. I think this is the best outcome for Freedom employees to be part of a larger platform, and they understand this.
They understand that, you know, there's an interesting future. There's an interesting growth future for them. They will have the ability, you know, to participate and being part of this success. You know, every Tuesday from my perspective, unfortunately, not this week because I had another annual meeting for TVA. You know, I go there and, you know, we make our agenda lining up and work on the things that we know that will improve our future.
Thank you very much. I'll pass the line.
All right. Next question comes from David McFadgen, from Cormark Securities. Please go ahead.
Oh, great. Thank you. A couple of questions. Did you disclose your market share of the gross adds, wireless gross adds for Quebec? Maybe I missed it.
yeah, 25%.
25. Sorry about that. Okay.
With the 2 brands as usual, right? Yep.
Yeah. Yeah. Yeah. Question for Pierre-Karl. When you look at the three provinces that Freedom operates in BC, Alberta, Ontario, is there one of those that gets you more excited than the other two, and if so, why? Secondly, when you look at the Freedom Wireless Network, are there certain areas where you think there's more of an urgency for investment to get it up to speed relative to the rest of the network? Thanks.
David, I love all of them equally like my kids.
You make me cough.
The second question is interesting, David. I would say that certainly, you know, obviously, Freedom being coming from Wind and Wind being investing in Ontario more than elsewhere and even, you know, in the Toronto and GTA area, guess that, you know, obviously building the network there will not gonna be as large as, you know, if we were to compare to Alberta and BC. This being said, I'd like to refer again, you know, what I said earlier regarding the seamless handoff, you know, we will build and we will enlarge the wireless footprint, but we have seven years to do so.
We have plenty of time to make sure that, you know, we will coordinate our investments with what we consider being, you know, the, the biggest or the most interesting re-returns. I'm not saying that, you know, we have the opportunity of time, but in the meantime, we also added. We wanna, we're gonna pick, you know, where it worth more to invest, but we will certainly, you know, do it on the western side as it was done also in Ontario for the last few years before.
Okay. All right. Thank you.
All right. Our next question comes from Matthew Griffiths from Bank of America. Please go ahead.
Hi. Good afternoon. Thanks for taking the questions. Pierre-Karl, I think this morning you were mentioning how you're in the process of working on your marketing strategies and more will come in the coming months. You know, I don't, y ou know, I'm not really asking about the details, but if you could give some sense about, you know, what it is, like what the work streams are that you're focusing on. Are you preparing, you know, integrating systems that will be needed for a launch? Are you aiming for, you know, the back-to-school timeframe, the kinda Christmas holiday timeframe? Are you working on a rebrand of the Freedom brand? Are you working on is being brought into the Ontario and Alberta and B.C.?
Just, you know, the context about what it is that the marketing strategy is working towards in broad strokes. You know, separately, obviously you have these agreements with Rogers that help enable you to be more competitive or more profitable. On the wireless side, you know, we've seen Freedom, you know, offer more data in the out-of-footprint areas. I was just wondering, you know, is this the kind of end state about, you know, what you think is needed to make those packages competitive against the incumbents? You know, is that a work in progress and more is gonna come on that front? Thanks.
Thank you, Matthew. You said that you will understand that, you know, I'm not gonna be able to give the details. You know, you continue with a lineup of certain things that we can do. You know, I will say, and I will answer that. You know, we certainly, you know, we think that there is a lot of things to do. You know, we will not reinvent the wheel. There are certain things that have been done previously and shows it works. Maybe what we can say is from our perspective that probably we have more alternatives than, you know, what we would had five or 10 years ago, given, you know, that the landscape is larger and the footprint also.
You know, I know that it will be certainly, you know, not what you were looking for as an answer. In the meantime, I guess that you will understand I can't say too much. Here we are. On the wireless, would you repeat? I'm not sure that I have completely your question, Matthew, which was, I guess, at the last portion of the.
Yeah. I can, you know, kind of reiterate it more briefly. You know, one of the challenges with the Freedom Wireless offering was their out-of-footprint data allotments just massively smaller than what you would get when you were roaming on the Freedom. When you were using your device on the Freedom network. Those very small allotments of data are slightly larger today post the transaction. Presumably, that's an element to make those plans more competitive. Presumably, your agreements with Rogers help you to do that in a profitable way. I was wondering if, as they stand today, if you believe that this amount of data, when you're off of the Freedom network, is sufficient to make that a compelling offer for subscribers, or do you think it's still a pain point?
Yeah. Okay, good. I have it. Well, it's true, Matthew, that data is certainly, you know, a portion of growth, which is significant. In fact, you know, I guess that data would certainly, if not already, you know, surpass voice. Therefore, you know, we're obviously, you know, quite, we're bringing the proper attention, you know, for this purpose. I would say that two things that, you know, will give you an indication of where we're going. Again, it's the roaming prices. Yes, it's true that data is certainly of importance. Yes, it's true that it depends on roaming where we are not on our footprint.
Certainly, you know, we will continue to grow, you know, the footprint of the wireless network of Freedom, but we will also, you know, use data on roaming basis. Which again, as I previously mentioned, we consider going south, other than to see, you know, the CRTC and ISED intervening in a significant portion of what cost is all about in the wireless business. Seamless, not completely on data, but a seamless handoff is also of something that will bring higher quality and then therefore makes our product equivalent to the incumbents. That would be my answer, Matthew.
Okay. If I could just have a follow-up. I appreciate that you know, you're sensitive to giving away plans. Are you finding that the delays that the review of the transaction went through, you know, is that gonna hurt you competitively as you enter the busier periods of the year in the back half? Do you feel like you're planning for the, you know, integration and all of the marketing work you have to do, you know, is sufficiently advanced that Freedom will not once again be somewhat handicapped during those very busy selling seasons of like, back to school and the holidays?
Well, I would say yes and no. Yes, you know, we would be happier if, you know, the transaction had closed previously. No, because, you know, we have the proper tools to get job done on the advertising side. Obviously, we're in this business, so we are familiar what the issue are all about. We would not be, you know, surprised to see a replication of what the incumbent did at the last, you know, was special events like Black Friday and holiday seasons. In fact, you know, they've been repeating this all the time. Will this be more aggressive, you know, this time? This we don't know.
You know, again, we're not gonna be surprised of any, anything that goes aggressive. We have access to the phone. You know, we have access to accessories. Maybe the thing that, you know, we would like to improve in the near future, and as you probably know, that the commerce or the marketing vehicle or the sales channels being used by Freedom was, you know, I would say almost exclusively retail.
You know, what we are expecting to do is to enlarge those sales channels, to have access, you know, a transactional website, to have call centers that also will make, will pick and activate subscriptions, and other tools that we've been using quite successfully in Quebec and for which we have experience and expertise, and therefore being in use for, you know, having a larger capacity of getting customers where they are and when they want.
Thank you very much.
All right. Last question comes from Vince Valentini from TD. Please go ahead, Vince.
Thanks very much. First, can I just clarify a couple of things on your current Quebec business and then maybe a couple of questions on Freedom? The wireless EBITDA growth at 13%, that mathematically would mean there was a very small decline in the wireline segment EBITDA. Is that correct you?
Well, it was flat actually. It may be rounding a little bit, but wireline was flat basically and yeah. Wireless was around 13%, yes.
Fair enough.
Okay.
The second one is on TV or video revenue. It was up year-over-year. We haven't seen video revenue up for a heck of a long time. Maybe that should just be media, but even in the fourth quarter, you own VMedia for the whole quarter. Video revenue was still down year-over-year. Is there something going on there in video with sort of, you know, temporary, you know, pay TV purchases or rate increases or something? Is it just VMedia?
Yeah. No, no, no, it's not all. It's not. VMedia is actually a small. It's a smaller portion. It's part of it, but it's a smaller portion of it. It's basically rate increases and the fact that we've been successful at slowing down the rate of cutoff, you know, when we compare it to last year. That just. Anyway, it's. You know, I have to be honest, mostly it's rate increase and more stability. A little bit of it is VMedia. There's nothing, you know, there's nothing, there's no one-timer or anything specific going on here, no.
The rate increase benefit should still be there for another couple of quarters, I assume. Unless you lose-
Yeah.
A whole bunch of your subscribers, you could stay.
No
Positive for a little bit?
Yeah. Actually, it wasn't even there for the whole first quarter. It'll be a bit more of a pickup in Q3 and then in the rest of the year, yes.
Let me just try to ask on Freedom a couple of different things. When you got into wireless in the first place in Quebec like 15 years ago, you gave us some long-term targets. You wanted to get to 20% market share. You've since exceeded that and then raised that target, which is great. You were willing to give us something. Are you willing to give anything on Freedom of whether it's, you know, number of subscribers or percentage market share, any sort of longer term aspirations?
I guess, you know, Vince, you would like to have something, eh? I would say This was quote, unquote. Well, not completely, but I guess a little bit different. Other management, I guess it's too early for us here to have a full assessment of, you know, a complete answer. That doesn't mean that, you know, we're gonna give one at next quarter or in the quarters to come. You know, I guess that, you know, we are certainly looking more, you know, on delivering the goods than giving projections or guidances. Well, you know us and, you know, we maybe we're a little bit boring because of this, yes, you know, we are where we are or we.
Yeah.
Yeah. We are where we are. Yeah. Sorry about this, Vince.
I don't think anybody calls you boring, Pierre-Karl, just to be clear.
Well, I'm calling myself boring. Not being able, you know, to give guidance.
That's a good one. That's a good one, Vince.
Maybe I wanted to just try to clarify one last thing before we end the call. The 5G was asked about before. You made some commitments, I think, to ISED, that there would be a rollout in a certain timeframe. Is that still the case that at least some of the Freedom network will be upgraded to 5G and customers will be able to start using it within three months or so of the transaction closing?
Absolutely, Vince.
Okay. Great. Thanks very much.
If we were not to deliver, we would not say it. Good. I think, Vince, it was the last question. To all of you, thank you very much attending this conference call, and let's hope that we're gonna be able to talk to each other at the next quarter.
This concludes the Quebecor Inc.'s financial results for the 2023 first quarter conference call. Thank you for your participation, and have a nice day