Quebecor Inc.

Ladies and gentlemen, good morning, and welcome today’s Quebecor conference call. My name is Hugues Simard, I am the CFO.

And joining me to discuss our financial and operating results for the fourth quarter and full year of 2021 is Pierre Karl Péladeau, our President and CEO. Anyone unable to attend the conference call will be able to listen to a recording by telephone or webcast.

Access details, as usual, are available on our website at www.quebecor.com and the recording will be available until May 24th. I also want to inform you as we always do the certain statements made on the call today may be considered forward-looking and we would refer you to the risk factors outlined in today’s press release and reports filed by the corporation with regulatory authority.

Let me now turn it to Pierre Karl.

Merci, Hugues, and good morning, everyone. First off, we are pleased to have completed last December the acquisition of 294 blocks of 5G 3500 megahertz spectrum with half of our investment in Ontario, Manitoba, Alberta and British Columbia.

As we have said before, this spectrum constitutes the base of a potential expansion of our telecom services across Canada should, of course, the still pending MVNO regulatory framework for wholesale mobile wireless services establish favorable conditions, ensuring the economic viabilities of MVNOs. We are also still eagerly awaiting the Competition Bureau ruling on the Rogers-Shaw transaction, an another opportunity to create real lasting competitive dynamic bringing the Canadians the benefits of technological innovation, superior client experience and lower prices, as we have done here in Quebecor for many more than 10 years.

Speaking of the competitive telecom environment in Québec, our financial results for the last quarter and the year 2021 reflect these comparatively more intense promotional dynamics, both in wireless and broadband, despite which we managed to generate increases of 5.5% in revenues, 1.1% in the EBITDA and 5.3% in cash flows from operations for the year, with an increase of $25 million or 7.4% in cash flows in the fourth quarter alone. In light of these results and following our plan to gradually increase dividends to represent 30% to 50% of our net free cash flows, I am happy to report that Quebecor’s Board of Directors declared yesterday a quarterly dividend of $0.30 per share on both Class A and Class B shares, up from $0.275, a 9% increase.

Turning to operational matters and starting with telecom, Videotron actively pursued its 5G deployment in the Greater Montreal and Québec City areas, providing increased speed, expanded connectivity, minimal latency and opening of a world of opportunities for our customers. Moreover, the first phase of operation high speed, our project to deliver high-speed Internet to 37,000 households in several municipalities across the province is proceeding well.

In December, we connected our first home in the Northwest suburbs of Montreal and the residents’ response has been very enthusiastic so far, pointing to a successful program, for which I wish to salute not only our team but also our partners, Québec Government and Canada Government for this important initiative. Our Helix activations reached 157,000 for the first -- for the fourth quarter, representing our best performance of the year and the sixth consecutive quarter with more than 100,000 customers’ additions to our Helix services.

Subscribers to our superior Helix service totaled over 1.2 million at December 31, 2021. In a market characterized by ongoing cord-shaving and cutting, Videotron stands out with its ability to limit the impact on its video customer base due to its state-of-the-art platform and second-to-none client experience.

Internet subscriber growth was 800,000 during -- the 8,000, sorry, during the quarter and 44,000 year-over-year, performance that compares favorably to that of our large Canadian peers and competitors. Internet ARPU increased $1.33 or 2.5% over the last year.

During the quarter we launched many great features in the Helix ecosystem, subscribers can now access Amazon Prime video directly on the Helix TV, control high voltage thermostat by Sinope, a Québec-owned company and control smart door locks by directly with the Helix Fi app. On the wireless front, we posted 31,000 adds during the quarter, despite the ongoing aggressive competition from the loading and renewal perspective.

We are able -- we were able to improve our churn levels slightly for the quarter and capture once again the largest combined shares of gross adds in Québec with more than 32% for our two brands Videotron and Fizz according to due -- the new adds quarterly tracking by Léger. This number one position, which has been solidly established for several quarters, clearly demonstrated the strength and complementary of our brand, and certainly, confirms Videotron as the leader in wireless services in Québec.

In addition, I am proud to highlight that Fizz tops Léger 2021 WOW Digital Index offering the best online experience and telecommunication for the third consecutive year. Consolidated wireless ARPU for the quarter grew to $0.28 or 0.7% over the same quarter last year.

This increase is explained in large part by roaming and data usage revenues comparing favorably to the same quarter last year. With over 460,000 subscribers across Québec, Club illico continue to invest in the production of local differentiated content from various horizons with the introduction of a brand new content offered.

In the fourth quarter, Club illico in collaboration with Quebecor content launched three new original films and additions to new seasons of popular series such as La Five [ph] [inaudible]. Vrai, our new video subscription platform dedicated to exclusive unscripted lifestyle, documentary and entertainment content, introduced more than 35 new original productions, in addition to acquiring some of the best international brands for non-scripted content in French, growing to more than 42,000 subscribers in less than five months.

Vrai is a huge success and a perfect complement to Club illico, which is dedicated to series, movies and news program. Vrai is also available on Quebecor’s integrated digital news and entertainment content platform as an added value to the Videotron customers who do not subscribe to it.

In our media segment, advertising revenues continue to increase, particularly in broadcasting up 25% in the quarter and 30% over the year. We continue to invest in a wealth of new shows, original production and exclusive content in the fourth quarter to maintain our leadership position in the face of increased competition from offering on multiple platforms.

Thanks to our high caliber original production and major television events, TVA consolidated market share reached 38.8%, reflecting in part of it 0.5% increase for the TVA channel in a very competitive again -- competitive environment from private competitors and our state broadcasters Radio-Canada. Now our production and audiovisual services company also performed very well, growing its revenues by 47% to $86 million and its EBITDA to $23 million for the year 2021, its best performance ever.

Finally on the regulatory front, I would like to voice my concern once again about the unsustainability high burden place on Canadian broadcasting companies, as video streaming subscriptions have now surpassed television distribution services, Canadian companies are operating in an increasingly precarious environment, a situation would lead to the weakening of the television industry and of local production. News, a vital pillar of a strong and healthy democracy will suffer unless the CRTC lighten that burden.

It is high time that we too enjoy the same regulatory and commercial freedom as the foreign web giants which have been eating our lunch free of charge. I will now let Hugues review our financial results.

Merci, Pierre Karl. For the fourth quarter, Quebecor’s revenues were up 3% to $1.2 billion.

Revenues from our telecom segment grew 1% to $953 million, mainly explained by the wireless segment combining customer growth and higher revenues from mobile devices. Revenues from our media segment grew 14% to $212 million.

Quebecor’s EBITDA was down 5% to $499 million for the quarter. Our telecom segment reported an EBITDA of $467 million a 3% decrease compared to the same quarter last year.

As a result of some provision reversal, which impacted us favorably last year, and also lower margin in wireline and also on mobile devices sales, which also accounted on the topline. Our media segment reported an EBITDA of $29 million, which was $17 million unfavorably to last year, mostly due to higher broadcast content costs in part because of the late start of the NHL 2020 and 2021 seasons.

Quebecor reported a net income that attributable to shareholders of $161 million in the quarter or 67 shares -- $0.67 per share, compared to a net income of $160 million or $0.64 per share reported in the same quarter last year. Adjusted income from continuing operations, excluding as usual unusual items and gains or losses on valuation of financial instruments came in at $158 million or $0.66 per share, compared to an adjusted income of $165 million or $66 per share in the same quarter last year.

For the full year, Quebecor’s revenues were up 5% to $4.6 billion and EBITDA was up 1% to almost $billion. Revenues from our telecom segment grew 3% to $3.7 billion and EBITDA increased 1% to $1.9 billion for the same period with an overall EBITDA margin of 50.2%.

Telecom CapEx spending, excluding spectrum was down $56 million for the quarter as compared to the previous year, mainly due to the timing of investments, where we refocus on our strategic priorities, tighten our processes and operate more efficiently. For the full year, telecom CapEx spending decreased $59 million as compared to last year, while increasing investments in our LTE advanced and 5G rollout.

Our cash flow from operations for the year 2021 increased by $70 million or 5% to $1.4 billion, once again demonstrating the resilience and strength of our business model, as well as continued operational and financial discipline. Cash flow from operations for a telecom segment also grew $70 million or 6% to $1.3 billion.

As of the end of the quarter, our net to -- net debt to EBITDA ratio was 3.19 times, up from 2.68 times reported at the end of last year, mainly explained by the acquisition of the 3500 megahertz spectrum. Available liquidity of $1.6 billion as of the end of the year and our growing cash flows will continue to be more than sufficient to fulfill our commitments and continue to fuel our projects for growth.

In 2021, we purchased and canceled 8.9 million Class B shares for a total investment of $282 million. Since we initiated our NCIB 11 years ago, approximately 49.6 million Class B shares have been purchased and canceled.

We thank you for your attention and we will now open the line for your questions.

And thanks for...

Bonjour and thanks for taking my question. I have seen this morning the dividend being increased 9%.

There were significant buybacks in the quarter as well. Nothing too dissimilar to trends we have been seeing before, but still I have to ask if we should read anything in terms of a signal regarding your willingness to expand outside of Québec, has this changed at all since our last call in November?

Yes. Bonjour, Jerome.

Well, yeah, no, I guess that, we were quite clear regarding where we were considering a more normal situation in terms of payout. This has been mentioned few quarters ago.

We do not expect changing our policy. So basically this is why we have been -- the Board of Directors decided that we should continue to increase.

Probably, the increase is a little bit lower than some of you would expect that. But it’s in line with the policy that we established previously.

For the out of Québec or rest of this event, you will recall it. Expansion, again, I would like to refer you to my introduction and my speech basically saying that, we are expecting to know at this stage, unfortunately, we are clearly in the bar.

But we expect, the CRTC to come with the proper framework to make sure that it will make sense with, I guess, the overall policy to improve competition in Canada. There is no doubt that the proof has been made in Québec for the last few years, while it’s more than a few years now, it’s been a while.

So should -- we should think, to me that, it’s loud and clear that the fourth competitor would be the best vehicle to make sure that Canadians will enjoy a more competitive landscape.

Okay. Thanks.

That’s pretty clear. And then a second one, if I may, I was recently looking at public pricing on the websites and it appears that the GAAP between the pricing of Videotron and that of others has somewhat closed recently.

I am wondering if that means you are starting to get more comfortable with the current market share and if we should expect the company to enter a new phase in terms of its wireless strategy.

Well, you know what as one would guess that, we should say it’s a very volatile environment. I got in front of me excerpt from two newspapers, today’s newspapers.

One is from the Toronto Star and the second one is from the Montreal Gazette. So, in the Toronto Star, Toronto Star page eight, seven, we have an ad from Bell, which is purified the faster internet technology, starting from $84.95 per month.

This morning in the Toronto Star. Look at the Montreal Gazette and I got an ad from Bell, Québec’s fastest ranked internet starting from $59.95.

So you can see the difference is out there now.

$25.

$25 and just besides the Bell ad, we had a Virgin ad, which shows unlimited internet for a sweet price of $39 per month. So it shows how competitive -- the ecosystem is competitive in Québec.

And I also noted, the sub-brands in the internet have been certainly adding in the fact overall, and probably, also on the internet margins that we are able to deliver. So, well, this competitive environment will remain?

This obviously we don’t know. But we will certainly continue to offer what we consider being the best customer service with the best product.

This has been the successful recipe for Videotron over the last -- over 15 years, and I guess, that right now there’s no real reason to change our positioning and marketing strategy.

Fair enough Pierre Karl.

Yeah. A couple for me please.

Thanks. Hugues, could you talk a little bit about maybe just sort of walk us through the EBITDA performance in the fourth quarter?

It was certainly below consensus and you mentioned a couple of items, but could you maybe walk us through what led to that and what the outlook going forward is particularly on the telecom line? And I was wondering, I know you don’t give guidance, but could you provide some sort of color on what your expectations would be for CapEx, cash taxes and cash interest in 2022?

And then, finally for Pierre Karl, the discussion of relative pricing for wireline in a couple of markets, there’s a number of products that are priced differently across the country. I am just still struggling with what is the game plan for expansion outside of Québec on the wireless side.

And if we have debated this since the deal was announced, but I am just wondering, how is your thinking evolving there, because the market is clearly struggling with what the end game is for Quebecor? Thanks.

Okay. Tim, I will start with your first question on EBITDA.

So the story of the quarter basically on EBITDA is a couple of things. Starting in margin, you will I am sure have seen the wireline margin both broadband and cable.

Broadband, it’s more of a matter of the margin, if you look at it in detail, not really growing as much as we have grown accustomed on the broadband. And most of the -- and the main reason for that and it’s hitting us increasingly and it has been hitting us increasingly over the past few quarters, and I think, it’s coming out even more clearly in Q4.

And the first reason for that is the increasing proportion of the growth in broadband being attributable to Fizz. Fizz, we talk at length at Fizz and our success in wireless.

But Fizz is a huge success as well in broadband. Pierre Karl just mentioned to you all these prices.

I mean, the market seems to be very, very different, obviously, in English Canada, than it is in Québec. But what we are living in Québec is very clear.

I mean, people are pricing down and where we are seeing growth, where we are really successful is with Fizz and I suspect that this is something that’s going to continue. We don’t see any -- we certainly don’t see any reason for this to suddenly turn around and we see -- so our growth being increasingly due to Fizz as opposed -- at a lower price point, obviously, as opposed to Videotron, and of course, the broadband ARPU for the quarter is mostly flat compared to growth that we have seen for a few quarters ago and that was increasingly disappearing.

Don’t forget as well that we are comparing ourselves with a quarter in 2020 that was very, how would I call it stable, much fewer disconnects. If you look at it, I mean, we are comparing ourselves with this year in terms of growth in broadband.

We are comparing 44,000, right? For the year we are comparing ourselves with last year with 69,000, but in 2019 it was 23,000.

So let’s not forget that 2020 both the year and the fourth quarter were also a little bit unusual comparables, right? Turning to cable, I mean, cable is, I mean, there’s nothing new in cable TV, cord cutting and cord shaving is clearly continuing.

But I think you have to look at our performance. If you look at other cable growth in Canada whether it’s cutting cord or Shaw’s performance and if you look at the U.S.

as well cable growth, you will see that that we are managing the situation comparatively well. But I think all of that to say that, the first story I think or the first explanation in profitability for us in the quarter has to do with margin -- wireline margin.

Now of course in terms of OpEx, there is a -- we are -- we have put in place many cost reduction initiatives and they are ongoing. But I think we have to realize that we are in that, what I would call, sort of that in-between phase where we have added, to be honest for the past couple of years, we have added platforms, we have added networks and we are transitioning, we are migrating a lot of our customers, a lot of our subscribers from one platform, whether it’s Helix, whether it’s -- I mean, there are a number of initiatives on the go and we are in that sort of in-between, Tim, that -- in-between phase where we have had a lot of cost structure and we haven’t, yeah, we have taken some out, of course, but not as much as we would have liked, and perhaps it’s not going as quickly as we would have liked, we will own up to that.

But the fact is that we are not done yet and we are still in the midst of that transition and that migration that is in terms of maintenance cost, in terms of support cost, in terms of licenses, in terms of people is really costing us quite a bit. So this is what I would really point out in terms of EBITDA story for the quarter.

In terms of CapEx, I think, you asked me about CapEx. CapEx I think it’s important, it’s continuing to come down, continuing the same trend as the previous quarters.

A couple of things, I mean, of course, that on equipment, that transition that I talked is certainly the Helix migration, you will remember that we moved from a more CapEx intensive to a more OpEx intensive model. So, certainly some of that CapEx decrease has naturally just linked to equipment.

Another big one is self-install, where we continue to increase our performance in self-install and have been able to really lower our installation CapEx significantly are increasing and we are up to 63% of self-install. So that’s -- I mean that’s -- we are very, very proud of that performance and it’s finally leading to the results that we have been expecting.

I mean there’s still a ways to go, of course, and on the digitalization of our client journey and all of that I mean we are still, as I said quite a few initiatives still on the go. But the self-install is certainly a great success that’s certainly helping on the CapEx side.

More generally though I have to be -- we have talked about this in the past and I will repeat it, more disciplined in terms of number of projects, the scope of CapEx projects that’s -- and the prioritization. As I am sure, companies like Videotron and other telecoms, we have a lot of growth related, a lot of strategic projects that gets underway, that get analyzed that focus all the time, have a lot of people and cost quite a bit.

And I think we are gradually being a lot more disciplined about this. As I said, in terms of number of projects that are started, that have the scope of these projects and a more efficient prioritization of these projects, leading to us being able to focus more on the growth and the projects that are linked to growth or impact on margin that we hope to continue to over the year in 2020 to deliver.

As I said, certainly, I think, our CapEx -- our lower CapEx should not be in any way interpreted in the way that we are not focusing on these growth and margin related projects. I mean, LTE advanced and 5G, as I said in my speech is, is certainly one of the big ones that we are maintaining, and in many ways, increasing.

So I think that covers. I think you -- in terms of guidance, well, in terms of CapEx, I think, our guidance at this point would be more of a stability on the CapEx front.

For all the reasons I have just mentioned, Tim, whether it’s the equipment or whether it’s our performance, whether it’s our discipline, we believe we are in a situation to be -- we are managing the situation better and I think we can look at stable CapEx for 2022. I won’t give you more -- any more guidance on EBITDA, of course, other than, I think, you have asked about there’s nothing -- I don’t think there’s any change that you should take in your model in terms of cash taxes and other cash flow related items.

I think, again, I point to stability on those fronts. Does that answer your question?

Thank you.

Yeah. I will continue on top of -- for you -- the last piece, yeah, of your question, Tim.

Well, first of all, I’d like to also to reemphasize what Hugues said on the CapEx. I think it’s worth to mention this discipline certainly not to the detriment of our 5G deployment, our LTE advanced also.

So we will continue to make sure that our network, as you know our -- and this was part of our strategy and industrial/marketing strategy for the last decades and more that our product was one of the best, if not the best, in the marketplace. We intend to do the same in the wireless business.

You know that we were looking to -- because I think it’s the best thing to do regarding the Canadian landscape, so we are expecting to build our network together with Rogers for whatever reason, which as you know, we claim right now, former leadership, I would say, decided that it’s not the way to go. We expect that the new leadership will review this position, because again we still think that it’s the best way to go, but no matter what is the case, we will continue to make sure that our network will meet customer’s expectation and technology requirement to serve them.

On the -- out of Québec or rest of Canada’s strategy, Tim. I should emphasize the fact that, we got everything.

First of all, this is why we participate -- we participated in the auction few years, months ago. So we have the base of our future development, because we bought spectrum in the markets where we expect where we think there will be interesting growth to take place.

It is necessary to mention that we have all the other assets as an operating company. So all the expertise and all the billing systems, all what is needed to be a telecom wireless company is under a long time experience and success of a telecom operator.

The missing piece is the regulatory framework. We look forward to get the price.

Obviously, everything will depend on the price that we will need to pay for this transition from MVNO situation to a full facility operator. As you know and this is different than the TPIA framework, we need to build our network.

So I am not saying that we have a free lunch for the first year, but we have certainly a favorable environment if the price was to be raised, and again, it will depend of how strong is the desire of the state regulatory bodies to make sure that Canadian will enjoy competition. But we only have a button to push if we look to move forward in the wireless business for certain other regions in Canada and we look forward for the CRTC to try to hurry up this exercise, which is, as you can imagine, being slowed down by the incumbent that do not want to see competition.

Thank you.

Hi. Yeah.

A couple of questions, if I may, so just looking at the telecom business, you talked about margins being down on wireline, I guess, due to the success of Fizz internet. But I was just trying to as always segregate the wireless and wireline.

So it would appear to me that wireless is probably flat on a year-over-year -- the wireless EBITDA was slightly flattish on a year-over-year basis in the quarter, is that a good way to look at it?

The wireless EBITDA, David, you are referring to. No.

The wireless…

Yeah.

… EBITDA is grow -- we don’t separate it as you know, but that it’s definitely growing.

It’s definitely growing. Okay.

Would…

Yeah.

So the growth have been double-digit year-over-year?

We are -- yeah. We are very close to double-digit.

Yeah, we are in that range.

Okay. Okay.

On wireless EBITDA. Yeah, which…

Okay.

…which leads obviously the mass being the mass. So what I said earlier that, pressure on wireline for all the reasons I talked about.

But I think our performance is honestly, David, is more challenging in wireline and it has been for some months now, whereas, I think wireless -- our growth is pretty good and ARPU is -- as you know, has grown a little bit this quarter, despite what the fact that same as my argument that when for broadband also goes for wireless, of course. That most of our growth, a good chunk of our growth in wireless comes from Fizz as opposed to Videotron at lower price point.

So there’s a natural erosion as we have lived through in for many quarters on the ARPU and now this quarter we are seeing a little bit of an increase in ARPU. I mean, ARPU is a bit of a different beast, as you know, within our case, with less of our growth coming from equipment-related packages, so maybe I will say differently, more of our growth coming from BYOD, obviously there’s that impact on ARPU.

But as -- we don’t really think in our business that ARPU is the right way to look at it, because we love BYOD, we -- our margins are really, really good and it keeps us out of that subsidy game that as you know is it can be quite expensive. Although, there still are quite a few subsidies in this quarter as you saw, so we are not completely out of that game, but BYOD has certainly helped us.

Okay. Because when you look at the supplemental, it just discloses mobile ARPU, so...

Yeah. Yeah.

We are going to -- that’s -- we were talking about this. I think we are going to do that.

Some of our competitors and go more towards the -- go back I guess to the ARPU from the discussions that we used to have in the past, which I personally feel is a bit more telling in our business.

So I know you just don’t like to provide guidance, but with the fourth quarter wireline results sort of the new trend that we should expect into 2022 and beyond, just like with just -- with the margins being down a little bit.

Yeah. Well, it’s an ongoing, David, I am not going to blow smoke up whatever part of you would like.

But I mean the market is not going to change overnight. It’s a tough market.

Pierre Karl talked about it. This is a very competitive market.

It’s a price, a lot of pressure on price in wireline. Well, in wireless, yes, that had been ongoing for some time.

And that seems to be quite different from the markets in the rest of Canada. But we don’t think we are going to be the last country in the world when you look at what’s happened in the U.S.

and in Europe and all the other countries. So it’s not unexpected.

I think it’s going to continue to be quite competitive. Our main competitor in broadband is continuing to be very aggressive.

So, yeah, I would more point out towards a continuing environment. That being said, I pointed out to a lot of the cost initiatives that we are still working on, and as I owned up, maybe we haven’t delivered as quickly as we would have liked.

But we will get out of that that sort of in-between stage that I talked about earlier with Tim. And I think there’s still is quite a bit of runway on the margin and the EBITDA growth front.

Okay. Maybe a question for Pierre Karl, I mean, can you give us an update, I don’t know if you can, but can you give us an update on your discussions with the Competition Bureau regarding the Rogers-Shaw transaction and maybe I don’t know if you can, but if you can share with us sort of the outcome that they would like to see?

Well, David, not really I would say. We are obviously answering questions from the Competition Bureau, I guess, they are looking to have as much of the information as possible and they certainly consider that we would be a good stakeholder to quote-unquote educate them on the market wherewithal.

So, but certainly you know what, tough to find out, we are not going to try to read in tea leaves, I don’t know if I can say that. But I guess that the landscape has been quite clear that for competitor is certainly something that shows competition brings some significant advantages to customers is this philosophy will remain also in terms of competition.

There’s always few different perspective, for interpretation of the law, but we will see, and I guess, that the conditions are certainly very strong for this part of the transaction significantly reviewed by the Bureau.

Okay. All right.

Thank you.

Thanks, David.

Yeah.

Yeah. Thanks very much.

Good morning. A couple of follow ups here, in terms of fiber-to-the-home expansion in your cable footprint, obviously Bell’s gotten few chunks of urban markets over the years.

Has there been any incremental impact of that expansion from a competitive standpoint? And then, Hugues, just with respect to provision reversals, we are kind of comping off some choppiness here as we kind of look out quarter-by-quarter.

Should there be additional kind of provision reversals going forward, just provide an update there would be helpful?

Sure. And I will answer your second question first, Drew.

You shouldn’t get bog down in provision reversal. Year ends are always whether it’s bonuses or readjustments after as we are coming out of the pandemic for bad debt adjustments and things like that.

But it’s not -- it really shouldn’t -- I mean that’s not the story and I am not going to hide behind any of this. And there shouldn’t be -- I mean, there’s nothing ahead of us, but that’s holding ahead of our -- on top of our head or anything like that.

So I wouldn’t put much focus on that. In terms of FTTH, yeah, Bell, as you know, has continued very aggressively its FTTH deployment.

But we -- as we said in the past many times, we believe we have the flexibility due to our technology to be able to go to the node as opposed to the home in many cases and deliver very -- not only very similar, but comparable performance as opposed to having to go all the way to the home because of coax. That being said, we do -- in a lot of our extensions we do go all the way to the home when it economically makes sense for us and we have done so in many cases.

So I mean there’s some obviously higher costs related to going FTTH and Bell has certainly played very well that that game over the past few years. But we believe we have been a little bit more, how would I say, not surgical, but a little bit, having the opportunity of being a little more intelligent and economically prudent in our deployment and that’s been positive for us, while still continuing to deliver the same performance in these new -- in these neighborhoods and in these nodes .

So our understanding, Drew, is that, the FTTH footprint of Bell, basically cover all our footprint. So there is quote-unquote threat that we should expect on the deployment of new technology we don’t see it.

And as Hugues, FTTH deployment was very expensive for Bell to do so. We do not know what is the impact of Bell in Québec.

As you know there is no breakdown between Ontario and Québec. So when we compare we know that they were losing significant amount of customers regarding their satellite service.

But we do not really know, there is small increase of fiber subscribers are located. From our standpoint that -- and also what Hugues said and this is the North American situation, cable subscription of this phenomenon, which is whatever is shaving or cutting or network, you know that...

Yeah. That our network, I mean…

...significant, we all know with our aspect, some young boy or young lady of 18 to 20. Well, certainly, while there’s a high probability they are getting out of the home will not subscribe to cable.

Obviously, they will subscribe to wireless and we are there to offer all sorts of good products, whether it’s Videotron brand, obviously is, a digital or a conventional through call centers, a service and products. We are all doing this.

But something again that is unknown to us, if the performance has done in Québec, I guess that, if they don’t want, if they are not breaking down the numbers is that basically, probably, because we do not have good numbers in Québec.

Yeah. Okay.

And -- okay. Thank you, Pierre Karl.

Just two very quick follow-ups if I can. On wireless ARPU as we kind of look at Q4, but probably more importantly 2022.

Just remind us where we are in terms of kind of where roaming levels set kind of if there is any impact in the quarter or Q1 of this year in terms of renewed restrictions in Québec? And then my second follow up just in terms of the government programs and the footprint expansion, when do you expect to begin kind of loading, I think you alluded to a little bit of loading in Q4, but should just be a steady kind of ramp of footprint penetration as you go through 2022?

Drew, so on the ARPU. Yeah, usage -- I think your question if I understood it correctly was more specifically related to usage revenues right?

That’s right.

Yeah. So what went on the way down is certainly the same on the way up by.

You remember that we had made the comment that compared to some of our competitors and larger peers and competitors. We did not decrease as materially as they did in terms of usage revenues.

So now we are obviously not benefiting from that same swing back up. So it really wasn’t material for us, and so I can’t really argue that it is going to continue to be.

So I don’t think that’s going to play much or have much impact on the on the ARPU going forward. I think it’s -- in our case, it is continuing to grow ARPU on all of our platforms.

And as I said, I mean, Fizz we had a very, I won’t give you the number, but we are continuing and it’s continue to -- and the increase in ARPU is actually increasing, so that’s good news. And so we will have a little bit less of that impact that we keep talking about on the overall ARPU going forward.

Those would be my comments on that. In terms of the government programs, the 37,000 doors or addresses that we will deliver, we -- yeah, we have delivered some, but very few, to be honest and these will come in on stream more gradually over the next six months, nine months.

I mean, by the end of September is what we expect that we will have delivered all 37,000.

Okay. And one -- I promise, my last one.

Just back to the ARPU, the roaming impacts for you, just remind us kind of where we are on the roaming side. I know it’s not a big revenue stream, but?

I am sorry. I didn’t hear your question.

I am sorry.

Yeah. I just it was like international roaming, any roaming revenue that you get on wireless?

International roaming, we...

Oh! I am sorry.

Okay. For some reason, I couldn’t hear you, Drew.

I mean, there’s -- but, yeah, I mean, some international roaming is back. But as I said, I mean, it’s not -- it wasn’t -- it’s not a huge percentage of our ARPU and much lower than our competitors.

And so some of it is back, yeah, and certainly, in Q4 that helped us a bit and there’s some of it in the $0.28 there. But again it’s not the main factor.

Super. Thank you.

As a joke, I would say, Drew, that there was a lot of Quebecors went in Florida during Christmas time and they all caught COVID. So they stay probably longer.

So this is why the roaming revenues went up a little bit.

Thank you.

Don’t make it big point, I guess, let say. All right.

Thanks, Drew.

Thank you very much. Most of the questions have been answered, but I do want to clarify on a couple of things and first is on the cost and the margins for your wireline business.

You mentioned, Fizz ARPU or Fizz having an impact. I am interpreting that to be cannibalization.

Meaning like you are adding Fizz subscribers at a lower ARPU, and perhaps, some of these are coming from Videotron stepping down. Am I correct in interpreting that?

Is that happening in your base? Didn’t seem to be issue -- as much of an issue in the past, so I am just wondering if you can elaborate if that’s a cause?

Well, I mean, there’s some cannibalization, Jeff. I am not going to tell you that there’s none.

But that’s not the main factor. Yeah, there is as we are growing Fizz more faster.

Yeah, it is taking some from Videotron, for sure. But I think it’s been taking a lot and we are talking wireline, right?

We are talking broadband now.

Yeah.

It’s been taking a lot from the TPIAs, I mean let’s be honest and it’s been taking some from some of the other sub-brands. So that’s where it’s performing most.

I mean, there is some cannibalization. But as you said yourself, it’s no more material today than it was in the previous quarter.

It’s just -- my comment was more just mathematically, because most of our growth in broadband in the quarter was a result of Fizz new adds as opposed to Videotron at a lower price point that put pressure on our numbers.

Do you have that for some place to try up here your service and focus more on the Videotron brand to turn that ARPU trend around?

Well, yeah, I mean, we are -- as you know, Jeff, it’s not, I mean, we have -- we are positioning our two brands very differently and we are focusing on different segments of the market and different geographies and demographics, of course, with Videotron being on the -- performing better on the higher end and/or the higher price points and Fizz on the lower price points. But so what I think both Pierre Karl and I have pointed out a number of times that in the market is -- it’s a competitive, but it’s a price sensitive market that we are living in and in broadband, it is increasingly favoring performance by Fizz, because that’s where to [inaudible] that’s where we are positioning it and we are more aggressive to do exactly what you pointed out at the beginning, to lower as much as we can that cannibalization between Videotron and Fizz.

I would say, Jeff, that we certainly don’t invent sub-brand. You have been seeing some brand low cost in the telecom business everywhere in the world, and I guess, in other industries also.

So, that was the certainly missing part of our offering and this is why we launched a few years ago. We are expecting a certain amount of kind of cannibalization, for sure.

What we can say right now is that this fortune is certainly much smaller than what we are getting out of the entire market. On the premium side, on the Videotron, we have been playing the quadruple play for a long time, and I guess, that’s what Shaw’s been doing in the West that -- when they were in a competitive landscape.

So again, you know, as what Hugues said is a different market being addressed differently where the Fizz brand going in the sub-brands market and there’s few of that. There’s I am not on the wireline side, but there’s certainly Virgin and many others TPIAs where the other sub-brands in the wireless are also numerous.

Great. And then sticking to costs, Helix migration seems like a big number this quarter and a big number for 2021.

That must have been a big contributor if I interpret your comments to the cost because of the platform costs that you have to pay Comcast for that service. I am also interpreting that those migrations are not necessarily coming with incremental revenue at Fizz, it had that bigger impact on margins, am I reading that correctly.

Yes. Yes.

You are. But, yeah, you are -- just before I answer that, though, I just want to make sure that on your previous question, because one thing I didn’t say is that, the Fizz margin keeps increasing right.

So, of course, there’s some cannibalization, and of course, we are not going to -- we have 50% of the broadband market or thereabouts, so of course, there will be some cannibalization on Videotron. But margin as Fizz takes a higher proportion of growth, its margin keeps increasing.

So just -- so that’s very clear. Now moving on to the migration, the Helix migration that you are that, that’s exactly what I was saying when I talked about the platform, when I talked about cost.

It isn’t that -- I think it’s important, I want say, it is a somewhat expensive migration for us, especially while that migration is ongoing and before we can take out entirely the cost base that is linked with our more legacy systems and our legacy platforms. In terms of ARPU, Fizz is a different, it’s a premium product.

I mean it’s got more functionality. Maybe I will put it that way.

So in many ways can point to higher ARPU. But at the end of the day we are living in a competitive market, where our main competitor is in many areas, reducing prices and offering its platform at lower prices.

So we have to respond and we have to play the game. So -- and I believe we have been -- in terms of growth, in terms of net adds, I think, we have been playing it rather well, while keeping an eye on that margin that I talked about.

So I mean it’s a bit of a balancing act and we will continue to balance these two things going forward.

Thank you. And then just to follow up on with Pierre Karl to just two quick ones to finish off.

It sounds to me, Pierre Karl, that you are now more focused on the MVNO path to expanding outside of Québec for wireless as opposed to acquiring the Freedom assets to expand. Am I reading that correctly, meaning that if you are now successful and acquired Freedom that the MVNO is the path to go?

I would say not really, Jeff. I guess that there are two fronts there.

One, we spoke about earlier regarding in the Competition Bureau. So we are going to wait until the end of this process, which is facing another process with the CRTC.

So, I guess, both work in the same direction where I guess Canadian needs competition. And one side we have the access to start and again depending on what will be the tariffs that we will face we have a good idea about the tariffs.

You know what the tariffs are in the U.S. and we have also intelligence elsewhere in Europe, because MVNO is not something that started yesterday.

It’s been there for a very long time everywhere. So we hope that the CRTC will listen to our representation, because this intelligence is shared with them making sure that if -- again they really believe that they are looking for competition and this is probably why they decided that they will go with this decision last July, and therefore, let’s make sure that all those conditions will be there.

So, overall, I would say it’s a win-win situation, both perspectives are favorable to Quebecor.

Great. Thank you.

Okay. Thank you very much to all and let’s talk together at our next quarter meeting.