Good morning, ladies and gentlemen. Welcome to the TELUS 2020 Q3 Earnings Conference Call. I would like to introduce your speaker, Mr. Robert Mitchell. Please go ahead.
Hello, everyone. Thank you for joining us today. Our third quarter 2020 results, news release, MD&A, and financial statements and detailed supplemental investor information were posted on our website this morning. On our call today, we will have remarks by Darren Entwistle, President and CEO, Jeff Puritt, Executive Vice President and President and CEO of TELUS International, and Doug French, Executive Vice President and CFO. For the Q&A portion of today's call, we also have Zainul Mawji, President of Home Solutions, Jim Senko, President, Mobility Solutions, François Gratton, Group President and Chair of TELUS Health and TELUS Québec, and Tony Geheran, EVP and Chief Customer Officer. Briefly on Slide two, this presentation and answers to questions contain forward-looking statements that are subject to risks and uncertainties and made based on certain assumptions.
Accordingly, actual performance could differ from statements made today, so we ask that you do not place undue reliance upon them. We disclaim any obligation to update forward-looking statements except as required by law, and we refer you to the risks and assumptions as outlined in our public disclosures, including third quarter 2020 MD&A and 2019 MD&A, and filings with securities commissions in Canada and the U.S. With that, over to you, Darren.
Thanks Rodrigo, and hello, everyone. For the third quarter, TELUS once again achieved strong operational and financial results characterized by excellent execution, resulting in industry-leading and record-high customer growth of 277,000 net additions. This accomplishment, realized amidst an unprecedented operating environment, reflects the effectiveness of our world-leading performance culture underpinned by our highly engaged team. Indeed, TELUS' recent recognition as the top Canadian organization on Forbes' World's Best Employers ranking is a testament to the skill, passion, and grit of our high-performing global team. Leveraging this differentiation alongside the strength of our digital capabilities and product superiority, we continued to achieve robust customer growth in both wireless and wireline in the quarter. Furthermore, this achievement was supported by strong and enhanced customer loyalty across key product lines, backed by the TELUS team's dedication to delivering premium customer experiences over our world-leading wireless and fiber broadband networks.
In Q3, consolidated revenue was up 7.7%, whilst EBITDA decreased moderately by 0.6%, reflecting pandemic-related impacts. Thanks to our team's resiliency, including a relentless focus on improving our cost structure and realizing important growth opportunities, we mitigated some of the downside pressures. Notably, had it not been for the exogenous net impact of COVID-19, EBITDA would have grown by approximately 5% at the consolidated level for TELUS. Let's take a look now at our wireless business. Third quarter network revenue decreased by 2.9% as our consistent focus on strong and profitable growth continues to be impacted by reduced roaming revenue. Wireless EBITDA was down 1.6%, partially mitigated by an intense focus on cost management. Leveraging the strength of our superior customer experience, our world-leading wireless network, and differentiated digital channels, our team achieved a robust 111,000 mobile phone net additions in the third quarter of 2020.
In terms of connected devices, we realized strong net additions of 87,000, up 6% on a year-over-year basis. Overall wireless net additions, inclusive of mobile phones and connected devices, were 198,000 in the quarter, up 3% over last year. Importantly, our team delivered another quarter of best-in-class loyalty results. Notably, blended mobile phone churn was 0.99%, representing a 10-basis-point improvement over last year, and it represents the third consecutive quarter of blended wireless churn at sub 1%. Underlying this result, postpaid churn of 0.85% was better by three basis points compared to last year. TELUS' broadband network continues to perform exceedingly well through the current environment, characterized by evolving usage patterns. The efficacy of our ongoing technology investments is again reflected in numerous awards from leading independent network authorities.
By way of example, U.K.-based Opensignal ranked TELUS as having the fastest network in the world in their September Global Mobile Network Experience Awards. This award builds on our multiple third-party acknowledgments, including U.S.-based PCMag ranking TELUS as having the fastest mobile network in Canada, U.S.-based Ookla recognizing our mobile network as the fastest and most expansive on a national basis, and finally, Canada-based Tutela placing TELUS first in respect of quality, latency, and download throughput across our national wireless network. Each of these accolades have been received now for three or more years in a row. As we continue to roll out our 5G and our fiber networks in the months and years to come, Canadians will continue having access to the world's best speed, the world's best quality, and the world's most expansive coverage.
To close on our wireless results, both ARPU and ABPU declined by approximately 5% in the quarter. This reflects industry-wide pressure on roaming associated with pandemic-related restrictions and reduced travel, whilst at the same time, we continued to thoughtfully migrate our base to our endless data plans and hold the line on our premium brand ARPU. Importantly, we continue to pursue strategies focused on offerings with attractive economic characteristics, including the strong and steady adoption of our TELUS Peace of Mind data plans and family discount offerings, contributing to more than 60% of all rate plan changes being either step-ups or flat in the quarter, a 10% increase as compared to Q2. TELUS Easy Payment device financing plans, all of which are performing exceedingly well.
Additionally, we continue to seek out and secure new avenues of wireless revenue growth in high margin areas with respect to Internet of Things across numerous important verticals for our company. We remain enthusiastic about prospects in this space and the opportunities that the increased commercialization of 5G will unlock in terms of new growth curves that initiate expansive revenue and EBITDA growth, and as well, cash flow accretion, allowing us to further monetize our critical network investments. These growth opportunities include catalyzing dramatic innovations in health, educational, environmental, and socioeconomic outcomes, and as well, enabling our entrepreneurial spirit in Canada and improving our productivity and innovation, including facilitating major advancements in AgTech, smart cities, and home automation, to name but a few. Turning now to our wireline results. TELUS once again delivered a very strong quarter.
Third quarter wireline revenues increased by 18% and EBITDA increased by 1.6%, reflecting the increased contributions from TELUS's Internet growth and our Smart Security T echnology, as well as TELUS International delivering once again. TELUS's wireline financials were driven by data revenue growth of 23% through a combination of higher revenues from our diverse portfolio of services and solutions. This includes robust growth in Internet and third-wave data services, as well as a resilient performance in TV. It also includes strong growth in home and business Smart Security Technology, amplified by the inclusion of ADT Canada. Our growth includes increased revenues from the hyperscaling of our virtual healthcare solutions, and as well, the resilient performance at TELUS International, inclusive of our successful CCC acquisition that we consummated last year.
As we indicated at that time, we continue to move forward with the plans for the TI IPO, which we are now targeting for the first quarter of 2021. Whilst we have seen some recovery, we continue to experience transient offsetting COVID-19 related impacts from some business customers as they navigate their own pandemic-related headwinds, as they postpone certain activities, and TELUS has to postpone our own activities, including price increases that were postulated across our customer base, as well as absorb impacts related to site closures or restricted access in respect of TELUS Health and our TELUS International operations. Wireline profitability was impacted by the flow-through of the aforementioned impacts of the pandemic in the quarter, as well as costs associated with strong customer growth and the dilution from J-curve investments in critical growth areas such as security, health, and our AgTech investments.
This was all partially offset by strong cost containment across our business, which is a hallmark of our organization. Looking at our robust customer expansion in wireline, we achieved third quarter internet net additions of 50,000, an increase of 18,000 additions year-over-year and our highest quarterly loading since 2002. This was further supported by an internet churn rate below 1%, which alongside an up to 25% increase in monthly recurring revenue of new consumer additions, bodes well for future lifetime economics from our HSIA business. We also realized healthy TV net additions of 19,000, including a double-digit churn improvement to 1% within our Optik Operations. Notably, residential voice line losses came in at 8,000 in Q3, representing an impressive 4,000 improvement over last year and the lowest quarterly residential voice line losses since 2004. Furthermore, industry-leading security additions of 18,000 at TELUS were up 4,000 on a year-over-year basis.
These results underscore the unique and attractive bundled offers available to customers across our superior product portfolio and our team's focus on leveraging the competitive differentiation inherent in our TELUS PureFibre network. As a result, total wireline RGU net additions of 79,000 were up 26,000 year-over-year, which is a notable achievement for this organization on any occasion, let alone within the throes of the contagion. During the quarter, our team expanded our TELUS PureFibre coverage to approximately 78% of our high-speed broadband footprint, a positive progression for 5G as well, given the significant synergies that exist between the two technologies. The synergies between fiber and 5G, which is indeed extremely potent. Like our wireless network, our fiber network continues to receive important recognition, and boy, have we come a long way in respect of our TELUS PureFibre footprint and all that it enables.
Notably, U.S.-based PCMag recently ranked TELUS as the fastest internet service provider in Canada. This reinforces PCMag's previous recognition of TELUS as best for gaming in 2020 amongst our country's major providers, and this is only going to become amplified with the progression on the 5G front enabled by the underlying fiber network when we think about low latency applications, including mobile gaming. On the back of a very strong third quarter performance operationally and financially, earlier today, we announced the resumption of our Multi-Year Dividend Growth Program, which is now in its 10th year. Again, we are targeting annual growth between 7% and 10% through 2022.
The 7% increase reflects our confidence in the outlook for our business, the sustainability of our strong results both operationally and financially, as well as our robust free cash flow generation and expected continued significant free cash flow expansion prospectively as we're now entering a period where chronically our sources of cash will exceed our uses. This marks the 19th dividend increase since 2011 and reinforces the strength of our financial and operational performance, which has enabled us to successfully execute on our industry-leading shareholder-friendly program in combination with a strong balance sheet and excellent liquidity. Notably, TELUS has now returned nearly CAD 19 billion to shareholders, including CAD 13.6 billion in dividends, representing approximately CAD 15 per share since 2004, which represents an enviable and atypical track record.
As we continue to advance our broadband leadership and winning go-to-market strategy backed by our globally recognized culture and industry-best customer experience, we remain highly confident in the opportunities before us to further accelerate our growth strategy, particularly with the significant digital acceleration that's happening within both our economy and our society. Speaking of growth opportunities, earlier this morning, we announced the planned acquisition of Lionbridge AI, a market-leading global provider of data annotation services used in the development of AI algorithms to train machine learning models. This acquisition advances TELUS's commitment to harness the power of technology and data to provide outstanding customer experiences on a global basis. Lionbridge AI will help accelerate the digital transformation and strategic growth journey of TELUS International by adding key capabilities and diversity to its suite of next-generation digital solutions, which Jeff will talk about in a moment.
It's highly complementary to the investments and the scale that we're already building in content moderation. Our planned IPO of TELUS International in Q1 will amplify this asset as a strategic growth vehicle for TELUS by supporting continued organic expansion as well as progression in key areas through selective, smart acquisitions that we can ingest, implement, and deliver future organic growth prospects upon. As we manage through the ongoing global pandemic, the TELUS team continues to do good in the communities where we live, where we work, and where we serve.
Notably, we expanded our Internet for Good program in the quarter and have now provided low-cost, high-speed internet to 68,000 low-income family members and people with disabilities. Similarly, through our national Mobility for Good program, we've enabled 20,000 kids making the difficult transition out of foster care and vulnerable Canadians with free smartphones and free data plans to help them stay connected to what matters most as they endure that difficult transition. Our team's commitment to improving outcomes for our fellow citizens, in concert with our leading operational execution and superior asset mix and culture, continues to define TELUS's leadership in social capitalism, not just in Canada, but on a global basis. This was further reinforced by The Wall Street Journal, which ranked TELUS 29th in their 100 Most Sustainably Managed Companies in the World Report and 15th globally in respect of the subcategory of social capitalism.
This international study assessed more than 5,500 publicly traded companies based on numerous sustainability metrics as well as leadership and governance practices in respect of creating value for shareholders over the longer term. Clearly, ethical investing is front of mind within this contemporary period that we live in and all the changes that we're going through economically and at a societal level. Impressively, TELUS is the only telecommunications company worldwide and one of only three Canadian companies named to this global list, a truly outstanding achievement by the team, and I remain exceedingly proud and grateful to the entire team in that regard. On that positive note, Jeff, I'm going to hand the call over to you to talk about the exciting progress at TI.
Thanks very much, Darren. Hello, everyone. We're very pleased today to announce our agreement to acquire Lionbridge AI, a leading global provider of cloud-based training data and annotation platform solutions. Lionbridge AI is one of only two globally scaled managed data annotation service providers in the world, preparing high-quality data that's critical for the development and training of AI algorithms for some of the world's largest technology companies in social media, search, retail, and mobile. With a crowdsourced community of more than 1 million professional annotators, qualified linguists, and in-country language speakers located across six continents and competent in over 300 languages and dialects, Lionbridge AI can source multilingual training data to build premium ground truth data for text, images, videos, and audio.
As the development and adoption of artificial intelligence applications continue to accelerate and proliferate the market, new economy services such as data annotation have strong tailwinds due to AI's dependence on digital foundations that must be trained on large amounts of clean, accurate, reliable, and unbiased data. The continued growth of the data annotation market will be driven by factors including the increasing sophistication of AI models that are driving demand for customized data, adoption of AI beyond big tech with use cases across a wide range of industry sectors, including agriculture, e-commerce, telecommunications, and healthcare, driven by our desire for convenience and efficiency in our daily lives. The continuous trend of new emerging technology verticals that rely on AI, such as robotics and autonomous driving, and today's brands' desires for enhanced digital CX solutions such as product recommendations, relevant search engine results, speech recognition, and chatbots.
The acquisition of Lionbridge AI will be immediately financially accretive, reporting 2019 revenue of approximately CAD 260 million, which was up 29% year-over-year, and an EBITDA margin consistent with TELUS International's 20%-25% range. Throughout 2020, Lionbridge AI has been resilient in the face of COVID-19, and on a year-to-date basis has generated revenue of approximately CAD 230 million, up from approximately CAD 190 million in the same period a year ago. CapEx intensity for Lionbridge AI is in the low single digits, driving strong simple free cash flow conversion. With an anticipated closing date of December 31st, 2020, I'm excited at the prospect of welcoming the entire Lionbridge AI team to our TELUS International family in the new year. Our combined expertise and capabilities will accelerate our expansion into new AI markets and deepen our existing relationships with the valued brands we partner with around the world.
Turning quickly now to our Q3 performance. Despite persistent challenges stemming from the global pandemic, TI continued to be resilient, delivering strong financial and operational results, thanks to our highly engaged global team that remains focused on putting our customers first. On a year-to-date basis, TI's revenues well surpassed CAD 1.5 billion, including double-digit organic growth. We were also able to maintain strong EBITDA margins at the high end of our targeted range whilst delivering strong simple cash flow underpinned by TI's mid-single-digit CapEx intensity profile. These results are mainly attributable to growth in our business volumes, resulting from both expanded services to our diverse base of existing clients as well as new client growth.
While we've begun to welcome a small percentage of our global team members back into our delivery centers, we're extremely mindful of their health and safety, and our regional operations leaders are coordinating closely with local health authorities and governments, and with our clients. Our success in enabling over 90% of our frontline team members to work from home, and our ability to bring our culture to life in a virtual environment, positions us to continue delivering exceptional service to our global clients on a sustainable basis as we navigate through this prolonged pandemic. Let me now turn the call over to Doug for a detailed update on TELUS's Q3 financial results. Doug, over to you.
Thank you, Jeff, and congrats. In spite of the challenging environment, we once again demonstrated strong resiliency with 111,000 mobile phone net additions, which were flat to the prior year. Within our Q3 mobile loading, prepaid loading was down on a year-over-year basis. As a reminder, we do not include tablets in our mobile phone addition metrics. We continue to see a strong shift mix towards our premium TELUS postpaid brand. We achieved this result while being focused on high-quality loading and reducing non-recoverable COA and COR in the face of intense promotional activity across the industry. This will benefit both our current and future ARPU and network revenue growth. The Q3 network revenue decline of 2.9% includes a decline of approximately CAD 67 million from lower roaming revenue, as travel remained restricted throughout the quarter.
Given the current outlook of the pandemic, we expect that this roaming headwind will persist into 2021. Mobile phone ARPU declined 5%. However, this decline would've been approximately 1% excluding the COVID-19 impacts. The underlying improvement in our network revenue and ARPU trends on both a quarter-over-quarter and year-over-year basis are reflective of our consistent focus on high-quality loading and profitable customer growth. Overall, Q3 wireless adjusted EBITDA declined 1.6%, reflecting the loss of high-margin roaming revenue as a result of the ongoing pandemic. Wireline external operating revenues increased by 18% year-over-year, as we continued to see strong contribution from acquisitions as well as organic growth. Similar to wireless, we maintained excellent momentum in high-quality loading. We continued to see strong product bundling across our base, including a quarter-over-quarter increase in the number of customers that bundled our mobile and home offerings.
On the B2B side, the impacts from a challenging economic environment continued to pressure growth. In spite of these macroeconomic headwinds, we continue to thoughtfully pursue opportunities to recontract existing customers and earn new sales by providing innovative and next-generation solutions to our business customers. Within TELUS Health, we saw a quarter-over-quarter improvement in the clinic-related revenue as our clinics reopened across the country. However, the activity is still below business as usual. TELUS Health continued to face pandemic headwinds. A breakdown of our major COVID-19 impacts is shown in our investor presentation. On a consolidated level, adjusted EBITDA declined by 0.6%. However, EBITDA is estimated to be more than approximately 5% excluding the pandemic-related items. Our results were supported by our continued focus on driving margin-enhancing initiatives and cost efficiency savings.
Of the CAD 250 million goal that we set for ourselves, we've achieved almost 90% at the end of the third quarter and are confident in our ability to meet or exceed that goal by the end of the year. In terms of bad debt, we continue to see good collection cadence and have accrued appropriately for the current risk profile of our customer base. Consolidated CapEx of CAD 741 million was down CAD 7 million compared to last year. We continued to be opportunistic with our capital spend and took advantage of cost efficiencies by accelerating certain projects, including our fiber build in Calgary. In addition, we had higher success-based capital in conjunction with our leading wireline RGU growth.
We have provided a high-level breakdown of our capital and where it's being allocated in our posted slides, including confirming 2021 capital to be similar to 2021 or 2020, sorry, at approximately CAD 2.75 billion. Free cash flow of CAD 161 million was down CAD 159 million versus last year. This is primarily due to the timing of income tax payments. As you may recall, various government jurisdictions permitted installments to be deferred from the first half of the year into Q3. The deferred amount paid in Q3 was CAD 110 million, the remaining free cash flow decline was due to device financing related to our high-quality loading profile. On a year-over-year basis, free cash flow of CAD 1.2 billion is up more than 50% over the prior year.
With this strong momentum, we continue to execute towards achieving the lower end of our free cash flow target set in February of this year. Additionally, as we build on strong and resilient year-to-date results, we continue to strive towards flat EBITDA growth for the full year.
I'm once again very proud by the consistent execution, resiliency, and operational excellence that the entire organization has shown this year. I'm confident that we'll continue demonstrating that throughout the remainder of this year and to 2021 and well beyond. Robert, back to you for Q&A.
Thanks, Doug. Mike, can we proceed with the questions now, please?
Of course. I would just like to remind everyone, if you wish to ask a question, please press zero one to queue up. The first question comes from Simon Flannery from Morgan Stanley. Please go ahead.
Great. Thank you very much. Good afternoon. Good morning. On the 5G, thank you for the disclosure on the rollout there. Perhaps you could just give us some more color about where we go from here, and what are the sort of use cases that you're seeing as most promising in the near term. Any comments around the competitive environment, particularly with the new iPhone out there, how do you think this year compares to prior years, given COVID and everything else? Thanks.
Thanks, Simon. Why don't I kick it off, and Jim, then maybe I'll ask you to top up at the applications layer, and also talk about the iPhone 12 launch and the competitive environment. As it relates to 5G, Simon, as I've told you before, this is a journey, not a sprint. A journey that's going to be synchronized with the increasing availability of spectrum, from mid-band, with the 3.5 auction at the midpoint next year, and then millimeter wave coming online after that. It's a commercialization that I would see running into 2023, 2024, as greater swaths of frequency, i.e. bandwidth, become available, which will amplify some of the exciting applications that we would like to deliver on the 5G front, particularly as it relates to certain verticals that we are very well poised to address.
If you look at where we're at right now, roughly, in Canada, we're covering about 34 markets across the Canadian landscape, which would roughly equate to about 22% of the population, and we're generating speeds in the 1.7 gigabit per second zone. Over the remaining months of the year, we want to exit 2020 with a build program that would see us in circa 50 communities across Canada, bumping up against 30% of the population and amplifying the speed a little bit from a tweaking point of view, closer to 2 gigabits per second at that particular time. We've got about 150,000 users right now on 5G, which is going to get amplified, given what's going on within our OEM ecosystem and what you saw with the iPhone 12. We've got about 10 device models right now within the totality of our vendor ecosystem that are 5G enabled.
Importantly, 5G is entirely tethered to our Peace of Mind endless data plans because we want to make sure that as we launch this new technology, we set ourselves up for economic accretion in that regard. I think it's also important to point out that once again, a hallmark of the way we roll out technology and infrastructure in Canada, we're not singularly focused on urban markets, but as we have done with every single wireless technology deployment since 2000, we are as focused on our rural build as we are on our urban build. We'll be leveraging our low-band frequencies to support the rural expansion of 5G, which I think is important to make sure that the digital economy and the digital society is inclusive for all Canadians regardless of where they live.
I think we're pretty excited about what it can mean to both our digital economy, and our digital society, in terms of innovation and productivity, which is going to be important as it relates to the COVID recovery. I think COVID has also provided a digital acceleration, which is going to expand the use cases, as both businesses and consumers seize the digital transformation thesis. The other thing that, Simon, you and I have spoken about for the past decade now, is the synergistic relationship between wireless technologies and the underlying wireline network that does the front-haul delivery and the backhaul redistribution. I think TELUS is pretty unique on a global basis with our potent combination of fiber and 5G. That's a major differentiator for us now and into the future, particularly given how scaled our fiber deployment is in that regard.
It's amazing because it's not a situation where we're deploying 5G out of necessity when we're already leading the world on wireless speeds, coverage, and reliability with our 4G networks, where our 4G technology is beating 5G technology in other jurisdictions as it relates to speed, coverage, and reliability, which puts us in an exceedingly good position to be winning on 4G and beating other jurisdictions on 5G as we begin to scale and amplify our 5G footprint across the Canadian landscape. The other thing, of course, is important to make sure that investors are mindful of is that we've had a very fruitful 20-year network sharing alignment with Bell.
When it comes to new technology deployment, when you can leverage two labor pools and two balance sheets to ensure that your speed of deployment, your coverage, and the depth of your network is second to none, that again is a nice asset differentiator for us. Then just before I hand it over to Jim, we're very excited about the applications on the 5G front, whether it's in the private sector or whether it's on a consumer basis and what we're doing in a wider home automation ecosystem.
When you think about what 5G is going to mean to the productivity of society and some of the areas that we're focused on a verticals basis, whether it's health, whether it's AgTech, whether it's supporting some of the activities at TELUS International, or whether it's more precisely allowing us to better leverage data analytics and the monetization of the voluminous data generated by 5G, I think the opportunities here are going to be very exciting indeed, particularly with some of the verticals that we're already deeply focused on the health and the ag front, and the positioning that TI has set themselves up for as it relates to content moderation and data annotation. Finally, when you think about economics, we're very AMPU-focused because one of the things that doesn't get discussed on 5G is cost efficiency or cost per gigabyte.
To the extent to which the cost per gigabyte is going to drop, it's going to allow us to do two things that typically have been quite challenging, if not mutually exclusive, which is offer increasingly improved affordability for businesses and citizens, and at the same time, improve our margins because of those cost efficiency characteristics. That's where we're at on build technology, data, and infrastructure, and a bit of a flavor on some of the verticals that we're focused on, and how we're going to leverage things like network slicing or low latency or edge computing to facilitate those applications. Why don't I hand it over to Jim to just say a couple of words, and then he can transition to answer your next question.
Thanks, Darren.
Thanks, Darren, and hi, Simon. On the consumer side, we see 5G being a real tool for us to drive a step up into our Peace of Mind premium rate plan suite. They kind of go together like hand in glove. The initial opportunity is driving that step up from lower plans up into Peace of Mind. The second phase of that is that as devices get out there, speeds are up, lower latency. We expect bigger data buckets, higher data usage, more connected devices, and also content-type applications on mobility, which will drive our customers in the premium space up to higher rate plans and what we call Peace of Mind Connect. Number one, driving a step up to Peace of Mind. Number 2, connected devices, applications driving a further step up and more data usage.
I think also, we're going to see IoT applications coming into the consumer space, and we're in a great position with smart home, so home automation, connected health, connected car. On the enterprise side, we expect 5G to help drive solutions in agriculture, remote healthcare, autonomous vehicles, and we also believe there's a significant opportunity around manufacturing and campus-based private 5G deployment opportunities. We're very optimistic. All of that to say, it's going to happen gradually over 2021 as devices roll out and as the footprints expand. I think also the cost of premium devices right now, given COVID, may influence take rates in the short term, but we're bullish in the longer term. With regard to your question on the iPhone 12, we saw very strong demand during our pre-registration and pre-order. It was up almost double year-over-year.
Coming into market, there are inventory constraints right now, which is holding back demand. We're seeing a very good take-up to that device.
Great. On the promotional activity, the competitive environment?
On the competitive side, in Q3, we saw a pretty significant increase in promotional activity. The delayed iPhone launch drove back-to-school promotions through September, which is quite unusual in Q3. In the West, we saw the most aggressive promotions were in the flanker space and sparked by Shaw Mobile. One of our non-Shaw competitors really led on bonus data subsidy and gift cards right down to rate plans of CAD 45. We were disappointed in the level of promotional subsidy in Q3. We believe there are other ways to drive device affordability and recover that residual value of the device through things like trade-in programs and certified pre-owned. We think going forward, having Mobile Health Clinic puts us in a great position to do those kind of things. Our goal is focused on high-value loading and continuing to drive the shift to Peace of Mind.
We'd much rather add value at CAD 75 than at CAD 45. Right now, as we enter Q4, October has been pretty disciplined. It's looking more like a typical September month with the iPhone launch. We do expect promotional activity to pick up with Black Friday.
Okay. Great color. Thank you.
Mike, next question, please.
All right. Next question comes from Tim Casey. Please go ahead.
Yeah. Hi. I wonder if you could talk a little more about TI and the acquisition. In lay terms, can you walk us through what this new entity will provide for you in terms of capabilities to deliver to the end user, or is it more about driving efficiency within the organization? Maybe if you could just in round numbers, maybe could you update us on what the pro forma financial profile and growth profile you expect from TI? Lastly, with respect to the IPO, could you remind us what your equity position is now? What you expect it will be post-acquisition, pre-IPO, if you follow what I mean. Are you still focused on retaining a majority position of equity in TELUS International, or is it more about control? Thanks.
Jeff, why don't you handle the question, and Doug and I can top up as required. On the pro forma basis, that's a bit of a no-go zone for us. I think Jeff can give you a flavor of our growth profile, but give you a very good explanation as to what the data annotation is all about and why we are bullish on it. Doug and I can top up on Jeff's comments as required in terms of the current and prospective equity position. Over to you, Jeff.
Thanks, Darren. In a nutshell, data annotation, as you may know, is really the function of providing the source data, the labeling, and the underpinnings of building AI-driven algorithms. Lionbridge AI's expertise is really around the labeling and annotation component of that ecosystem where they are preparing the data for labeling. They're recruiting a workforce, in this case predominantly a crowd-based workforce who have the relevant skills, whether it's language, domain expertise, et cetera, onboarding that crowd to a platform, ensuring that that crowd is trained appropriately, ensuring they're qualified and tested properly, arming that crowd with tools and workflow capabilities to allow and enable them to work more quickly through terabytes of data.
The crowd then tags, annotates, classifies, moderates that data and submits it back to the engineers that are using that annotated data in order to build, train, and refresh their AI algorithms, which are then used for a myriad of purposes around search and advertising, just by way of example. We see that as a natural adjacency to our content moderation capabilities, which we've built and now scaled materially through our recent CCC acquisition that we consummated in January of this year. The growth profile for this industry globally is double digits starting with a two. Although the hyperscalers represent the lion's share of the community that are leveraging this capability today, we see a near and longer-term opportunity as AI proliferates across really every facet of industry and commerce, as I referenced in my comments earlier.
We see that as a really exciting element of our overall growth ambition and profile for TELUS International going forward as we continue to leverage digital transformation on behalf of our customers. I'll hand it back to you, Doug and Darren, for the balance of the response.
Doug, you want to top up on the equity positioning in a loose sense, if you will?
Sure. If you remember when Baring made their investment, it was approximately a third. The ratio is relatively still in that zone of 2/3 TELUS, 1/3 Baring. After post-IPO, we expect to still be mid-50s of ownership. For the long term, we expect to control. Whatever structure that would take to do that is probably the best guidance I can give you.
The very long term.
Yeah.
This is a core asset for us and an important asset for us. We can only do that with the support of TI given the talent suite that they bring to bear. The other thing that's critical for us is that TI is a leading practitioner of facilitating digital transformation. That, for us, is huge because it's TI supporting TELUS's digital transformation, where we've enjoyed great success, but it's also TI productizing that capability set and supporting other organizations within their targeted verticals go through their own digital transformation strategies.
Thank you.
Mike, next question, please.
All right. Next question comes from Jeff Fan from Scotiabank. Please go ahead.
Thanks. Good morning. Just a quick follow-up on TI and then a bigger question regarding competition. Just on TI, with respect to this acquisition, can you just give us the debt and equity and how you're going to finance this? It sounds like it's going to be debt issued at TI. Just wanted to see if we can get the split and what TELUS's equity position would be after this acquisition. The second question, probably for Darren, regarding the competitive environment in Western Canada. I guess I'll blend the wireless and wireline into this question. Your cable competitor is now willing to really price aggressively in their wireless bundle. I know TELUS in the past. Continues to differentiate on products and bundling and customer service.
When your competitor does something like this at the price point in order to try to strengthen their internet base, how do you see the competitive landscape, I guess, both on the bundling and wireless and wireline individually evolve in Western Canada?
Okay. Thanks, Jeff. Doug, I'll let you kick it off. You can hit this nail on the head pretty quickly, and then, Zainul, I'll hand over to you, and then I'll top up accordingly. Doug?
Yeah, got it. The before and after will be the same ownership for TELUS and Baring as we're going to proportionally put in whatever cash is required. We're still looking at the exact ratio of debt financing and an increase in the debt facility at the TI level versus the cash that would come from ourselves and Baring. I think the wonderful thing about this asset, and Jeff highlighted it, very high growth, very low capital, so they also de-lever extremely quickly as well. It's a very quick payback on de-levering from any of that increase in that debt facility.
Maybe one of the things that we can do as an additional piece of data insight is to show the TI leverage concurrent with the CCC acquisition, and where it is X months hence past the CCC acquisition to actually give a metric on the speed of de-leveraging by looking at the two data points, what it was when we consummated the deal, what it is today. I think that would be very indicative and good data analytics for the street to be aware of.
We'll take that away to do that.
Zainul, over to you. Thanks, Doug.
Thank you, Darren. Hi, Jeff.
Hi, ZaINU.
I think we definitely have seen quite a bit of competitive activity in our ILEC territory in the West. At the end of the day, we're really pleased with our loading performance. As Darren highlighted, we've seen some of our best internet loading since 2002. It's really important to highlight that is driven on the back of achieving 1% churn, which highlights our customers' first priority. The beauty of that strong churn performance is that it puts less pressure on the growth loading overall. In addition to that, we've also seen an MRC improvement quarter-over-quarter since last year by 25% on those new internet loads. We continue to see customers demonstrate that they are selecting us based on the value that they see in PureFibre as they continue to work from home, learn from home, and socialize from home.
We're also seeing up-tiering, speeds, and bundling improvements. I think fundamentally, even though we are faced with competitors that are commoditizing our core services, we're continuing to diversify our bundle and add more value. You've seen that quarter-over-quarter. We are investing heavily and our network superiority, our services, and our amazing customer experience is just unmatched in the environment. When you look at the difference between a fully bundled customer and a standalone high-speed customer, as an example, you can see up to a 5x improvement in lifetime value on that customer. Then if you look at how we're continuing to diversify our bundle in terms of quarter-over-quarter, adding new quality attributes and capabilities. Last quarter, we talked about our inclusion and very unique partnership with Amazon Prime and our Optik bundle.
Just recently, we launched a multidimensional partnership with Calm as well as NortonLifeLock, providing peace of mind capabilities from mental health to online safety and cyber insurance. We continue to expand capabilities in Babylon by TELUS Health from a virtual health perspective for our consumers. We are very confident in the diversification of our product portfolio and our ability to drive increased household ARPU, stronger churn performance, better cost efficiency on a per product basis, and higher value for our customers in the face of that competition.
I think Jeff Fan hit the nail on the head. I would just ask you, just go back and look at the hard facts as it relates to sustainable performance from TELUS related to our operational and financial track record on the wireline front. It's unsurpassed on a global basis in terms of what we have delivered from a loading point of view and from a financials point of view within our wireline operations. I would just ask you to do the tail to tape in terms of our structural advantages. We have scale on fibre, and we will have greater scale on 5G. Those are not easy things for a competitor's balance sheet to replicate, and I think it's important that that's understood. We have vastly greater scale on our channel front and diversity of channels to market in that regard.
It's not just scale, but it's also diversity. We are phenomenally progressed on the digital front, and still growing on that side of things, whether it's marketing, whether it's the selling, whether it's fulfilling, whether it's carrying, whether it's billing and collecting. We are a digital continuum at TELUS, buttressed by the TI operation. You know where our customer service has gone in terms of best in class, and when you combine that with best in class network, those are pretty meaningful structural advantages. Then on the product front, I guess you would say we're subjective, but we do believe our products are superior. If we sweep that to one side and switch from the subjective to the objective, we just have services that are unique to TELUS, whether it's our security offering, whether it's our health offering, or whether it's our home automation offering.
I think there's some intangibles that will play well, whether it's our brand strength, whether it's our social capitalism thesis that brings us closer to communities and customers along the way, whether it's our culture and our talent pool, or just overall our financial strength. If you look at the tale of the tape, only 60% of our business overlaps with Shaw. We've got a national footprint and a diversity of revenue and profit sources, again, that are atypical to our organization. When I make the comment that the sources of cash are going to chronically exceed the uses prospectively, I don't make that comment lightly. When we have been in that type of period historically at TELUS, I think investors have done very well.
Great. Thanks for the answers.
That's the competitive advantage.
Thank you.
Thanks, Jeff. Mike, over to the next question, please.
Of course. Next question comes from Vince Valentini from TD Securities. Please go ahead.
Yeah, thanks very much. Thank you for this extra CapEx disclosure. As you can appreciate, that's going to lead us to ask different types of questions now that you're giving us this info. Why is the projected % for broadband network build so similar in 2021 or even a touch higher than 2020? Aren't you going to be past 80% on fiber to the home by the end of this year and reaching the finish line? If you can flush that out for us a bit, it'd be helpful. Maybe it's all wireless broadband instead of fixed, and I'm just reading it wrong. Second little thing. I'm not sure I know what AFS Technologies is, and I don't recall talking about it when it was acquired, but it looks like you spent CAD 315 million on it.
If you could spend a second just letting us know what that company is that you bought. One last clarification is the 68,000 Internet for Good customers, which I commend you on for doing for society. Can you clarify, is that in your internet sub count, and does it form part of the 50,000 adds this quarter? Thank you.
Okay. François, I'll hand over to you in a second. Vince, as it relates to broadband, that's wireline and wireless in combination. You've got the mathematical outcome of fiber build continuity complemented by the scaling of our 5G deployment, particularly as we start to complement our existing frequencies with the operationalizing of the 3.5 gig spectrum that we would hope to pick up in the spectrum auction in 2021. That's the math on that particular point. François, why don't I hand it over to you, and then we can come back on the Internet for Good front, or not come back to it. I could just deal it up right now. Yes, it is included. That is a total number. It is an immaterial component to our 50,000 net adds. That's the cumulative progression of what we have done on that front. Yes, we include it.
It is immaterial as it relates to the number that we posted in the quarter.
Okay. Thank you, Darren. As it pertains to AFS, you have to take it in the context of our push into the AgTech vertical. As we all know, access to quality and safe food will be a growing challenge across the globe as the worldwide population continues to grow. We saw an opportunity to tackle this challenge head on. We are indeed pioneering the first end-to-end digital solution across the entire agriculture food value chain. We see an opportunity to increase yield, reduce waste and trace the quality of our food and the safety of our food from its origin all the way to our dinner table, so to speak. With AFS, we've actually acquired the leading global food supply chain and promotion management technology software company.
AFS gives us a foothold in the global value chain closest to the consumer and complementing the acquisitions we've already made in the agriculture sector. We've indeed acquired a collection of trusted, experienced agriculture assets across North America, U.K., Europe, and Australia. Our approach in ag is very familiar to us. If you look at what we've done over the years in health, combining assets to create significant value for our customers and TELUS along the way, leveraging our digital playbook we used in health and applying it now to agriculture, we see important parallels. Precision health with precision agronomy, our data processing and analytics capabilities. We also see linkages between what we do in health and what we're doing now in agriculture. Because when you think about creating better food outcomes, that eventually leads to better health outcomes.
It's also an excellent manifestation, if you think about it, of our social capitalism mission in action. We're going to be holding an event on November 12th, 2020 to announce the launch of our TELUS Agriculture push. During that event, we're going to be able to share a lot more details. We'll welcome you to that event.
Thank you very much.
Darren?
That's great. Vince, by the way, if you want to look at how our internet business is performing in terms of economics, have a look at the lifetime revenue given where Zainul and the team have driven churn below 1%. Look at what's happening on the monthly recurring revenues on the internet base in terms of the growth and the financials that we're deriving from our new net additions in terms of being accretive overall. I think that would be an important complement to the answer that I already provided to you, and I alluded to it this morning in my earlier remarks.
Thanks, Vince. Mike, we have time for one more question, please.
Of course. Last question comes from David Barden from Bank of America. Please go ahead.
Hi. Thanks for taking the question. It's Matthew sitting in for David. I just wanted to ask about the wireline EBITDA growth. I know the disclosure on the COVID impact is helpful. It sounds like TI was firing on all cylinders. I was just wondering if you could talk about some of the initiatives that are under your control that may be rolling off in the coming quarter or into next year that can see the EBITDA contribution increase. I'm thinking obviously of ADT for one, but I'd be interested to hear how maybe some investments in Health are also maybe keeping that EBITDA growth number somewhat lower this quarter and maybe into next. Any color would be helpful. Thanks.
Zainul and Doug, why don't you take that one? Zainul, why don't you kick it off, and Doug, you can clean it up, and I'll add anything that gets left out.
Sounds good. Thanks, Darren. As you've highlighted, we certainly have very strong foundational elements in our EBITDA performance in the future related to the MRCs that we're seeing and the added contribution of household ARPU to the bundles that we have in our base. What you can see from our disclosure at this period is that we have several one-time impacts due primarily to investments in post-acquisition integration efforts. As you can see, we've done a number of acquisitions on the wireline side across the verticals that we've invested in. In addition to that, we've been conservative in bad debt and provisions and have also invested heavily in supporting Canadians and customers through the challenging times of COVID.
Those one-time impacts have also materialized this quarter in terms of some of our expansion of the programs that Darren highlighted, waiving and delaying planned pricing activity, and of course, standing up numerous community and employee support initiatives. At the end of the day, we absolutely have been investing in profitable growth, and we see that based on our product intensity thesis and its success continue to materialize in the market, we're very confident in the prospective financial growth. Doug, I'll hand it to you for any top off.
Yeah, I think the other two items, or three items, I guess, which are in the wireline margin number would be the business pressure. We still are seeing when you bring in the pressure under small and medium business, that is under a little bit more of the, call it delayed COVID reaction, where as government funding starts coming to an end, they're under more pressure to bring scale back to their business. When you think of Ontario and Quebec that are starting to hit a phase II, that puts more obviously price sensitivity and that group of customer base is going to need more help that we've extended throughout the initial COVID period.
The healthcare side that François was talking to, the clinics and wellbeing services are still not firing at 100%. That is also a cost structure in which you're not getting the full revenue line on, which is holding the margins down a little bit as well. Then a couple of the acquisitions that we've done, and AgTech's a good example to that, where there's a little bit of a J-curve startup, but leading to significant long-term value, which would be the third of the incremental items to what Zainul was referring to within wireline margins.
I think the other thing in terms of looking forward, when you're delivering 50,000 internet adds, it's a pretty good result relative to the last 18 years. At the increment, we're seeing a monthly recurring revenue improvement of circa 20%-25% on those new customer additions. That bodes well for us prospectively, and highlights the attributes of our underpinning TELUS PureFibre program, where we're seeing much greater product intensity on the bundling front. We're seeing much, much better cost efficiency, which is going to be a huge part of the story for us prospectively on the wireline front, so that we can deliver very attractive financials alongside very attractive loading, as we did with 50,000 internet loads, 18,000 security loads, and 19,000 TV loads in combination so that they're financially accretive.
The other thing that is important to point out is in addition to the cost efficiency comment that I made related to fiber and how it supports home automation, how it supports fewer truck rolls, a better repair relationship, if you will, with a client, and then better cost efficiencies through economies of scope by having more products on a per household basis. The other element that's going to be key for us from a cost efficiency point of view prospectively is the terrific progression that we're making on digital. I think that's a missing component from the wireline conversation. Leveraging our digital strengths in that regard, again, should give us the mutually inclusive outcomes prospectively, a very strong operational performance flowing through to attractive financials.
Great. Thanks a lot.
Okay. Thank you everyone for taking the time to join us today. Please feel free to reach out to the IR team with any follow-up questions you may have, and take care, everyone.
Ladies and gentlemen, this concludes the TELUS 2020 Q3 earnings conference call. Thank you for your participation, and have a nice day.