Quebecor Inc.

Good afternoon, everyone, and thank you for standing by. Welcome to the Quebecois, Inc. Financial Results for the First Quarter 2025 Conference Call. And I would like to introduce Hugues Simard, Chief Financial Officer of Quebecois, Inc. Please go ahead.

Ladies and gentlemen, welcome to this Quebecor conference call. My name is Hugues Simard. I'm the CFO, and joining me to discuss our financial and operating results for the first quarter of 2025 is Pierre-Claude Péladeau, our President and Chief Executive Officer. Anyone unable to attend the conference call will be able to access the recorded version by logging on to the webcast available on Quebecor's website until August the 6th of this year. As usual, 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 the regulatory authorities. Let me now turn the floor to Pierre Cam.

Merci, Hugues, and good afternoon, everyone. I am happy to report once again solid operational and financial results for Québec or the first quarter of 2025. We're continuing to deliver on our plan, quarter after quarter, growing our wireless market share across Canada, generating superior cash flows and reducing our leverage to maintain the best balance sheet of the industry. Consolidated basis in the first quarter of 2020.

Okay.

I will continue, I guess.

So on a consolidated basis in the first quarter of 2025, Quebecor increased its cash flow from operating activities by $31 million, or 8%, to $420 million. It had CPTAL-excluding stock-based compensation by $13 million, or 2%, to $569 million, and its adjusted income from operating activities by $22 million, or 14%, to $185 million. We reduce our debt by $155 million in the quarter and thus improve our net debt-to-bid ratio to 3.26 times the lowest leverage of the Canadian industry, while investing more than $146 million in capital expenditures to continue to improve our network and invest in growth projects. I will now review our operational results, starting with our telecom segment. A strong start of the year for Videotron, Freedom, and Fizz, steaming from our effective strategies on mobile devices, disciplined pricing of mobile plans, and targeted capex spending supporting our long-term growth opportunities. Despite a generally slower quarter, lower immigration levels, especially in the Freedom footprint, and unruly pricing strategies from our competitors, particularly in March. We stayed on course with our effective discipline execution, reacting and adjusting, still gaining traction and increasing our share net ads, as shown by our 54,000 net new lines in the quarter. Adjusted bid-dom margins improved significantly from 48 I'm sorry, 48.8% a year ago to 50.1% in good part due to a $13 million increase in gross margin on customer equipment offsetting the unfavorable impact of a $7 million increase in stock-based compensation. Our mobile ARPU would continue to decrease but improve Our sequential performance with a $1.3, $1.63 decrease in the first quarter compared with a decrease of $2.97 for the same period last year. We expect this trend to continue this year as we continue to optimize the market positioning of our various brands to mitigate the dilutive impact of the prepaid services of FIS and focus freedom on richer plans, and new initiatives that will continue to solidify our customer experience. After announcing early in the year a major upgrade to its mobile services by including state-of-the-art 5G Plus technology to all monthly plans, Freedom Mobile began the gradual deployment of 3,800 megahertz spectrum across its 5G Plus network in Ontario, Alberta, and British Columbia. This spectrum deployment will significantly upgrade Freedom Network capabilities, allowing customers with compatible 5G Plus devices and plans to enjoy faster connectivity, resulting in a richer and even more seamless mobile experience at no extra cost. This is also coming after the extension of their Roam Beyond plans to over 100 global destinations, which is also the case for Videotron customers. These investments are clearly having a significant impact on our churn, which continues to improve to become not only our lowest since the integration of Freedom Mobile, but also the best of the industry, an exceptional performance having come from the highest in the market two years ago. The outstanding improvement of our network coverage and performance is certainly the force behind Atron Double, along with our superior customer experience, a sticky competitive advantage that has maintained us at the top of the industry for many years at Lideau Aton. Speaking of client experience, Lideau Aton leadership positions have been recognized with many distinctive honors over the years. Again, in 2025, our outstanding customer service is recognized in the 2025 LACI reputation survey. Videotron was ranked the most respected telecommunication company in Quebec for the 19th time since 2006. The impressive track record spanning over two decades clearly demonstrates the power of our unique customer-centric business model as we remain committed more than ever to continue to build on that standard of excellence which defines us. Even more remarkable is the performance of our three mobile brands, Videotron, Freedom, and Fizz, in the latest mid-year report released by the Commission for Complaints for Telecom Television Services, the CCTS. While the volume of complaints logged by the CCTS for the industry as a whole deteriorated by 12%, our three brands remained steady, which resolved in a lower proportion of the total industry for each of them. Most notably, Freedom Mobile continued to improve significantly. Freedom and Fit's performance is even more noteworthy given the major cross-Canada expansion of both brands and consequently the substantial growth in the subscriber base. Along the long-standing success of Fizz Mobile and internet services in the province of Quebec, we launched our new Fizz TV, an all-digital television service. Now, available to all Fizz internet subscribers in Quebec, Fizz TV is differentiated by a pick-and-pay model that lets users build their own TV plan, bringing back

cord cutters to the cable service.

I would also like to point out the immediate success of our new Ilico Plus platform, released in October 2024, consolidating our content offering. Whether through traditional cable subscription or in OTT mode, we now total more than half a million subscriber Subscribers will enjoy a non-matched variety of French language content. With its enhanced catalog and improved user experience, ILICOplus is becoming the obvious destination to enjoy local original productions.

Turning now to the media segment.

CBL Group reported a negative EBITDA of $20 million in the first quarter of 2025, which is $1 million worse than last year's first quarter, and primarily due to the continued decline in advertising revenues resulting from the worldwide media crisis, as well as the impact of fewer major foreign productions in male studios, despite significantly lower operating expenses stemming from our ongoing restructuring plan. Even though CBA Group remained by far the dominant broadcaster network in Quebec, with a market share of more than 42%, the situation remains dire, and we must double down on our efforts to reduce our operating costs and expand our sources of revenue. Moreover, I repeat that the CRTC needs to set a fair and equitable regulatory framework, including a drastic reduction of actual financial administrative and regulatory burden waiting on Canadian broadcasters, and set meaningful financial contribution from foreign online service. For far too long, these companies have enjoyed a non-due competitive advantage, allowing them to access the Canadian broadcasting market without contributing to it, while Canadian broadcasters are subject to numerous regulatory obligations, financial costs, and a lack of flexibility that impact their competitiveness and perennity. In addition, as I have said again many times, the federal government must act quickly to reform Régio Canada and the CBC mandate and implement the numerous recommendations of the Yale report published in 2020, in particular by eliminating advertising, which is the private broadcaster primary source of revenue.

I will now let you review our detail financial results.

Merci, Pierre-Cal. On a consolidated basis in the first quarter, Quebecor recorded revenues of $1.3 billion, a decrease of 1% from last year. EBITDA reached $550 million, down $10 million or 2%, mainly due to a $22.5 million increase in stock-based compensation charge across all of the corporation segments. Excluding this factor, EBITDA was up by $13 million or 2%. Cash flows from operating activities increased $31 million to $420 million, up 8%. In our telecom segment, the total revenue slightly decreased by 2% for the quarter, primarily due to lower equipment revenues as we have transitioned to renting our Helix devices. Additionally, mobile device sales decreased as we maintained a disciplined approach to subsidy management. which led to a significant improvement in gross margin on mobile devices. Importantly, we also significantly mitigated the impact of the declining trends of wireline services by cautiously increasing wireline prices in late 2024. Driven by these effective strategies combined with our continued rigorous cost management, our EBITDA increased in the quarter by 6 million or 1% and by 12.5 million or 2% if we exclude the impact of the seven million in the case of DelaCom stock-based compensation charge. DelaCom CapEx spending, excluding the acquisition of Spectrum licenses, was up by $9 million in the quarter as we delivered our guided CapEx in 5G and 5G Plus network expansions, supporting our recent announcements combined with the rental of wireline devices. As a result, our quarterly adjusted cash flows from operations decreased slightly by $3 million, or 1%. Our media segment reported revenues of 165 million, or a 2% decrease, and a negative EBITDA of $19 million, $2 million unfavorable variance compared to the same quarter last year. Our sports and entertainment segment revenues increased by 6% to $50 million, and EBITDA was $3 million for the quarter. Quebeco reported a net income attributable to shareholders of $191 million in the quarter, or $0.82 per share, compared to a net income of $173 million last year, or $0.75 per share. Adjusted income from operating activities excluding unusual items and losses on valuation of financial instruments came in at $185 million, or $0.80 per share. compared to an adjusted income of 163 million or 71 cents per share last year. As at the end of the quarter, Quebecor's net debt to EBITDA ratio decreased to 3.26 times, still the lowest of all telecom operators in Canada. We intend to continue to deliver over the next quarters and operate in the low threes as we have stated before. Our balance sheet remains the strongest of the industry with available liquidity of more than $1 billion at the end of the quarter. We thank you for your attention, and we'll now open the lines for your questions.

Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. And should you wish to decline from the polling process, please press star followed by two. And if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. And your first question will be coming from Maher Yagi, Scotiabank Montreal. Please go ahead.

Great. I wanted to ask you, in terms of your subscriber loading in wireless, we saw a material increase in your net market share of net new ads in the quarter. Seems actually quite high and I was wondering if maybe we can get into a better loading versus pricing mix anytime soon. Noticed also last week pricing in Canada on the flanker side came down again. So you think we're getting to a point where pricing could start to improve? And if not, how long do you think your ARPU numbers will continue to be in the negative territory going forward.

Thank you. Well, you know, you're probably better positioned than we are to find out because you speak with the different operators in Canada. What I would say is that, you know, obviously we all know that we're going to have, sorry about this, you know, I kind of a mechanical effect, because the launch of our Frizz is doing good. And we introduce what we consider being a success. For the rest, we will continue to make sure that we work we're going to be in the marketplace regarding pricing. I don't think of any kind of nature that we are the one that is driving the market. What we're doing is, again, improving our network, investing in our customer service, being more present in the marketplace than what Freedom Mobile was when previously owned by the previous owner. We think that we're marketing the brand, our service well, and that the results are different. Any other comments that maybe you may have or you can add?

Just on our view, to your second question about the I mean, you know, I mean, we're not the aggressor. I mean, you saw it in Q1. I mean, we did what we said we were going to do. That is, we responded. The quarter started more disciplined. And then at some point, the one competitor and the same until the end of the quarter kept bringing prices down. So we responded as we said we would. But we always responded with time-limited response. promotions, as I'm sure you saw, hoping that competition was going to be a little bit more disciplined. Other than that, in that situation, of course, our view is going to continue to come down. Now, I think our path is still better than it was sequentially over the last few quarters. But who knows? It depends how competition continues to react. And in our case, churn was down significantly and continues to be down significantly. As Pierre-Claude said in his prepared remarks, it's down to the lowest of the industry. So I think from our standpoint, we are executing well and will continue to do so. You'll just have to ask the question to our competitors and you can start it with.

Thank you for your answers. Just to follow up, you're already in the low threes in terms of leverage. You mentioned your goal is to be in the low threes and your distribution ratio is still below 100%. So where are you going to allocate that extra capital if you're already close to your target in terms of leverage?

Well, as I said, a little bit more delevering. We are close to the low threes at 3.26. I agree with you. But we would certainly at this point intend to continue to repay down debt somewhat over the next few quarters to get between three and three and a quarter. We have, as you know, we have a CapEx program that's underway and that will continue. There's no specific pressures on dividends or on stock buybacks, which we can always flex. So we feel pretty comfortable as to our our capital allocation going forward, but still a little bit more of reduction of debt over the next couple of quarters, I would expect.

The opposite of our other operators, we generate, we don't need to borrow money to pay dividends. In fact, we generate cash, which we allocate between dividends, buyback, and debt reduction. This is what we did, you know, for the many few other quarters and many previous quarters, and we will continue to do this.

Great. Thank you. I'll ask you the same question in six months. We'll see where we are then.

All right. I'm counting on you. Be ready to answer, Maya.

Thank you. The next question will be from Aravinda Garapetich at Canaccord, Toronto. Please go ahead.

Good morning. I'm sorry, good afternoon. Thanks for taking the questions. I wanted to drill in a little bit with respect to the wireless gains. We've obviously been seeing a movement towards prepaid when you track some of the incumbents. Are you seeing a similar trend when you sort of dissect that $54,000 or the mix that you've had? Has that changed dramatically? I'll maybe start there.

No, in our case, the trend is that we're not seeing, I'll be honest, we're not seeing as drastic a trend as our competition. Actually, we're not seeing a trend at all. I mean, we've been both, all three of our brands, as a matter of fact, are performing quite well. So there's no huge movement from one to the next. All three are on different, obviously different growth strategies, but all three are gaining. So we are seeing a very balanced growth between prepaid and postpaid, and we expect that to continue.

Thanks. And then switching over to wireline, you know, no question Quebec's always been competitive, and that remains the case. We see that in the numbers. But, you know, there has been obviously price increases that are being announced. You indicated that yourself. Are you starting to see any signs of some reciprocity? I mean, when you look at the subnumbers, I think some of the comments you made in prior quarters suggest that you yourself should sort of step back a little bit in terms of promotions and look for some reciprocity from the telco. More recently, is there any sign of that, or is it sort of pretty much as usual?

Unfortunately, Aravinda, I wish I could say that we're seeing some more discipline in wireline in Quebec from Bell. I can't, and I'll point to a very recent, it's just, what, a few days ago, last week, you know, where a three gig internet for $55 a month, if you go online, on Bell's site, the same package in Toronto is $130. So I think that speaks for itself. I don't know what else to tell you.

Thank you. And just two quick accounting questions. I apologize, but just to get it in. One is on the depreciation. I mean, there's a little bit of a step down there, more than $20 million in Should we sort of base our future depreciation projections on that or was there anything unusual there? And then the TV sub losses slowed down considerably. I was wondering if there were anything I missed there, perhaps a reclassification.

Aravinda, on the depreciation and amortization, we are, as you know, we have been over the last couple of years very disciplined in our CapEx. And as you know, this brings, you know, this moves forward. in terms of our depreciation and amortization schedule. So we have been trending down and will continue to trend down. So what you see, the trend you see in Q1 is one to be expected for the rest of the year in depreciation and amortization. In terms of TV net ads, we were obviously, and we said that in our remarks, helped by the fact of the launch of Fizz TV. I'll be honest, at lower margins, obviously, we're still in launch mode. So that helped on that. The launch of Helico Plus as well, which we mentioned, was also a big plus for us. So these are the moving forces in TV net ads.

Great. Very helpful. Thank you. I'll pass the line.

Thank you.

Next question will be from Matthew Griffiths, Bank of America, Toronto. Please go ahead.

Oh, hi. Thanks for taking the question. My first one is just on churn. I understand, obviously, that it's down year over year. I was wondering if you could quantify it at all so we could get a sense of how much of an improvement you're experiencing. And maybe if you could maybe elaborate on historically the main drivers of churn have been things like bill shock and quality of the network and so on. From your perspective today, what are the main drivers of churn and where are you seeing success in driving it lower? I'm sure customer service is one, but I'd be interested to hear your thoughts on that. And then just an accounting question, if I could. As you're deploying the 3.8 spectrum, should we expect... any kind of noticeable material shift in kind of capitalized interest, interest expense, kind of as you go through that process? Thanks.

Well, I'd like to answer quickly, Matthew. I mean, you know, obviously promotions will have a significant effect on terms. If you're proposing with just, you were mentioning earlier regarding, you know, the latest pro moments. This is one, and it's the latest. But we've been seeing that kind of situation taking place very often. So the pressure on churn is important, which we are, I guess, able to slow down or to reduce by the fact that our customer experience has been all the time. And again, it shows in the different surveys that we're running. So it's It's the kind of things that we're offering compared to the competitor which is not able to do so or is trying to do so but never been able, you know, to really deliver on this. But certainly, you know, prices and significant and aggressive promotions are showing one of the probable most large factor of turn increase.

And as to your... Sorry, can I just... I understood that churn declined year over year, but you're saying churn increased?

No, no, no, no. Churn declined. Declined.

Our performance, what Pierre has said, our performance got better. Okay.

Maybe I misunderstood. Okay. Sorry, Hugh. I didn't mean to jump in.

No, no, no. That's fine. As to your second question on 38 capitalized interest, I don't expect... Honestly, I don't expect anything specific on this, Matt. Okay. And on capitalized interest continuing. So I honestly can't think of anything specific.

All right. I appreciate it. Thank you. Thank you.

Next question will be from Stephanie Price, CIBC Toronto. Please go ahead.

Good afternoon. So as you mentioned in your prepared remarks, you launched Fizz TV in Quebec and then Freedom Home Internet in a few provinces. I hope you can talk a little bit about the bundling strategy for Freedom and Fizz brands and what you're seeing in terms of uptake and what's next in terms of the bundling strategy.

It reminds me of the kind of conversation we had in front of the competition bureau Stephanie will probably remember, you know, when this was taking place, that the management of the Bureau was saying that we're not going to have something that is covering the bundled capacity that will disqualify Québécois, the new owner of Freedom Mobile, to be competitive with other operators. We've been, you know, being able to be even a TPIA in Quebec when we started servicing. I'm not sure that you remember that, you know, before building our network in a region called Abitibi, you know, we were a TPIA. We've been able, you know, to service our new customers down the road. with a TV service and an Internet service. So when we said that we're going to be able, you know, to deliver bundles in front of the Bureau, we knew that one day or another we'll go there. And why we will go there, because a few years ago we bought a TPIA. I guess that maybe we were the first one to do this. This TPIA was called D-Media, and D-Media was bought not because it was a TPIA. It was a TPIA, but I would say a TPIA+++, because the technology that they were proposing was a deliver or a delivering procedure to be able to offer television and internet, internet and television. And this is the technology that we've been using for FIS in Quebec and also elsewhere, as I mentioned earlier, to be able to offer a bundled service. And we look forward to get a certain portion of the market being interested in that kind of proposal. As of today, it's too early to be able to deliver comments, but we look forward to see that service being interesting, again, for a certain segment of the market.

Thanks for the color. And then, Hughes, maybe one for you. Just on telecom adjusted EBITDA margin, it was up year over year and ahead of the street. Just curious if you could talk about your ability to continue to ring costs out of the telecom side of the business here.

Stephanie, you know, there is always our saying here at Quebecor is that there's always more potential for cost savings and cost reduction. Of course, as I've said before, it always becomes a bit of a law of diminishing returns over time as we've always been very disciplined and very good at it. And we don't have the pockets of opportunities that maybe some of our competitors have. but there's always more you can do everywhere. And this is our, it's been our approach for many, many years, as you know, and we continue every week, every month to continue to look for opportunities of cost reductions. And, and you know what, when you look hard enough, you find. And one last point is that don't forget that our synergies from, with the integration coming from the integration of freedom has not yet all fully counted in as some of these, for example, in IT and other areas when you have to wait until the renewal or the end of a certain support or license agreements before you can combine and save money. So this is an ongoing exercise, but you can count on us to continue to push as much or as strongly as we have in the past.

I would ask Stephanie that we know that our competitors are using the new buzzwords. You know what the new buzzword is all about. AI or AI. So, yes, obviously, we're looking at certain solutions that is offering the capacity to automate certain of our process. To me, AI is... Potential to increase automation, which at the end of the day is reducing the expenses that we're forced to face running a telecom business with technology that is always improving. So we look at those buckets and we look forward eventually of being able to reduce our expenses accordingly.

Thanks for the call.

Thank you. Next question.

Next question is from Jérôme Dubreuil, Desjardins, Montréal.

Bonjour tout le monde. Thanks for taking my question. Kind of a similar line of questioning as Mire started with. You've been talking a lot about the perception gap that still exists between your brands and your peers' brands. Now you're talking about having an industry-leading turn. I wonder if you're still thinking that you have this kind of perception gap versus the other brands we see in the market.

Well, I guess that, you know, what we can say on this, as you know, is that, you know, we have different segments. And the one brand that, you know, we're working on more than other because This is the one we acquired, and we knew that we will face some issues, and we're addressing them. What we're trying to do, and I guess that we're achieving it, is to say that Freedom Mobile is a quality brand, is a product that is able to deliver not only prices, but also quality. And with the different other proposals that we've been able to offer, I think, have grown beyond. In fact, I guess that we should mention that, once again, we've been the operator introducing innovative proposals. And we will continue to do this. And by doing so, I think that we're improving significantly the image of this brand that was not considered as a premium brand. It was considered, you know, a low end. And yes, that, you know, we would not be able to deliver the amount of new subscribers without being able to deliver new segments of population and then an improved image. So we will continue to work on this grant, introducing innovative proposals, being competitive, having more partnership. We just announced yesterday, you know, a big partnership with the Calgary Stampede. So we're going to be the largest sponsor of the event. We did the same in Vancouver with the PNE, which is the Pacific Exhibition National Exhibition. So we're going to have a naming rights on the new amphitheater or stadium, kind of stadium. Stage. Stage in Vancouver. So I think that we're doing the right thing, you know, to get this brand and this service better known and better appreciated.

Yeah, makes sense. And a follow-up for me. CAPEX has been accelerating a bit on the telecom side. I mean, that was expected, but I'm wondering if there's any learning so far and if you're able to improve cash margins in some instances versus maybe the MVNO model.

Thank you. No. The CAPEX, as you said, was expected.

This was we're on plan. We're at the early stages of considering some network extensions in some areas, but nothing has been really launched yet. We're still at the very beginning of that phase. It'll get done, as we said many times, over time, where it will make sense for us to build, where we have built enough business and enough cash coming in So we're staying on plan, Jérôme.

Don't worry, Jérôme. We're not going to fall in love with technology. We've been seeing some operators being in love with 5G and increased significantly their capital expenditure to try to be the first and the only player in 5G. I guess that what we've been seeing down the road is they were not able to deliver any improvement in terms of our people, in terms of additional subscribers. So I guess that, you know, we should learn. Well, we don't need to learn because we've been not there, but we've been learning from our competitors' perspective, which opportunity for them didn't really deliver.

Appreciate it. Merci. Thank you. Next question.

Next will be Vince Valentini at TD Cowan Toronto. Please go ahead.

Yeah, thanks very much. Let me start on that CapEx question as well. If one or more of your competitors were to sell some of their towers and with a business plan deliberately intending to add more players and capacity under those towers, would that change your CapEx outlook at all, make things even better potentially as you start to analyze those MVNO regions gradually, Hugh?

Yeah, and Vince, well, it's interesting. I never thought that, you know, that could be the situation because then, you know, I'll tell you that I will be very surprised to see this happen. But, you know, I guess that, you know, obviously, if this was to take place, we'll look at it. And we're figuring out, you know, if it's better, you know, to build or to buy something. as we've been doing in the past. Don't remember, don't forget that, you know, before buying Freedom, we bought, we acquired Spectrum in the western part of the country, which will, obviously today it's an improved asset, but, you know, we're ready, you know, to use it to expand in those areas without being a historical operator like the one that we acquired with with, with freedom. So we'll see, you know, what's going to take place. I think that, you know, you've been, you guys in the market saying that, why this is not taking place in Canada, where everywhere in the world, we have been seeing companies or operators selling their infrastructure to fund investment fund that is operating infrastructure. We'll see. And figuring out also it's, it's kind of a minute, mathematical financial. It's a financial claim. We should not exclude anything.

If it takes place, we'll review it with the proper attention. Okay. Go back to that a little bit.

Yeah, sure. As you know, Vince, we're already renting on a number of towers. That's already something that's happening. It's not You know, it's not pervasive, but it certainly is something that's already happening. So we don't, you know, we will continue, as Birkal said, to look at the best financial option for us between renting, building, sharing. The one thing, though, that's been very clear for us for many years is that we do not intend to do any off-balance sheet deals, especially ones that aren't clear to the market before we announce them. But I'll stop there. Yeah, we'll stop here.

Sorry. I'll say on behalf of all the analysts, I appreciate that. We've got enough modeling to do on that front.

Yeah, I guess you have a lot of work.

We'll try to understand also. The other question, go back again. I'm going to be going back to something you talked about earlier just to circle back on a couple of things. One is the outlook for wireless ARPUs. as you say, it's tough for you to predict because it depends on what the market is doing. Can you give us your sense of how things look so far in the second quarter? I mean, it seemed like the start of Q1 was particularly slow for the industry, and that may have sparked some aggressive pricing behavior later on in the quarter that, as you noted, you were forced to respond to. Have you seen a little bit better market activity that may avoid that type of pitfall in

price aggression so far in the second quarter? No, unfortunately not, Vince.

It remains very competitive. I mean, we'll see. Again, the first quarter changed pretty much on its head towards the end of it, so I guess there's still hope that it might change the other way. In Q2, but who knows? As we keep repeating, you know, the answer to that question is not in our camp because we will not be the aggressor, but we will respond. So there's no change there. The only thing, Vince, I would add is that our handset subsidy, as you saw, is way down. Which will? And this is something we've been very disciplined on and tend to continue to be disciplined on.

You mentioned that the benefit to your future are proof, Hugh. Is there not a benefit coming at some point as well from the $5 step-ups? A lot of the Freedom customers were signed up on plans that were at a certain rate, and then after 18 months, it went up $5. We should have lapsed 18 months for some of them.

Yes, that's correct.

Did we start to see that change?

Well, yes, but as you know, at the end, it's all going to be a matter of where the market is at that point in time. But yes, theoretically, you are right, except that, as you know, it's a dynamic market. We'll see where the market is at the time of the $5 step-up.

Okay. And last one is on the cable business on Internet revenue. It did improve. in the first quarter versus the fourth quarter, but only by $2.6 million. Is that, in your mind, the full extent of the benefit of any pricing changes that happened in December? Or is there some sort of lag effect where we could see a bit more of an improvement on internet revenue in subsequent quarters?

Well, there are competing forces, as you know, on that. Yes, we are benefiting. from our price increases in December. But as you know, the market, and I mentioned some examples, and the market continues to be very competitive and increasingly competitive almost. So that certainly isn't, it's pushing the other way, obviously. So no, but specifically on your question, the price increases are in, and they were in for all of Q1. So I don't expect any Any more backwind from that in Q2, no?

Okay. That's all for me. Thanks.

Thank you. Next question will be from Drew McReynolds, RBC Toronto.

Please go ahead.

Yeah, thanks very much. Good afternoon. Three for me. First two, and then I'll ask my last one. Hugh, just on... An update on kind of market share, wireless market share outside of Quebec, so effectively in Ontario and Western Canada. Are you able to give us broad strokes on where that would be? Second, I know it was asked last quarter, just your confidence in turning telecom revenue growth positive at some point in 2025, while sustaining EBITDA growth, which obviously was really good here in Q1. Is that something you're still confident in? And then...

I'll just ask a third afterwards. Thank you.

Well, on market share, in Ontario, we have a bit of a higher market share, and let's call it in the mid-teens or thereabouts, probably, with a lower market share out west, as we had not focused on this earlier. at the beginning of or immediately after the acquisition of freedom. And we have been since allocating more investments and more time out west. So they are both growing, but I'd call it generally speaking out west of Quebec in the low teens is probably how I would give you in terms of market share. Your second question was equipment revenue. Is that what you asked, right?

Just your confidence in getting telecommunication segment revenue growth back to positive and just an ability to sustain the low single digit EBITDA growth that we saw in Q1.

Yes, yes, yes, yes. We are absolutely confident, especially on the equipment side. So, yes, due to the equipment side. So, yes, the answer to your question is yes.

Okay. Okay. And just quickly, my third one, and it just buys in a couple of previous questions in and around wireless, your volume kind of versus ARPU or growth versus profitability balance. Like it, it feels, I think the most on this line that there really is gravity that is falling towards the lower end of the market here. Not just for the big three, but just across the board. And Q1, clearly, you did very well on the volume side, and you are making progress, obviously, on ARPU, but it's still down pretty significantly. I'm just wondering, is your $5 discount, and I know I'm simplifying it, still required? Would you narrow that up, get less volume, but get better financials if the gravity is just inherently pointed not just towards you, but towards the discount or flanker? or freedom end of the market.

Just wondering what your thoughts would be there.

Drew, on that, you know, we, I don't know how else to say it. We said and we're continuing to say that we need a price advantage to continue. We're on a market share game, obviously. We're here for the long term. We're taking the long term view on this. to continue to be a force long-term, we need to pick up market share. Low teens or whatever we were discussing a few minutes ago is not enough. We're clearly on a path to higher market shares than that. As well, we are building, as Pierre-Claude said, we're building our customer experience. We're rebuilding Freedom's customer experience We're improving our network, and we're continuing to improve our network. And certainly in Ontario or in the GTA, certainly it has come a long way. But, for example, in Vancouver, I'll be honest, it's not quite up to what we would like in certain other areas as well. So we're continuing on this. And until we get there, and, you know, Rome wasn't built in one day. This has been two years, so we're continuing to improve all of these all of these KPIs, but until we do, until we're on par, we do need a price advantage. And we said we would do that, and we continue, so we will protect that price advantage. So, I don't know what else to say to you, but to talk to your other clients. And then try to get some logic into them, which we believe that there is. If there's more discipline, I think there's room for everyone. And maybe we would have done less than 54 and more RQ. That's true. And we would have gladly accepted that if it had been reasonable. But we felt that the answer to our pricing by that competitor, which shall remain nameless, in March was unreasonable. Anyway.

Yeah, yeah, no, understood, Hugh, and thanks for that additional granularity.

Thank you.

Thank you, Drew.

Next question will be from David McFadden at Cormart, Toronto. Please go ahead.

All right, thank you. Yeah, I was just looking at the subscriber trends, you know, on the internet, on the TV side, and I was just wondering if you could give us some sort of color on, is your success outside of Quebec, is that starting to have an impact here?

I was just wondering if you could add some color on that. Well, yeah, the impact of Bell in Quebec.

You're talking about Internet subs in Quebec, right?

No, no, I mean because you're bundling... Oh, the Freedom Home Internet?

Yeah. Bianca mentioned it a little bit earlier. It is... You know, bundling was clearly a key strategy for us at Freedom, based on our success in bundling at Videotron for many years. And we were very happy to be in a position to launch it very quickly. But it remains a bit early to give you real feedback on that. As you know, we went about it gradually. initially focusing on it as a churn reduction as opposed to us being too aggressive on that. So it has certainly worked from a churn standpoint, obviously, based on our numbers, but it is a bit early for us to claim victory on that one. It remains small, to be quite honest, and we will continue to develop it.

Okay.

All right. Thank you. Thanks, David.

And our last question will be from Tim Casey at BMO. Please go ahead.

Yeah, thanks. You mentioned Fizz TVs and Promo, and you've got a few other sort of bundle options. I'm just wondering, you're thinking about, one, are these promos, are they really just so small in terms of sheer volume that they're not impacting margin? And do you expect them to be a margin drag at some point, or are they really just around the edges?

Well, as volume picks up, I think it would be incorrect of me to tell you that they will not have an impact. Obviously, we manage all of our promos to make sure that we limit the impact on margin and with a view to increasing prices ultimately. So if it works out the way we intend and we believe that we're launching promos in the right, you know, in a disciplined fashion, it should ultimately build margin. I mean, that's what they're intended to do, and we, as we know, we can't control that, and sometimes it blows up in our face a little bit, but generally speaking, we have been improving as we are improving quality of the network and everything we've talked about, and these promos become increasingly attractive, as you know, so... But we will continue to be quite disciplined to ensure, obviously, to lower the impact on margin, for sure.

Thank you.

Thank you very much, all of you. And so we expect to be with you next quarter. In the meantime, I wish you well. Thank you.

Thank you. Ladies and gentlemen, this concludes the Quebecor Inc. financial results for the first quarter 2025. Thank you for your participation. You may now disconnect.