Quebecor Inc.

Good day, everyone, and thank you for standing by. Welcome to the Quebecor, Inc.' 's financial results for the second quarter 2025 conference call. I would like to introduce Hugues Simon, Chief Financial Officer of Quebecor, Inc. Please go ahead.

Ladies and gentlemen, welcome to this Quebecor conference call.

I'm Hugues Simard, and joining me to discuss our financial and operating results for the second quarter of 2025 is Pierre-Carles Pédadeau, 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 October the 10th 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 authority.

Let's now turn the floor to Pierre-Cal. Merci, and good morning, everyone.

So, I'm happy to report once again solid operational and financial results for Quebecor in this second quarter of 2025. We're continuing to deliver on our expansion plan, quarter after quarter, growing our wireless market share across Canada, generating consistently strong cash flows, and reducing our leverage to maintain the best balance sheet of the industry. On a consolidated basis in the second quarter of 2025, Quebecor continued to improve all its key performance indicators. Cash flows from operating activities improved by $146 million, or 37%, to $538 million. EBITDA, excluding stock-based compensation, increased by 4 million, or 1%, to $605 million. And our net operating results increased by 22 million, or 11%, $227 million. We reduce our debt by $192 million in the quarter and thus improve our net debt ratio to 3.20 times the lowest leverage of the Canadian industry while investing more than $152 million in capital expenditures to continue to improve our network and invest in growth projects. With our cash flows remaining very strong, we are able to maintain the best balance sheet of the Canadian telecom industry without having to resort to quick-fix leveraging debt or infrastructure transactions, which surely will ultimately prove more costly. At Quebecois, we don't need to sell or pledge our assets to generate cash. and to reduce our debt and leverage ratio. We don't need to impair our future free cash flows with additional interest costs from Byzantine financial engineering structures. We maintain complete flexibility to continue to pay and even increase our dividends according to the board of directors policy to continue our share buyback program, obviously to repay our debt and to invest even more in our networks to provide best-in-class telecom services. Regarding last night's announcement by Minister Joly, let me first say that we never supported the tenets of reducing competition. But we should add, and this is very important, our positions remain the same and it's quite straightforward.

TPIA, pricing,

must be the same everywhere, coast to coast, independently of which network it used to provide the service. Failure to do so would create an unfair advantage to some players in the market at the detriment of others, which should clearly not be the CRTC role.

To be clear, there is no reason why Western Canadians

could pay more for their internet. We certainly made sure that they would not have to pay a penny more for their wireless services, and we intend to do the same for wireless. I will now review our operational results, starting with our telecom segment. We are very pleased with the second quarter financial results of Videotron and Freedom Mobile, as we continue to improve our performance on key operational leverage. As we have said, we remain disciplined on pricing of both mobile plans and devices. As a result, our mobile service revenues increased by 26 million or 6% in the quarter, our strongest performance since we started lapping the acquisition of Freedom Mobile. The desired revenues come from the addition of 346,000 net new lines over the last 12 months, and also from our ability to manage our pricing strategy with a balanced and complementary position of our different brands. As a matter of fact, with the mobile industry remaining highly competitive, we recorded the best performance of our consolidated mobile ARPU since the acquisitions of Freedom. Most notably, it is the first quarter since the acquisition of Freedom Mobile during which we potentially improved our ARPU from $34.31 at the end of March 2025 to $0.34 and $0.35 this quarter. On a year-over-year basis, our mobile ARPU decreased $0.97 this quarter compared to a decrease of $2.45 in the second quarter last year, clearly demonstrating our effective mitigation of the diluted impact of the prepaid services of Fizz and Freedom to a balanced and coordinated development of our three brands. At current pricing level, Our wireless sales are accretive to our business. This is quite the opposite in wireline in Quebec, by the way, and where we, our main competitors, have been offering in what we can call no so subtle way prices that are diluted to everyone in the market. We're happy to have added 72,000 net new lines to our mobile customer base in the second quarter, a very strong performance considering the software market growth condition this year. Again, there is no magic in this. Our continued superior growth comes from a balanced and complementary pricing and positioning with our three brands. Going forward, we will continue to focus on the richness of our plan on our superior customer experience and on new initiatives that will solidify our competitiveness and our market position. While the competitive landscape has recently shown some signs of stability and discipline, it will be key to see how it evolves over the next few weeks. And we're still seeing some of our competitors target customers but very aggressive, hidden, but really not so hidden offers, not available to the broader market. As we are entering the back-to-school promotional period, the market clearly remains competitive, and we intend to retain the discipline we have demonstrated in Q2, where our effective retention strategy and freedom strategy transition to a new improve customer experience culture, enable us to keep a steady churn level. Big question. Now, the lowest of the Canadian industry and a significant improvement over the second quarter of 2024. In Waterline, we believe things are starting to move in the right direction. Our service revenues continue to decrease, but the second quarter shows our lowest decline in over a year, and we are expecting significant improvement from new services like Freedom Home Internet and Fizz TV. We are also continuing to invest to provide our customers with the best possible connectivity experience. In June, we announced a major expansion of our Giga Internet service throughout the province of Quebec, adding high-speed access to more than 350,000 new potential households. We also introduced our 2.5 giga symmetrical speed internet access. Powered by Gideoton 100% fiber network, this new service is available for several regions of the province of Quebec, with the footprint continuing to expand over the next month. With these significant investments and improvement to our fiber network, we are delivering our ongoing commitment to provide our customers with state of the art advanced technology and to always give them more for their money.

Turning now to our media segment.

Group TVA generated EBITDA of $2 million in the second quarter of 2025, a decrease of $11 million compared to the same period in 2024, which is mostly due to one-time favorable retroactive adjustment of $10 million related to LCN channel royalty recorded in Q2 2024, as well as the impact of the absence of major foreign production being filmed at our male studio. Look, they are remains number one by far in terms of market share in Quebec, but cannot stop or even alter the generalized trend of declining over the air audiences, which lead to falling advertising revenues. The only revenue stream for the conventional broadcast. Not saving. resulting from our recently implemented restructuring measures, including those related to workforce optimization, helped us absorb this sharp and continuing decline in advertising revenue. But the situation remains dire, and the Quebec audiovisual landscape is at risk, especially in light of major competitive imbalances that the global web giant and the business practices of Radio-Canada. As I have said many times, it is imperative that governments step in quickly to correct these imbalances because the future of Quebec television is at stake. I will now let Hugues review our detailed financial results.

Thank you, Pierre-Carles. On a consolidated basis in the second quarter of 2025, Quebecor recorded revenues of $1.4 billion, a slight decrease of half a percent over last year. EBITDA reached $605 million, down $20 million, or 3%, more than entirely due to a $24.2 million increase in stock-based compensation across all of the corporation segments. Excluding this factor, EBITDA is up by $4 million, or 1%, and cash flow from operating activities increased $146 million to $538 million, up 37% compared to the same quarter last year. In our telecom segment, total revenues remain stable at $1.2 billion for the quarter, mainly due to the expected decrease in wireline equipment revenues caused by the rental program of Helix devices established in June of last year. This will be our last quarter having to overcome this transitional adjustment. We also cost-efficiently increased our gross margins for a third consecutive quarter, translating into a $9 million increase in the quarter. Most importantly, our total service revenues are back to the positive side for the first time after a year of declining trends. This is truly the result of our effectiveness at mitigating the impact of organic cork cutting and shaving trends of wireline services by cautiously increasing wireline prices and by competing with improved digital services and new technological features. We now counter wireline declines with strong mobile revenue growth fueled by significant customer growth and by a strategic market positioning of our multiple brands. Driven by these effective strategies combined with our continued rigorous cost management, our telecom EBITDA increased in the quarter by 1 million, and by $9 million, actually, or 1% excluding the impact of the stock-based compensation. Telecom CapEx spending, excluding the acquisition of Spectrum licenses, was down by $12 million in the quarter due to the timing difference of mobile equipment deliveries required for our 5G and 5G Plus network expansions. Considering the timing aspect of the situation, we are still looking at delivering our guided capex spending of 2025 and anticipate higher investment levels over the last semester. As a result, our quarterly adjusted cash flows from operations improved $14 million, or 3%, in the quarter, reflecting a favorable variance in the capex spending that I just spoke about. Our media segment recorded revenues of $174 million, or a 5% decrease, and an EBITDA of $9 million, million unfavorable variance compared to the same quarter last year. Our sports and entertainment segment revenues increased 13% to $52 million, and EBITDA was up to $5 million. Quebecor reported a net income attributable to shareholders of $218 million in the quarter, or 95 cents per share, compared to a net income of $208 million, or 90 cents per share, last year. Adjusted income from operating activities excluding unusual items and losses on valuation of financial instruments came in at $227 million or 99 cents per share compared to an adjusted income of $205 million or 89 cents per share in the same quarter last year. For the first six months of the year, Quebecor revenues were down 1% to $2.7 billion, and EBITDA was down 3% to $1.15 billion, mainly due to a $47 million increase in stock-based compensation. Excluding this factor, EBITDA is up by $17 million, or 1%. EBITDA from our telecom segment grew 2%, an improvement of $21 million over last year, again excluding the stock-based compensation. As of the end of the quarter, Quebecor's net debt to EBITDA ratio decreased to 3.20 times, still the lowest compared to the big three competitors in Canada. We intend to continue to deliver over the next quarters and operate in low threes as we are currently doing. Our balance sheet remains very strong, with available liquidity of over $755 million at the end of the quarter, following the redemption at maturity of Videotron's 5.625% senior notes. During the first six months of the year, we purchased and canceled 2.6 million Class B shares for a total investment of $91 million. And please note that the Board of Directors, upon termination of the August 2025 program, has approved the renewal of the program for an additional year. We thank you for your attention and will now open the lines for your questions.

Thank you ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Mayor Yagi with Scotiabank. Your line is now open.

I wanted to ask you in terms of your views on wireless. We're starting to see prices stabilize in Canada. I know you don't have a crystal ball, but let's assume that prices hold on to where they are right now. How long would it take for your ARPU results to stabilize and turn possibly into positive territory? And when you think about cable, same question, it seems like pricing has stabilized because of some of the adjustments you made late last year on rate plans. How would you see the market right now in terms of price competition in Quebec? Thank you.

That's a pretty long question, but we'll try to do our best. What you're a little bit asking is, again, you mentioned yourself. I guess that no one has a crystal ball here. What we've been trying to mention during our intervention was to say there are some trends that are taking place. which seems to be, as you would probably consider, in the right direction. This is for sure, the market was really competitive for a while, but this was according, I guess, to the new landscape. Are we migrating to another new landscape? Again, we're not going to change our for policy not giving guidances, but the only thing that we can emphasize on is the fact that we're seeing trends different than the one we've been seeing. Is there some exceptions? Yes, they are. Are those exceptions largely distributed? Well, not as what we've seen in the past. Maybe on the, I don't know, Greg, if you have other things to say, and address regarding, you know, what we've been asking regarding the cable pricing?

No, nothing. I think you've covered, I mean, you know, the improvement and stability is certainly there. I mean, we don't know, as we've said, how the rest of the year will fare in wireless as we're entering, you know, we are, I'm sure, you know, we are entering the end of the second half of the year, which is traditionally, more competitive. We'll have to see how competition reacts on this. We certainly, as we have said many times, do not have the intention to become more competitive. But we will continue to react to how our competitors will go through back to school and then Black Friday at the end of the year. In terms of cable, the situation is is continuing. We've said this many times. Bell continues to be extremely aggressive on price in cable and internet in Quebec. And we are maintaining our response, which we've adopted quite some time ago, of not responding, mostly not responding. And that's what we intend to continue to do because we just believe that when you run the math, it makes no sense collectively for Bell and ourselves to continue to be as aggressive in the market, in the wireline market in Quebec as they're continuing to be.

Okay. Maybe just on wireless, if I can ask the question differently. How much of the 3% ARPU decline is coming from repricing of the base versus lower prices for new entering customers in your front book? Has most of your subscribers repriced at the lower current prices or there's still more to go?

There's still, obviously, there's a lot, and the numbers are showing now that there's a lot less repricing. And we are coming to that neutral point that we had been talking about or maybe hoping for, which is, again, as we said, encouraging, but it has to continue for years. for the rest of the year to be going towards what you're talking about. Right now, at the 39 price level, it is accretive. So we have turned that corner. And so let's just see how it continues to evolve, as we said, for back to school and the rest of the year.

Good to hear. Thank you.

Hey, I had something there, you know, you know, we we refer earlier of being disciplined, but something that I think that we should have, you know, we will always remain very disciplined on the cost side, making sure again that, you know, we're looking at all what we consider being something that we can optimize. We've been working like this, as you probably know, you know, for a very long time, and we do not intend to change our strategy regarding

this side of the equation. Next question, please.

Your next question comes from Matthew Griffiths with Bank of America. Your line is now open.

Hi, thank you for taking the question. So you mentioned the expansion of the giga internet service and I think it was the symmetrical multi-gig service as well. Can you comment on Is this done as a response competitively, or is this something that you're seeing consumers now demand these types of speeds, whereas in the past their usage was satisfied by a much lower speed allotment? And then just on wireless churns, If I heard correctly, I think you said that you in the quarter had the lowest churn among the wireless providers. And I just was wondering, is that on a blended basis that you're comparing against the others? So if you look at TELUS, for instance, they have like 1.06 churn, if I'm not mistaken, in Q2. So am I to understand that churn right now is below 1. Is that what you're communicating? Or is it for like a different? Is it on a different basis? It would just be helpful to level set that comment.

I'll take the first part of the question and maybe on the turn side you can. You can come in on the on the Internet access. We've been as the cable provider always in front of technology. We've been offering. a lot of services for different type of clientele. The market is more and more segmented. Certainly, you know, people don't need capacity and speed, and others are asking for more. So, you know, we need to make sure that, you know, our product fits how the market segmentation works. And then, therefore, we've been seeing a trend where, you know, capacity, bandwidth, and speed is of something which has been asked. So therefore, we're making sure that we'll be able to service them with the kind of product that they're looking for.

And on churn, on wireless churn, Matt, really, on a consolidated basis, we are now, and that's why we're very proud, and that's why we keep saying it, we are now amongst the lowest of the industry and very close to the lowest of the industry. And when we say we are the lowest, we are referring to postpaid. But globally, I think what's coming out of this is don't forget that we started not very long ago with the highest wireless churn in the industry by quite some margin and are now very proud due to all of the factors that we've talked about many times. The improvement of our network performance, of our client experience, of the agility of our marketing development, et cetera, et cetera. Now we are keeping our customers longer and very, very close to on a consolidated basis and very competitive on a post-paid churn basis.

Okay, great. That's very helpful. And if I could sneak one other one in. Pierre-Carl, I think you mentioned about the financing that are going on across the industry. And so I wanted to ask specifically about the kind of partial divestment of towers, which could be viewed as positive, or I was really wanting to know what you view it as. Do you view it as positive for Quebec War? Does this enable you in some way that you were previously not enabled in the market, or is it neutral or potentially negative if there's some way that it can be viewed negatively? I'd be interested in hearing your take on that.

if this helps you in any way.

Well, you know, what I was referring to, I guess that, you know, we've been seeing, you know, competitors trying to reduce their leverage, their ratio with their operational capacity. And we've been seeing them not being able to do it. so you know what we can expect is that you know doing those transactions is actually provide them the capacity of doing so but only with financial engineering not sure that you know this is the right thing to do and it comes with a cost you know there's so much a man can do and you're going to have financial interest much more important in the future, as we've been seeing, in fact, with the numbers recently disclosed by our competitors and which are going completely the opposite of what we're showing. We've been able, you know, to reduce our debt and at the end of the day, certainly, you know, also reducing significantly the amount of interest that we're paying on an absolute basis. So I guess that if you don't need to do this and we're not, I don't think that we need to do it other than to impair our capacity of generating better free cash flows in the future. And this is not precluding us to continue to invest. We are generating enough cash to continue to spend, to continue to pay our dividends, to continue to entertain our share buyback programs.

and to continue also to reduce our debt. Okay, great. Thank you.

Your next question comes from Jerome Dubreuil with Desjardins. Your line is now open.

Thanks for taking my question. First one, I just want to maybe try again on Matthew's question. Basically, is it easier to deploy a network outside of Quebec with TELUS having opened its infrastructure?

Bonjour, Jerome. Thanks.

Well, you know, we should be honest here, eh? As you know, Freedom started in Ontario in And they've been able to grow their customer base strongly there. Alberta and British Columbia, which is the historical footprint of TELUS, as we all know, had been second markets that had been next in line to where Freedoms started. So our penetration there is lower than what it is in Ontario. We always said, and we're looking, and we continue to look forward, you know, to be able to package other telecom services. We've been doing it in Ontario, and we're looking to do it also in Alberta and British Columbia. I need to refer to what I said earlier in my prepared remarks. We don't see, because at this stage, this is the situation, why fiber products pricing is higher in BC and Alberta and they are in Ontario. So this is, you know, what we've been mentioning in front of the CRDC. These are the representation we've been making for a while and we don't see why this is taking place. And again, Why Western Canadians will not going to be able to enjoy a competitive landscape as the one other Canadians are able, you know, to see. So we're going to continue to fight there and we will continue, you know, to improve our positioning and propose additional services on a bundling base.

Okay, thanks. Follow-up for me. Pierre-Cal, you mentioned that things start to move in the right direction in cable. If you can maybe expand a bit on this, is it something in the numbers that were reported today that makes you say that, or maybe things you see in the market or in early Q3? So if you can maybe clarify what you meant by this, maybe in the context that Bell is still aggressive.

Well, you are going to probably talk about it a little bit earlier. Yeah, certainly, you know, I still competitive. Certainly, you know what we're proposing to our customers is a very good product. As you probably know, also, you know, we went on a rental model which was not there previously. So we have the capacity of offering something of great interest for our customers. We obviously, you know, not out of the general trend in North America regarding, you know, cable shaving and cable cutting or cable never. But we will continue to push forward with our product and mentioning that, you know, we are bringing value added with all the French channel that we're able to deliver with our cable product.

Merci. Your next question comes from Vince Valentino.

With GD Cowan, your line is now open.

Hey, thanks very much. First, let's clarify a couple of things. So your post-paid mobile churn is lower than anybody else in the industry, Hugh. So tell us, put up 0.9% this quarter and just your post-paid set of customers would have churn below that?

We are, as we didn't put the number in the results, I'm not going to give it to you now, Vince, but good try. I'll stick to my point, Vince, that, yes, we are, it's come down a lot. We are, you know, quarter after quarter among the lowest. And if you look at postpaid and consolidated, and I think the important point, Vince, is that it's continuing to come down. And it's continuing due to all the things we've talked about. We're keeping our customers longer. And our churn keeps getting better every quarter, which is very encouraging for us. And it proves that we're doing all the right things. And whether we're slightly above or slightly below at these numbers, believe me, it's rounding errors, really, to be honest.

Fair enough. Second, I know you don't want to give us wireless EBITDA anymore because it It comes down to some allocations of shared costs. But directionally speaking, if wireless revenue is up 6%, cable revenue is down 4%, is it fair to assume that cable segment EBITDA was somewhat negative this quarter and all of the EBITDA growth would be attributed to wireless?

Yes, that's correct. Yes, that's fair. Yeah, absolutely.

Okay.

Another clarification a bit on CapEx. Your CapEx remains quite low this quarter, but you're talking about some delivery issues on equipment. But in the release, it sort of suggests you've already done this expansion of cable homes covered in parts of Quebec. You're already well into deploying 3.5 gig spectrum on the mobile network. Is that maybe... overstating it a bit, that maybe those projects are just in the early stages and there's more capex to come, and that's part of the reason why Q2 was a bit lighter?

Yeah.

Yeah, I was going to say, yeah, it is, you know, it has been started. It's not by any means completed, so it's in the works. There are timing issues. I referred in my presentation In my prepared remarks, Vince, to the fact, you know, sometimes you receive equipment or you install equipment a little bit late or a little bit earlier. So, from a CapEx standpoint, there are timing issues from one quarter to the next. And that's why I said that we expect to increase CapEx a little bit towards the latter part of the year. Basically, to answer your question, these programs are well in the works, and the investment continues.

Okay. Pierre-Carl, the last two you can probably want to chime in is the Freedom Home Internet product that you're already marketing. Can you clarify, do you actually use the fiber product? access on the Bell or TELUS networks to do that in any meaningful way right now, or is the vast majority of Freedom Home Internet still on a cable-based broadband network?

Well, thank you, Vince. Unfortunately, I'm not going to give you an answer or able to give you an answer because these things are, as you probably imagine, easily, it's quite, on a competitive basis, it's not something that we will reveal to our competitors, which we use their networks. So sorry about this.

Yeah, okay. I don't fully understand that because anybody you're reselling is going to know if you're doing it, but we can move on. The last one, then, Pierre-Claude, for you is on media. Look, I hear you every quarter, the same message. I fully agree with you for what it's worth. The system... needs to be changed and there's only so much cost cutting you can do and you can't keep ahead of it. But it just doesn't seem like anything's happening. I mean, the CBC being blocked from selling ads or getting, you know, no tax deduction on ads placed on US platforms. They're great things to talk about, but I mean, assuming these don't happen and there's no evidence they are, what's next? I mean, do you have to start shutting down material parts of your media business, like turning down stations and including TVA Sports, perhaps, depending on what rights costs do in the future, or do you just keep trying to cut costs and keep your head above water?

Yeah, well, you know, we will continue to reduce our expenses. Optimization is certainly something that, you know, was not completely completed. So, you know, we will continue to work on this. And, you know, if we have to... to close some specialty channels will do. We are certainly, you know, moving in different directions. The streaming is certainly, you know, as you know, a big business, a big business. It's a business that we should continue to move is the conventional broadcasting will morph in different ways in the future. These things are taking place elsewhere. In fact, you know, we are already moving in this direction by providing more content in our streaming services. Maybe we should intend to go even further in this direction. So there's no final decision. There's no final solution. We will continue to work closely with what we consider being a significant asset to Quebecois.

Thank you. Your next question comes from Stephanie Price with CIBC. Your line is now open.

Thank you. Club Agora launched some new roaming perks in the quarter. Just curious if you could talk a little bit about the uptake so far and maybe more broadly how you're thinking about positioning freedom versus the incumbents as you head into back to school, as you noted, just given the price stabilization in the market.

I think you'll take this one.

Yeah, the roaming is, the reception has been really, you know, has been really good. As you've seen, as you're mentioning, you know, we're offering different, you know, different packages. You know, how's the uptick? I mean, we, you know, more people, more people. are taking advantage of this. And, you know, we're quite, I think our position would be we're quite satisfied and we're quite encouraged by the, what I would call the reception to these things. Was that your question? I just want to make sure I answer your question.

Yeah, no, that was the question. I was also just asking more about how you think about back to school in a period of pricing stabilization, just in terms of the perks you could be offering. And then I think mobile equipment sales were also up a little bit year over year. Just curious how you think about device financing heading into back to school as well.

Well, with back to school, as we've said, we're not going to draw for his blood. We're not going to be more... more competitive or more aggressive. That being said, we'll say this again, if competition decides to take this somewhat stable environment and be more competitive, then we believe we have all the right ammunition to respond. And we will respond because we feel confident that we still need to be competitive and to have some price advantage. And I would add that more than price, we have other things such as, you know, our data packages and the richness of our plans that we referred to in our remarks is also a competitive advantage that we'll continue to use. And our differentiation, you know, we're often the first one to come up with different packages, different plans to where we add things, and that continues to work well for us. That being said, it's being pointed out to me that as we're speaking, FIDO is already starting to, we're seeing a $35 package that's just out there, so... You know, this is real-time market intelligence for you, Stephanie.

Great. Thank you. Maybe just one more from me. In terms of wireline in Quebec, obviously Bell remains very competitive. But just curious if you're seeing any impact from other incumbents as they use GPIA in Quebec or fixed wireless.

Yeah, Rogers has stepped up their level of, I wouldn't call it aggression. I think the word is too strong. But they certainly have moved up the intensity, I would say. So TPIA, fixed wireless, is out there. It's not... As we've said before, and I don't think it's changed materially from what we've said before in the sense that it is not a considerable threat, I would say at this point, but I think it would be imprudent on our part to say that it will not become at some point perhaps a more material threat.

Thank you.

And that being said, yes, of course, we always don't forget that, you know, any material threat for us becomes an even larger opportunity for us outside of Quebec, obviously, since we have capacity in our network and can obviously take advantage of a fixed wireless outside of Quebec.

Thanks for the call. Your next question comes from David McFadden with Cormark. Your line is now open.

All right, yeah, a couple of questions. So just looking at the service revenue growth and the wireless side, you know, as you pointed out, it's up nicely in the quarter, definitely a big improvement. I guess most of that is really being driven by a lower ARPU decline, right? I mean, that's why obviously the net ads as well, but it seems like the wireless ARPU decline is really helping. So given that, I'm just wondering, what would your priority be? Would it be net ads or achieving stable to growing ARPU?

Well, David, it's both, right?

I mean, you know, we are helped by net ads. We were in an expansion mode, as you know, and we will continue to expand. to favor picking up market share, continuing to pick up market share. We're nowhere near where we want to be. I think there's a lot of opportunity and runway ahead of us in terms of net ads and market share. But obviously pricing is also contributing now that we've talked about in response to an earlier question with most of the repricing being behind us. And now having turned that, that corner, so to speak. I think that certainly should become, should the context and the environment remain stable, it should become an even bigger contributor to our service revenues growing. And so we're quite encouraged by that.

Okay. So if you look at your... WirelessNet adds, just wondering how the performance is in Quebec, say, and then outside of Quebec and Ontario, maybe Western Canada. Can you give us any sort of indications as to relative performance in the various regions?

All regions are performing well, David, to be honest. Freedom continues to perform better and better. outside of Quebec. And in Quebec, that balance that we've put in place quite some time ago between Fizz and Videotron continues to work very well. It depends on the quarter or on the time of year where sometimes Fizz performs a little better and sometimes Videotron performs a little better. But I think at the end of the day, the importance is that we maintain an optimal positioning of our two brands to make sure that we're as efficient as possible.

Okay. And then lastly, so you indicated maybe a little higher CapEx. Can you just update us on what your CapEx expectations are for this year?

Oh, it's the same. What I was saying, David, is that we expect to be on – on guidance for CAPEX for the year, despite the fact that we've been a little bit lower this quarter. But as I said, this is mostly due to the timing of investments and programs and the execution of projects. So we should be, you know, by the end of the year, we should be in line with our forecast.

Okay. All right. Thank you.

And our last question comes from Drew McReynolds with RBC. Your line is now open.

Yeah, thanks very much. Good morning. Hugh, just to follow up on your comments on wireless ARPU and getting closer to neutral, assuming the price discipline continues in the back half. In terms of taking price out and just looking at your loading mix and hearing You know, your answer to David's question, it seems like that mix is much less ARPU dilutive, obviously with kind of Fizz launched in market for a while. And of course, you alluded to Freedom at 39 being accreted to ARPU. So just wondering kind of your mix headwind with respect to ARPU, how that's evolved and what do you expect, you know, through the next year?

Well, you know, it's hard to answer.

If it continues, if current conditions continue, you know, what we've said remains true. I mean, at Freedom, $39 is accretive. So are we going to stay at that entry level or not towards the end of the year? So, you know, it's hard for us to... to give you more, you know, more guidance on this as we don't operate in a vacuum in this, obviously, competition. And we are entering the most competitive or historically the most competitive part of the year, you know, so difficult for us to see. That being said, and I'll repeat it, what's encouraging is that the repricing is behind us and we are seeing that our competitors are increasingly, how would I say, not understanding, because they've always understood it, but are increasingly reacting to that repricing phenomenon and seem to be taking a more disciplined approach, which, as Pierre-Calais said already, we intend to maintain unless somebody goes A little crazier, and hopefully the FIDO example I was referring to is a short term or a one off, but we'll just have to think.

And, Hugh, on that, if you take just back to school promotional activity and not to belittle, you know, you flagging FIDO this morning, but more broadly, you talked about repositioning Freedom, not as, you know, the discount brand, but more I guess more premium or skewing better than kind of the discount positioning. And presumably that, you know, is really driven by just all the investment you're putting behind it. So, you know, is there a propensity for you to rise above 39 bucks and kind of begin to price it less as a discount brand and more as a premium brand?

Well, that's a dangerous question, eh? What to say?

I mean, this is, yes, it's been our plan. It would be repeating the obvious, Drew, to say that, yes, when we bought, we had a lot to do. And we said we first have to, our first priority is to make sure we keep improving the network, keep addressing the pain points of our clients and potential clients. and improve performance, improve client experience, et cetera, et cetera, improve the richness of our plans, et cetera, et cetera. And as we are doing that over time, it is our intent to move freedom up markets, so to speak. That being said, It takes time to do that. So as we've said many times, it's one thing to do all the right things. It's quite another one to change that perception. And that can only be affected over time. And we still have a lot. I mean, we're still a lot of opportunity ahead of us. We're still far from what we ultimately want to be. But you know what? Rome wasn't built in one day, as we say. Right. We've been at this for just two years, you know, so I think we're doing pretty well. Just churn, as we've said many times, is now one of the lowest of the industry and still coming down. So I think we're all doing the right things. And now let's, you know, I think you should give us a little time.

Yeah, no, listen, I understand.

You know, maybe just add, Drew, that... You know, we look at, you know, what we've been doing in the wireless. Never forget that, you know, we're not an incumbent. We were one of the only new wireless operators. We built from scratch, you know, starting from zero customers to, you know, a significant portion of the market in Quebec. And we intend, you know, to do the same with Freedom. We did start from scratch, but we certainly have all the assets available and the expertise to make Freedom the big success that we've been able to enjoy with Videotron and Fizz in Quebec.

Yeah, yeah. No, thanks, Pierre-Claude. Yeah, okay. In my last one here, if I could just squeeze it in, On the internet net ad front, I think Q2 is still a moving season dynamic. I'm not sure whether that's a thing, how you report internet ads, and whether there's the Q3 rebound. But can you just maybe talk to that dynamic, but as well, the 350,000 footprint expansion? I'm assuming... this isn't just kind of turned on here. Um, just wondering how to put that into context with respect to how internet net ads and penetration kind of trend going forward.

Um, so on the moving season, yeah, that, that is still, uh, that is still happening, uh, and, and still has, I, I know we didn't specifically point to it this year. Um, but, um, it, it is still the case that, uh, in a bit of an odd situation. In Quebec, there is a large proportion of moves that happen on the 1st of July. So, yes, there should be this year again a little bit of a rebound in Q3, as we've said in the past. That being said, over time, it's probably fair to say that it's becoming less of a factor than you're still right about that. On the 350,000 new potential homes, this adds to our opportunity going forward and should. Yes, are we encouraged and are we confident that we can Continue to grow internet subs? Yes, by all means. And I think we are investing in the network in terms of performance, in terms of reliability, to make sure that we keep providing the best-in-class experience. and that we can turn the tide a little bit on both cable and, well, not turn the tide on cable, but turn the tide on global wireline net ads to favor renewed growth in internet.

Okay, thanks very much. Okay, well, thank you.

Thank you for all of you. Again, appreciate this meeting and wish you a nice summer ending. Talk to you at the Q3 conference call. Thanks.

Ladies and gentlemen, this concludes the Quebec Corps Inc. financial results for the second quarter 2025 conference call. Thank you for your participation. Have a nice day.