Quebecor Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Quebecois, Inc.' 's financial results for the 2021 third quarter conference call. I would like to introduce Hugues Simard, Chief Financial Officer of Quebecois, Inc. Please go ahead.

Good morning, everyone. Ladies and gentlemen, welcome to this conference call. Joining me to discuss our financial and operating results for the third quarter of 2021 is Pierre-Carles Péladeau, Anyone unable to attend the conference call will be able to listen to a recording by telephone or webcast. Access details are available on Quebecor's website at www.quebecor.com. The recording will be available until the 2nd of February of next year. I also want to inform you that certain statements made on the call today may be considered forward-looking, and we would refer you to the risk factors outlined in today's press release and reports filed by the corporation with regulatory authority. Let me now turn the floor to Pierre Carles. Merci, Eric. Good morning, everyone.

As we announced last quarter, we are moving ahead with our plans towards the expansion of our telecom services across Canada, thereby creating a real competitive dynamic and bringing to Canadians the benefit of technological innovation, superior client experience, and lower prices. The first step towards our objectives of becoming the fourth independent wireless provider in English Canada became a reality in July with our investment of nearly $830 million in the acquisition of 294 blocks of spectrum in the 3,500 MHz band across Quebec Ontario, Manitoba, Alberta, and British Columbia. Our investment of $357 million for 119 licenses in Quebec will enhance an already solid spectrum base acquired throughout the last decade, starting in 2008 prior to the launch of our facility-based wireless operations. These licenses will be used for the deployment of our 5G platform, which is already in operation in Montreal and Quebec City. The remaining investment of $472 million is dedicated to the acquisitions of licenses in the main regions of the aforementioned provinces. On this topic, I have to say that we were surprised by TELUS's court initiative against the Government of Canada to try and block the award of these licenses to Vidéotron. That being said, we were relieved, although not surprised this time, that the Federal Court clearly told TELUS that its claim was without merit and denied and do not raise a serious issue. This is the paragraph two. And I still quote, the decisive factor is the public interest in fostering greater competition in the market for mobile home services. And this is the paragraph four. It is sad to realize the length to which TELUS and Bell will go to delay, block, and to ultimately squeeze out, at all costs, any efforts to create healthy competition and ultimately lower the prices Canadians pay for mobile services. We continue to call on governmental and regulatory authorities to issue the licenses and, more generally, ensure that their long-standing competition policy and objectives are backed by concrete actions forcing the incumbents to actively cooperate and take the necessary steps so that Canadians are not left paying amongst the highest telecom prices around the industrialized world. I would also like to comment on our recent court action against Rogers, our longtime ally and partner in building a joint wireless network and connect. To remain on the legal side of business and keeping in mind that the sub judice rule as well as the respect owed to the courts, I will not comment any further nor I will answer Any questions regarding this matter? The only thing I wish to share is that over the last year, as described in the claim, we've always strived, through the Network Steering Committee, to find answers and solutions to the various change requests, demands, and other asks from Rogers' new managers. But every time we met Rogers' requests, they came back with further and higher demands. And since Rogers felt comfortable to state publicly that we failed to meet the investment asked to improve our joint network to benefit our customers, I myself feel comfortable to say that it's far from the truth to say the least. As you know, Vidéotron has been recognized for many years as the most respected telecom company in Quebec. Could this be possible without having our clients at the center of everything we do? We always acted as a true partner to Rogers and tried to avoid the unpleasant publicity of a public recourse. negotiating a suspension of the time limitation period of three years, according to the law, to give ourselves a chance to settle our differences, but to no avail. Given the current events at Rogers, we now understand why our discussions were not a priority and sincerely hoped that when the air clears at Rogers, we may have a chance to engage in a constructive dialogue with open-minded individuals. Turning to operational matters, we launched Vrai, the first French language video subscription platform dedicated to exclusive unscripted lifestyle, documentary, and entertainment content. In just a few weeks, we recorded 17,000 subscribers and over 200,000 views. We will offer 40 original productions this year and over 100 original Quebec productions by the end of 2022. Along with the success of Clu de Dico, which is dedicated to series, movies, and youth programs, this new platform will enhance and complement our content offering. We are expanding our collaborations with local producers, and we will continue to significantly invest in the production of new local content, thereby strengthening our leadership position as the largest catalyst for original French productions in Quebec. Speaking of Club D'Eco, our very own successful... OTT. We launched our programming two weeks ago with a record number of new majors' original series and an exceptional 2021-2022 lineup featuring leading figures of Quebec culture, such as Patrick Sénégal, Florence Nombré, and Sophie Dera, sorry, as well as Philippe Falardeau and Xavier Dolan. Finally, bringing all of these investments together, We also unveiled Qube, a new digital platform that brings all of Quebecor news and entertainment content together in one place. Available on the web and via a mobile app, Qube is a unique showcase with a vast quantity of multi-source, multi-format content where users will have access to millions of items, including text, music, video, and audio in a single environment, live and or on demand. Once again, on the forefront of innovation and anticipating market demands and trends, CUB will further reinforce one of Quebec's most important competitive advantages against our national competitors. Our unmatched ability to produce and deliver unique, differentiating news and entertainment content. On the B2B front, we're pleased to announce that D2E3 Business teamed up with Xtelia, a Quebec-based technology company, to offer a wider range of connected object solutions to accelerate the digital transformation of cities, municipalities, government organizations, and businesses across Quebec and provide them with solutions for waste management, water management and quality, smart parking, environment management, and noise pollution. Videotron also recently landed a major contract for IoT services with the STM, which is the Montreal Public Transit Authority, further strengthening its leadership position in Quebec. Moreover, in September, Vidéotron and TVA Sport announced their partnership with Trois-Rivières Lyon, which is a new team with the ECHL. The new Trois-Rivières arena is now named the Colisée Vidéotron, and TVA Sport is the exclusive optional broadcaster of the Trois-Rivières Lyon own games. This partnership demonstrates our continued commitment to Quebec's sports and entertainment industry supporting and promoting the next generation of Quebec athletes, as well as contributing to the economic development of Quebec regions through investment that benefits local communities. I will now review our operational results, starting with our telecom segment. On the wireless front, we posted 41,000 net ads during the quarter. Despite the continued aggressive competition from a loading and renewal perspective, especially towards the end of the quarter, we were able to keep our turn flat year over year and once again captured the largest share of growth ads by far with 37% of the market our best performance ever, and with our Vidiotron and Fizz brands coming in first and second position respectively, according to a Lege Marketing survey. Consolidated wireless app proof for the quarter declined 1.6%, or 83 cents, versus 2020. This decline is explained in large part by the diluted impact of of BYOD model at FIS, combined with a decline in roaming and data usage revenues. Redutron recently enhanced its value proposition regarding the equipment installer plan by launching in September the take-back credit program option, allowing customers to further benefit from reduced monthly phone payments. In broadband, We're pleased to report another strong quarter with a growth in internet subscribers of 22,500, 2,000 more than during the third quarter last year, and a 2.1% or $1.13 internet RFU growth. In the quarter, more than 100,000 edX installations were completed, bringing our total ELIX subscribers to over 1 million as of September 30, 2021. Our ELIX TV continues to help lower our TV turn rate and mitigate our TV subscriber decline, which was 13,400 in the quarter, an improvement of more than 2,000 compared to the third quarter last year. We continue to promote ELIX self-installations, and we are very satisfied with the results as far. We have already surpassed 100,000 self-installations since the launch in March 2021, and are pleased to report a 93% overall customer satisfaction rate. This program has proven to be very successful, and we will continue to improve it to maintain the current satisfaction rate levels. In our media segment, advertising revenues continue to increase, particularly in our television network, where they came in higher than the same quarter of last year, but also 22% higher than the same quarter in 2019, which is, as you know, pre-pandemic. BBA consolidated market share reached 38.2% for the quarter, strengthening our leadership position in the Quebec market with such hits as the French version of Masked Singers and the Stanley Cup Finals Hockey Games. Building on our number one franchise, we continue to increase our investment in content, a strategy that is reflected in our fall programming, with a wealth of new shows, original production, and exclusive content for our digital platforms such as TVA+, which continue to grow and build on its strong popularity. Our array of content is broader and more diverse than ever and is available on multiple platforms to reach more Quebecers on a daily basis and bring them together for major television events. Our film production and audiovisual services segment also perform very well with eye demand from mega productions such as Paramount Picture mega production Transformers, Rise of the Beast, and also from major online streaming players. Mail services are increasingly being recognized and used by international clients, placing us in the enviable position of being able to take advantage of the current market growth and plan for expansion of our facilities with the upcoming constructions of MELS IV. Our virtual stage services continue to draw the attention of producers with greater numbers using the technology to facilitate shooting certain scenes or creating advertising. I will now let you review our financial results.