BCE, Inc.

Good morning, ladies and gentlemen. Welcome to the BCE Q1 2022 results conference call. I would now like to turn the meeting over to Mr. Thayne Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Elena, and good morning to everybody. It's good to be back with all of you this quarter hosting today's conference call. As usual, here with me today are Mirko Bibic, BCE's President and CEO, and our CFO, Glenn LeBlanc. You can find all of the relevant Q1 documents on the investor relations page of the bce.ca website, which we posted earlier this morning. However, before we begin, I'd like to draw your attention to our safe harbor statement, reminding you that today's slide presentation and remarks made during the call will include forward-looking statements and information, and therefore are subject to risks and uncertainties. Results could differ materially. We disclaim any obligation to update forward-looking statements except as required by law. Please refer to our publicly filed documents for more details on assumptions and risks. With that out of the way, I will hand it over to Mirko.

Thank you, Thayne, and good morning, everyone. We've had a very positive start to the year. Our dedicated Bell team once again delivered strong operational financial results, driven by consistent and disciplined execution, leading broadband networks and services, and a focus on service excellence, all underpinned by a set of strategic initiatives that have guided us over the past two years, as you know, and that will continue to guide us in 2022 and beyond. Although Omicron undoubtedly is causing some near-term disruption, notably for Bell Business Markets and media advertising, we achieved robust total revenue and adjusted EBITDA growth of 2.5% and 6.4% respectively in Q1. This represents the first quarter in which our consolidated financial results surpassed pre-COVID levels. The second year of our historic CAPEX acceleration program is in full swing with close to a billion dollars in new capital spent in the quarter. We remain on pace to deliver approximately 900,000 new direct fiber connections and further expand our 5G service footprint to more Canadians while also launching a standalone 5G core, notably on 3.5 GHz spectrum. With our mid-term broadband internet build-out plan 80% completed, and 5G network service available to more than 80% of Canadians by year-end, we expect CapEx to begin decreasing starting in 2023. Bell's wireless performance in Q1 was a highlight, as we continued to balance market share growth with operating profitability. We led the industry once again this quarter in service revenue, ARPU, and EBITDA growth. In fact, at 8.7%, we delivered our best quarterly wireless service revenue growth rate in 11 years. This is reflective of our consistent focus on high value post-paid growth and effective subscriber base management. And our new unlimited ultimate plans introduced in February truly demonstrate the value prop of 5G and highlight Bell Mobility's differentiated offerings, serving as a catalyst for the consumer upgrade cycle from 4G to 5G handsets and service. On the enterprise side of things, our accelerated broadband investments mean that innovative applications, solutions, and platforms that rely on converged fiber and 5G networks are becoming more widely available. And our partnerships with leading hyperscalers will expand the use of multi-axis edge computing and other next-gen technologies. Building on these partnerships and our unmatched network capabilities, Bell was the first telco in the world to deploy Google Distributed Cloud Edge for core network functions, an important milestone that gives Bell the flexibility to deploy 5G network functionality in a variety of different architectures. And just last week, we launched the first public MEC in Canada powered by AWS Wavelength. The inaugural AWS Wavelength Zone has been launched in the Toronto region with customers including apparel retailer Rutsack, robot food delivery service Tiny Mile, and drone operator Drone Delivery Canada, among the first to leverage this new 5G infrastructure. As I've stated before, the demands of 5G-enabled network services and applications will require the fastest data speeds and the quickest response times to provide the very best user experience. And in that regard, our network capabilities and footprint breadth are unmatched. But we're not standing still. In fact, just this past April, we raised the bar with a widespread commercial introduction of a 3 gigabit symmetrical internet service in most areas of Toronto. These are speeds that cable networks just cannot match. And in February, we acquired internet provider Ebox to strengthen our competitive position and accelerate our market share gains in the value-seeking consumer segment of the Quebec market. Even as we continue to build globally leading broadband infrastructure, telecom services also remain affordable. If you compare the cost, for example, of a telecom service bundle, let's say pure fiber internet, IPTV, and unlimited mobile 5G data plans to the price of gasoline, an average sized car would require a monthly minimum of probably around $400 in gas. This is approximately two times higher than the cost of a starter package from Bell, which would give you unlimited usage 24-7 every day of any given month. According to the most recent StatsCan data, the price of all goods and services in aggregate across the Canadian economy over the past two years has increased about 9% versus a decline of 26% for telecom services. Turning to media, we continue to experience good momentum across our streaming distribution platforms and digital advertising markets. Total Crave subscriptions increased 3.4% over last year, while customers on direct streaming service grew a strong 19%. This, together with our Canadian-leading CTV AVOD app, continued rapid scaling of the SAM TV advertising sales tool, where year-to-date bookings are already 45% ahead of full-year 2021 levels, and our recently launched Nouveau Info digital platform, contributed to exceptional digital revenue growth of 84% this quarter. And lastly on media, FanDuel, North America's premier online gaming company, struck a multi-year agreement with TSN to become its official sportsbook partner, beginning in Ontario. Let me now turn to our strategic imperative to champion the customer experience. Our customer experience-focused culture enabled by the strong performance of our teams and investments in AI and machine learning capabilities continues to drive improved satisfaction, loyalty and retention as you see in lower year-over-year churn rates across all our wireless and wireline retail residential services. With innovations like enhanced self-serve and self-install, award-winning apps, move valet and virtual repair Bell had the largest reduction in customer complaints among national providers in the latest report from the CCTS, with a 36% reduction over the previous year. The share of Bell's overall complaints also decreased by 13%, reducing our share for a seventh consecutive year. So really, if you take a step back and take a view of the full picture, we're aggressively building out next-gen digital networks. We're aggressively executing on our digital-first media strategy. We're gaining subscribers, share, revenue, and earnings growth is coming along with it, and that's on the back of our digital networks and platforms. We're digitizing our customer experience tools, both those we use to serve customers and those that our customers are using themselves. And all of this is allowing us to stop using and to, in fact, decommission legacy networks, products, and tools, from copper to satellite technologies, where appropriate and beneficial. I also wanted to highlight now a couple of developments on the ESG front. Following the formalization of our commitment in 2021 to hold Bell to the highest ESG standards with the launch of Bell for Better, we've broadened our strategic imperatives to include sustainability directly in our corporate strategy. Consistently ranked as one of Canada's greenest employers, we've set increasingly ambitious environmental targets with our commitments for GHG emissions and waste reduction. These include a 57% reduction of our absolute Scope 1 and Scope 2 emissions by 2030, the recovery of 7 million used TV receivers, modems, Wi-Fi pods and mobile phones over the next two years, and reaching and maintaining a 15% total waste-to-landfill reduction ratio by 2025. Reflecting our continued efforts to engage and invest in our people, we were recently named as a top family-friendly employer, One of the best workplaces for young people and young professionals, as well as a top diversity employer for a sixth consecutive year in 2022. Just for those following along, I'm going to turn now to slide six. Provide an overview of some key operating metrics for the quarter. I'll start first with wireless. As I mentioned, definitely a highlight this quarter. We added 34,230 new net postpaid mobile phone subscribers. That's up 4% from last year. Really a great result underpinned by our best ever Q1 postpaid churn result, which improved 10 basis points over last year and now sits at 0.79% for the quarter. We also were even more targeted in our competitive approach as our objective is to get the right market share, as I've mentioned several times in past quarters. We're really focusing on high-value smartphone subscribers to grow service revenue and ARPU. It's a disciplined approach for sure, and it's paying dividends, as you can see by our industry-leading ARPU growth, and that was up an impressive 5.1% in Q1. This was supported by increased travel, which drove higher roaming volumes and higher monthly recurring charges due to a greater mix of customers on premium rate plans. For mobile connected devices, the strategic focus remains on IoT subscriptions as innovative new business and consumer applications begin to emerge with 5G, and these increased 6.5% over last year to approximately 94,000. So that's wireless, and let's move now to wireline. You know, the fiber acceleration strategy is really working. We added more than 26,000 net new retail internet customers, and that represents a 23% increase over last year. And if you look specifically at our fiber-to-the-home footprint, we delivered an even stronger result with 38,049 new customer additions, and that once again drove strong residential internet revenue growth, sitting at around 8% in Q1. We also added 12,260 net UIP TV subscribers. That's up 14.6% versus Q1 last year, and that's on the back of our customer segmentation approach and lower customer churn. And satellite TV net customer losses were, for all intents and purposes, stable year over year at just over 20,000, while home phone net losses improved 17% to 42,345. So if you put it all together, accelerated fiber expansion, customer experience improvement, lower customer churn, and the best product offerings are continuing to drive more and more customers onto Bell 5. At the end of Q1, 91% of Bell residential households with internet and TV were on our fiber network. At Bell Media, in addition to continued strong digital momentum, TV advertising demand in Q1 strengthened versus last year, despite some advertiser pullback in some sectors due to the Omicron lockdowns and some supply chain disruptions. This was the result of a fuller live sports programming schedule with more NFL playoff games, our Super Bowl broadcast, which was the most watched program in the quarter, and that helped to keep TSN and RDS atop the rankings again. Continued strong specialty news performance and nouveau broadcast, which continued to outpace all other French-language conventional TV competitors in viewership growth with prime time audiences that were up 13% this winter. Taken all together, these factors drove a 7% year-over-year increase in total TV ad revenue. This was above pre-pandemic levels for a third consecutive quarter and 11% higher than Q1 of 2019. I'm going to hand it over to Glenn in a second, but before I do, I'd like to acknowledge the Bell team as we began our return to a new, more flexible hybrid workplace in early April after a long two-year hiatus. And I want to thank them for their outstanding support for one another and for our customers under very difficult circumstances. What they've done in keeping Canadians connected and informed every single day has been nothing short of impressive. I truly believe that our company has come out of COVID stronger. We're still in COVID, but we're coming out of this stronger. We have an ambitious customer first agenda. We have an ambitious network build agenda, and we have a corporate purpose that's clearer and more important than ever. And on that, over to you, Glenn.

Thank you, Mirko, and good morning, everyone. Another quarter of great execution by the Bell team to deliver a strong set of consolidated financial results in Q1. Adjusted EBITDA was a highlight, growing 6.4% on year-over-year increases across all operating segments, despite some COVID-related headwinds at Bell Business Markets, which affected data product sales in the quarter. Service revenue growth accelerated to 4.2% on strong wireless, residential internet and media results, which drove a notable 1.6 point increase. increase in margin to 44.2%. Further transparency, our results this quarter included a one-time retroactive adjustment to Bell Media subscriber revenue. Normalizing for this one-time retroactive adjustment consolidated EBITDA growth for Q1 would have remained quite healthy at 3.5%. Net earnings increased 35% on the flow-through of strong EBITDA growth, as well as higher other income driven by a one-time gain from the sale of CREATEC in March, and a non-cash mark-to-market equity derivative gain as a result of BCE's share price appreciation in the quarter. Similarly, adjusted EPS was up 14.1% year-over-year to 89 cents, reflecting a high EBITDA contribution from operations and lower year-over-year pension financing costs, reflecting the strong net surplus position of our post-employment benefit plans. I never get tired of saying that surplus position. CapEx this quarter was down slightly year-over-year due to timing of spend. We remain firmly on pace to invest around $5 billion in total this year. As for free cash flow, our Q1 result was in line with plan and reflected lower cash from working capital due mainly to timing of supplier payments, which should reverse out next quarter, as well as an increase in interest paid on the higher level of outstanding long-term debt. Let's turn to wireless on slide 9. Another set of exceptional financial results that led national peers once again for the fourth consecutive quarter. Service revenue growth improved sequentially, increasing to 8.7% from 6.3% in Q4. This strong acceleration reflects our even sharper focus compared to last year on high-value postpaid and prepaid subscriber growth, as well as continued recovery in roaming as international travel activity increases. In fact, roaming revenues exited the quarter at just below 80% of pre-pandemic levels. Product revenue was down 3.8% as total transaction volumes continued to trend lower year over year, reflecting a sustained high proportion of new subscribers activating services with pre-owned devices and longer handset life cycles, which is financially attractive from both a working capital and a customer lifetime value perspective. Finally, wireless even also accelerated significantly, growing 9.3% on the high flow-through of strong service revenue growth and our disciplined and targeted responses to competitors' promotional offers, which drove a 1.7 point year-over-year increase in margin to 45.7. Turning over to Wireline on slide 10, residential grew solidly year-over-year, led by internet revenue, which increased 8% on a combined impact of higher ARPU and continue market share gains. However, total wireline revenue is down 2.2% this quarter, reflecting a 28.6% decline in product revenue, as our business markets unit continues to experience near-term headwinds from ongoing global supply chain shortages that are impacting equipment availability. This is not only temporarily deferring product sales, but also delaying product spend on follow-on business service solutions. We anticipate these pressures will continue to persist for the remainder of calendar 22. Also weighing on results this quarter was an exceptionally strong demand for telecom data equipment in Q1 of 21 from public sector customers, as well as the sale of CREATEC that I mentioned earlier that happened in early March. Despite lower year-over-year revenue, wireline even to growth was positive, increasing 0.3%, reflecting a 4.2% reduction in operating costs, which also supported margin expansion of 1.2 percentage points to 45.4. Let's turn to media on slide 11. Another quarter of industry-leading financial performance in Q1 is growth across all Bell Media platforms, including digital, which increased, as Mirko said, an outstanding 84% year-over-year. And that all drove a 15.7% increase in total revenue. Advertising revenue up 8.5%, reflecting continued strong TV advertising demand. While the COVID recovery in radio and out of home is progressing, it is slower than expected in Q1 due to Omicron. Subscriber revenue was 22% higher versus last year, reflecting continued strong Crave streaming growth and the aforementioned one-time retroactive revenue adjustment. Consistent with the year-over-year increase in revenue, media EBITDA was up 45.5%. However, normalizing for the retroactive adjustment, media EBITDA was down slightly year-over-year due to higher operating costs from the increase in live sports programming this year and higher broadcast license fees as the CRTC temporarily waived these fees in Q1 of 21 due to the pandemic. Finally, a quick update on our balance sheet and liquidity position on slide 12. Our investment-grade balance sheet is very healthy, with available liquidity of more than $2.8 billion and a leverage ratio that remains stable at 3.2 times adjusted EBITDA. During the quarter, we executed a highly successful public debt offering in the U.S., totaling $750 million USD. which was used to fund the early redemption of MTN notes maturing in early 23. Over the past two years, we raised a record $10 billion of long-term public debt, locking in low rates before interest rates began rising, while extending the average term to approximately 14 years and lowering the average after-tax cost of debt to around 2.8%. With no near-term refinancing requirements for the next 18 months, all major DB pension plans in a surplus position that will enable cash contribution holidays to begin later this year and substantial free cash flow generation that is growing organically year over year. We have the financial strength to execute on all strategic and capital market priorities for calendar 22. So with this positive start to the year, together with combined operating momentum across the business and our consistent proven execution in a competitive marketplace, I am reconfirming all of our guidance targets for 22. And on that, I will now turn the call back over to Thayne and the operator to begin Q&A.

Great. Thanks, Glenn. So before we begin, I want to remind everyone that due to some time constraints this morning because of our AGM that's taking place shortly after this call to please limit yourselves. to one question and a brief follow-up if you must. So we can get to as many of you as possible in the queue. With that said, Elena, we're ready to take our first question.

Certainly. Thank you, Mr. Fotopoulos. So if you have a question and you're using a speakerphone, please lift your handset before making your selection. If you have a question, please press star 1 on your device's keypad. You may cancel your question at any time by pressing star 2. Please press star 1 at this time if you have a question. There will be a brief pause while the participants register. Thank you for your patience. The first question is from Drew McReynolds with RBC. Please go ahead.

Yeah, thanks very much. Good morning and just great set of results. And Glenn, I'll say surplus position just because you want to say it a little bit more frequently. So congrats on that. Quick one for me, just it's a data consumption question. you know, maybe starting with you, Mirko, can you just give us an update on internet data consumption, household consumption, and, you know, where you see demand for those bigger high-speed gig plans going, and then just an equivalent question on what you're observing with 5G handsets and data consumption there, as obviously you want to migrate folks up to the, you know, larger data and limited plans. Thank you.

Thanks Drew. I'll start with 5G. We're definitely at the beginning of the upgrade cycle from 4G to 5G and it's going well. Customers using 5G handsets with 5G plans are definitely consuming significantly more data, and therefore the monthly recurring revenue is higher from that base of customers. So that's quite encouraging, and also especially encouraging to my mind anyway, and well, it's a pretty obvious point I'm going to make, so it's not just to my mind. It's especially encouraging that steps are being taken in the marketplace to really monetize 5G, because we're making some massive investments here, too. to cover the entirety of the country with 5G. It's capital intensive. We've also spent $9 billion as an industry for that spectrum. So we obviously have to monetize it. You've seen steps being taken, particularly by us, but by some of the others. So you've got the unlimited ultimate plans, which are trying to encourage customers to subscribe to the higher value unlimited plans. Early days, but working. And you see some moves like speed tier caps along that unlimited... package set of plans. So that's very positive. On wireline, look, I don't have at my fingertips the exact amount of household data that's being consumed, but I have quite a bit of confidence that there'll be significant demand for the higher speed tiers as we launch those more ubiquitously. Three gigabits per second upload and download, frankly, from us on fiber is just the beginning. We're going to continue to be aggressive on that because we really do want to continue to lead on network superiority. It works for us. And we, as I said before, cable technologies just can't match what we'll be able to offer on speed. So as those become more ubiquitous, as applications and usage becomes more prevalent, usage grows even more in the home, those plans are going to have ever more value for consumers. for customers. And as I've been talking here, Drew, the average household usage per month is over 400 gigs.

Thank you for that.

Thank you. The next question is from David Barden with Bank of America. Please go ahead.

Hi, it's Matt Griffiths sitting in for Dave. Thanks for taking the question. So I just wanted to circle back maybe to the one-time item that is in the media segment. If you could just maybe elaborate on how much that was in the quarter and what it related to exactly. And then there was a comment made about CapEx decreasing in 2023, which obviously is the year when you're rolling off of the accelerated program. But Are you also referring to the kind of base rate capital intensity of 17? Has the potential of stepping down in that year as well? I just wanted to make sure I'm accounting for the decrease correctly. Thanks.

Good morning, Matt. It's Glenn. I'll handle the first part. I think Merkel will make some comments on your questions regarding capital intensity. In the quarter, we recorded approximately a $70 million retroactive BDU adjustment, which related to content that Bell Media sells to another BDU. And if I normalize for that on a consolidated basis, the service revenue that we reported at 4.2% would be 2.9. I mentioned in my opening remarks, consolidated EBITDA would be 3.5. Now, this affects our media segment. So if I look at media at 15.7%, Revenue growth in the quarter, normalizing for this, it would be about 6%. And again, as I mentioned in my opening remarks, although the EBITDA is a staggering 45%, if I normalize for this $70 million, it would be slightly negative, which is what we would have mentioned in Q1. We expected recovery with... With radio and out of home, it's been a little slower due to Omicron than we would have liked. So all in all, a tremendous quarter across the board despite this retroactive BDO adjustment.

Okay, Matt, and on the CapEx question, I'm not going to give guidance for future years either on the absolute CapEx spend or the capital intensity, but I'll give you a directional answer, which I hope is helpful. So in the kind of shortish terms, We're trying to, or Shortish Horizon, we're trying to get to 10 million locations in our operating footprint with next generation broadband. And I'd like that split to be around 9 million fiber homes and the 1 million wireless home internet homes that we've already made our service available to. So that's how you'd get to 10. At the end of this year, with the accelerated CapEx program, we'll be in and around 7.1 million fiber locations. So, you know, there's kind of a 1.8 to 1.9 million more fiber locations yet to do and like to get those done by the end of 2025. So that kind of gives you a sense of the plan. So what I can tell you on CapEx spend is the $5 billion or so that we're spending this year is our peak CapEx year. And then it's going to start coming down. by how much we'll have more to say on that as next year comes. But you have a sense of what our journey is. And the strategy is working, and this is why we're doing this. And really, in a fairly short period of time, with 9 million fiber locations and 1 million wireless home internet locations, we really are building kind of long-life fiber infrastructure. And to me, investors should be very pleased with that. and we have a clear strategy. We're making the investments to support it. In answering Drew's question, I already talked about fiber superiority to cable technology, so I won't repeat that. But not only do we have a structural advantage over cable, but we also are miles ahead of U.S. telcos on that journey. And at the end of that $10 million location bill that I've been talking about, there's going to be some pretty strong free cash flow upsides.

All right, great. Thank you so much.

Thank you. The next question is from Stephanie Price with CIBC. Please go ahead.

Hi, good morning. Just following up on the last question, just curious, the U.S. telecom companies basically highlighted the fact that they're seeing more growth in fixed wireless. And I was hoping to get your updated thoughts on fixed wireless and whether Bell is considering a broader rollout of the technology beyond the $1 million you've already talked about.

I think the one million locations for us is kind of the right footprint now. Can it go up on the margins or down on the margins as we do some fiber overlaying some communities? Sure, but kind of one million is the right one. It's a service that's really, in our minds, directed toward better used or better utilized for rural and remote locations that otherwise wouldn't have access to fiber broadband in the near to medium term. So that's where it really does hunt. I would not put wireless home internet up against fiber. I certainly wouldn't. So fiber is the short, medium, and long-term goal here for us. And again, I'll re-emphasize the benefit to investors over the very long term for Bell to have built long-life fiber infrastructure. I can't underestimate the value of that for the long term.

Right, thanks. And just to follow up on the enterprise business, I wonder if you can quantify the impacts on the supply chain issues and maybe give us a bit more of an update on how you think about that rolling out for the rest of the year.

Look, so we're not immune to the supply chain challenges, that's for sure. I mean, we've managed a handset supply on the consumer side fairly well, so that hasn't been an issue. But on business data equipment, it has had an impact. There are some long delivery cycles that we're having to contend with. Glenn mentioned that in his opening remarks. We're expecting that to continue for the balance of the year. The current delays on order fulfillment probably isn't going to subside in the near term. The good news is That's also having an impact on follow-on service revenue that would be associated with business equipment that we'd otherwise be supplying. But it's not a competitive issue, which is the really good news. I mean, it's not like business is going to competitors. It certainly is not. We're just going to have to tough it out through the delays on fulfillment, and then the revenues will come both on the product and the follow-on service revenue side.

Great, thank you very much.

Thank you. The next question is from Vince Valentini with PD Securities. Please go ahead.

Yeah, thanks very much. Question on wireline revenue. Your commentary said higher acquisition retention and bundled discounts on residential services was one of the factors for the service revenue decline. Can we flesh that out a bit more? Are we just sort of pendulum bouncing back to close to the middle after the pandemic when there wasn't much customer activity and therefore not as much sort of promotional cost within your revenue? Or are we actually talking about elevated levels of competition starting to creep back into the battle between you and the cable companies? And if so or if not, is there any major difference by region or by province in that competitive battle?

Good morning, Vince. It's Glenn. I'll make a few comments here. I don't know if Mirko wants to add anything, but your summation is perfect. This isn't a significant step up in promotional activity. It's more of a return to historical norms after we went through such a quiet period of promotional activity during the pandemic. So I would say there's nothing alarming here, Vince, in our eyes. It's more of a return to historical norm.

That's great, Glenn. Thank you. Maybe a quick, because that was a quick answer, I'll do a quick follow-up, avoid Thane's wrath. The 91% figure, I'm still a bit fuzzy on what it means, 91% of your customers that take Internet and TV are on fiber to the home. Is that just within areas where fiber is available, or are you saying that's across your entire footprint, even though, you know, 40%, 35% or 40% of your homes still don't have access to fiber?

No, it's the former, Vince, so it's 91% of it. TV and internet customers in FibreFootprint are on the Fibre network completely and therefore, you know, that kind of speaks to, you know, there's 9% there in FibreFootprint that we need to migrate from some type of copper service, might be home phone to Fibre and that, you know, on the copper decommissioning journey that I introduced or hinted at at the last quarter and that we're really looking at very closely this year in terms of a planning year so that we can kind of attack copper decommissioning at scale, I guess, for lack of a better word, in 2023 and beyond.

Cool. And the 91% was the same as last quarter, but I assume that's just because the fiber footprint is growing. You're still migrating people, but the denominator is changing.

Got it. You've got it. Thank you, guys. Thanks, guys.

Thank you. The next question is from Jerome Dubreuil with Desjardins. Please go ahead.

Hey, good morning, everyone. Thanks for taking my question. The first one is on the ARPU trend. During the quarter, obviously, we have the data for the whole quarter, but I'm trying to assess the impact of January with Omicron here. Was there a material difference between the period during which there were restrictions and when the economy was more reopened? And then second, in terms of your guidance, you had a broader range than usual. the pandemic is now better understood. We've soon come to increasing its guidance. Would it be fair to assume you maybe now expect EBITDA to land toward the higher end of your guided range now? Thanks.

Good morning, Jerome. It's Glenn. I'll handle the last part first. The guidance ranges that we provided, I reconfirmed this morning, we remain very comfortable that those ranges are an accurate depiction of where we'll end up, and I'm not going to guide with more specificity on where we fit into that guidance.

And on ARPU growth, January versus February versus March, I don't really have much to add there. There's not much, frankly, of a deviation between the three months, but since you raised ARPU, let me provide a little bit more color on our ARPU growth. Certainly, the roaming rebound was a factor there, but it accounted for just about half or slightly more than half of the ARCU growth. So nowhere near the full growth is accounted for by roaming. I'm really pleased with that because it really demonstrates a healthy mix in the business. We've got roaming that was part of it, but nowhere near the entirety of it. So you're really talking about some strong organic growth there in terms of showing that the strategy that we are on is working.

That's helpful. Thanks.

Thank you, Jerome.

Thank you. The next question is from David Joyce with Barclays. Please go ahead.

Thank you very much. Just a question on the e-box acquisition. What should we expect from a product and subscriber roadmap from this? And what is the leverageability of this asset into other geographies? If you could please provide some more color on that. Thank you.

Yeah, so you asked some pretty important strategic questions there, which I'm not going to disclose on a call for competitive reasons. I'll just leave it at that. I can repeat what I said in my opening remarks. It was an important strategic acquisition for us because it will allow us to be even more competitive than we currently are, particularly in the value-conscious segment of the Quebec market. So we're going to continue to be competitive and put the pressure on in the province of Quebec, both with our aggressive fiber expansion and the continuation of the e-box service and the e-box brand.

Okay, I appreciate that. Thank you.

Thank you. The next question is from Simon Flannery with Morgan Stanley. Please go ahead.

Thank you very much. Good morning. The churn was very impressive, Dan, about 10 basis points year over year. If we looked at the U.S. guys, they were up a couple of basis points year over year. So it would be great to just unpack that a little bit in terms of what you're seeing, involuntary, voluntary churn, and how we should think about your ability to sustain or even improve from here.

Well, maybe I'll take the very last part of it. And, Glenn, if you have anything to add, please do. So sustainability, I think... I think, well, I hope it is, because we're doing a number of things. We've been doing a number of things strategically to get churned down. So clearly the customer-first approach that we're on is working, so we have better customer experience overall. We are offering tremendous overall value, whether or not it's on pricing, on quality, 5G, et cetera, and certainly we're at the forefront of that, but the industry is doing a tremendous job overall. Installment plans, the launch of those a couple of years ago certainly has helped churn, in my view. And devices are lasting longer, which is helping churn. And then the involuntary churn is stable, and that voluntary churn is down.

Exactly. Simon, just as Mirko said, we're seeing lower transactions in the industry, and that obviously benefits all in churn. And to your point, incredibly pleased with with our post-paid churn in the quarter at 0.79 and the improvements quarter over quarter and year over year. Great. Thank you. Thanks, Simon.

Thank you. The next question is from Sebastiano Petty with JP Morgan. Please go ahead.

Thank you. Just following up on the wireline segment, I think, Glenn, you talked about OPEX down 4% there on a year-on-year basis. Outside of perhaps the lower margin kind of product sales that perhaps didn't come through, anything else to unpack there, what you're seeing perhaps related to Vince's question on the network commissioning, any underlying drivers we should be thinking about there as it pertains to the rest of the year outside of perhaps the product sales impact?

No. I mean, obviously, when we have low product sales, both in our wireless segment and in our wireline segment, You see that play out in margin expansion, low margin product sales not there, so naturally the consolidated margin improves. Couple that with on our wireless segment, we had a significant flow through of roaming, which comes at extremely high margin, so that drives margin expansion on the consolidated business as well. You mentioned copper decommissioning. These are early days. It's a little early for that. The more we continue to roll out fiber, though, everywhere we roll out fiber, we start to see reduced truck rolls, improved operating. And, you know, I mentioned 4%. 4% is our net improvement. When you consider that we are absorbing inflationary pressures, which affect both wages and benefits, and in our business, fuel probably will cost us fifteen to twenty million dollars more this year than than a normal than last year due to the escalating prices that that four percent is even more impressive so it's really just you know blocking and tackling being cost conscious as we always are trying to find improvements reducing calls into our contact centers doing a really good job with self-serve and fiber is the gift that she just keeps on giving everywhere we expand fiber we have lower costs to operate and uh As Marco mentioned earlier, with our aggressive fibre program going forward, I'm pretty excited about the future and what that's going to do for us on cost-benefit.

To be pretty blunt, the copper decommissioning journey has pretty much not started. The benefits you're seeing in this quarter aren't because of copper decommissioning, although it's a very important and significant future tailwind, that's for sure.

Great, great.

And so maybe you're getting some of the lower customer service costs as the business migrates to more fiber customers, but the decommissioning is still later, longer-dated kind of benefit.

Great. Anything on the wireless post-paid loading environment? Obviously, the trends seem to be pretty solid across the industry. Any update perhaps on 2Q and how you're thinking on a full-year basis? Thanks. Thanks.

I think on post-paid loadings, we're pleased with Q1, that's for sure. The team executed very well and as you've heard me say before, including this morning, we're very targeted on the high-value smartphone category and I would say getting even more targeted in that category itself and you can see the benefits in our financial results. I mean, looking forward, I think, you know, if you look back at the last couple of quarters, including this one that we're reporting on, the operating momentum has been good and it's clearly continuing and it looks like good growth across the industry. So we continue to have things like immigration upside and, you know, the easing of the score constraints and early 5G momentum and, you know, the roaming bounce back and, you know, hazard to say that Competitive intensity between two potentially merging parties isn't quite there as it used to be and that's probably benefiting the entire industry so I'd say those are those are the elements that are That that that I look at to see how things are going to go in future quarters and it's looking good Thanks again Thank you, the next question is from David McFadgen with core mark securities, please go ahead and

Yeah, just a question on the retail internet. So when I look at your presentation, you know, you had 38,000 fibers in the home net ads, but the total retail internet now is 26. You lost 12 on DSL. I was just wondering, how would that compare to the prior year, like in terms of DSL subscriber losses? And then quickly, just on eBox, can you just confirm that most of their subs are on Videotron? And I guess it would be logical. that over time you try and move those subs from Videotron over to your network? Thanks.

I don't have at my fingertips the exact ratio of this quarter compared to previous quarters on DSL versus fiber, but it has been a trend for several quarters, a consistent trend that our fiber loadings... are higher than the net loadings you see, and we're waning in fiber footprint, and we're losing subscribers in copper footprint. So that continues to be the case. On EBOX, not to give precise numbers, I won't do that, but yes, strategically, those EBOX subscribers that are on a competitor's network, we will migrate over time to our network.

Okay. Thank you.

Thank you. The next question is from Aravinda Galapatik with Canaccord Genuity. Please go ahead.

Good morning. Thanks for taking my question. I want to start off with a follow-up. Marco, you talked about sort of what you described as the beginning of the upgrade cycle from 4G to 5G. You know, thinking about the consumer side, you already launched TSN 5G, but I wanted to get a sense of what your visibility is around the sophistication of sort of consumer-level applications that are in the horizon because, you know, it's sort of more, I guess, advanced applications that would sort of really kind of push that migration along. Wanted to get your thoughts on that. And then on a more general level in wireless, I mean, some of the U.S. telecoms have kind of talked about, you know, some impact from the economic clouds that we're starting to see, including in-store traffic and, maybe some other items as well. I just wanted to get a sense of, you know, looking at April, maybe are you seeing any hints of that at all in Canada?

Morning, Aravind. I'll handle the last part before Marco discusses the migration from 4G to 5G. But no is the short answer. We're not seeing any economic impacts, even in April, you know, the challenges of inflation or the strong economy are not impacting. I think we're still, in many regards, coming out of, COVID, albeit it feels at times it's two steps forward and one step back. Store traffic and I think consumer confidence to start moving around again is, I think, driving more of an impact than any economic headwind is. So the short answer is Aravinda not feeling any impacts and that would be true of April as well. I think most importantly, as Canadians get more and more confident, we're excited that we'll see more foot traffic back in our stores to more pre-pandemic levels.

Yeah, and on the 4G to 5G upgrade cycle, Aravind and I, in the early days, really what's driving it likely just a better experience on the network, faster, lower latency, better, more powerful handsets. I think that's what's driving the initial upgrade cycle. And we are doing our part trying to create consumer awareness and buzz around the power of 5G. And you referenced TSN, our DS5G view, and that certainly has worked to elevate the brand, the awareness of the power of 5G and the brand awareness of Bell as being a premium 5G network. In terms of what's next, I think the limits, probably our imagination is the limit. It would be a bit like 10, 15 years ago when we moved to 4G and who would have foreseen at the very, very, very beginning the extent of the apps that would be unveiled for the consuming public to enjoy on their handsets. And I'm expecting the same kind of thing with 5G. And I'm also expecting it on the enterprise side in a completely different way. But with low latency, converged fiber in 5G, with Mac, cloud, et cetera. So I think there's a lot of potential there on both the consumer side and the business side, of course.

Thank you.

Thank you. There are no further questions registered at this time, so I will now turn the meeting back over to Mr. Fotopoulos.

Thank you, Elena. So I want to thank everybody for their participation on the call this morning. That said, I will be available throughout the day for any follow-up questions or clarifications. So have a great rest of the day, everybody.

Thank you, everyone. Thank you.

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