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Edited Transcript of CGO.TO earnings conference call or presentation 31-Oct-19 3:00pm GMT

Q4 2019 Cogeco Inc & Cogeco Communications Inc Earnings Call

Montreal Nov 7, 2019 (Thomson StreetEvents) -- Edited Transcript of COGECO Inc earnings conference call or presentation Thursday, October 31, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Patrice Ouimet

Cogeco Communications Inc. - CFO & Senior VP

* Philippe Jetté

Cogeco Inc. - President, CEO & Director

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Conference Call Participants

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* Drew McReynolds

RBC Capital Markets, Research Division - Analyst

* Jeffrey Fan

Scotiabank Global Banking and Markets, Research Division - Director of Telecommunication Services & Canadian & U.S. Telecom and Cable Equity Research Analyst

* Maher Yaghi

Desjardins Securities Inc., Research Division - VP, Telecom, Media & Tech Analyst and Intellectual Property Analyst

* Matthew Griffiths

BofA Merrill Lynch, Research Division - Associate

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Presentation

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Operator [1]

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Good day and welcome to the Cogeco Inc. and Cogeco Communications Inc. Fourth Quarter 2019 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Patrice Ouimet, Senior Vice President and Chief Financial Officer of Cogeco Inc. and Cogeco Communications Inc. Please go ahead, Mr. Ouimet.

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [2]

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Good morning, everybody, and welcome to our fourth quarter earnings call. Joining me today are Philippe Jetté, Marie-Hélène Labrie, Pierre Maheux and Philippe Bonin. So before we begin this call, as usual, I would like to remind listeners that the call is subject to forward-looking statements, which can be found in our press releases issued yesterday.

And I'll turn the call over to Philippe Jetté.

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Philippe Jetté, Cogeco Inc. - President, CEO & Director [3]

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Merci, Patrice, and good morning, ladies, gentlemen and shareholders of Cogeco Communications and Cogeco Inc., and thank you for joining us to discuss the results of our fourth quarter and fiscal year ending August 31, 2019. Let us begin with the key accomplishments, which have been transformative, and our strategic vision for the future.

We have reached several key milestones, which generated strong shareholder value and position Cogeco well for the future. We completed the stabilization of our new customer management system at Cogeco Connexion early in the year, and absolute to leverage its capabilities to further improve the quality of the customer experience and to enhance our local marketing strategies through targeted offers that meet customer profiles and segments.

We continued our transformation journey with more digital services and the digital initiatives and the implementation of the new CMS have enabled an operational optimization program at Cogeco Connexion in the first half of the fiscal year, which generated about $10 million in cost savings in fiscal 2019 and $14 million on an annual run rate basis.

At Atlantic Broadband, we generated an EBITDA growth of 6% in '19 and strong customer growth in the second half of the fiscal year as we secured several large bulk contracts in Florida and better managed seasonal customers.

We made sound capital allocation choices with our decision to sell Cogeco Peer 1 at an attractive price and launching a share repurchase program. The sale of Cogeco Peer 1 allowed the organization to refocus on its core broadband services business and provides greater flexibility to pursue organic investment and acquisition opportunities. We remain very optimistic on wireless as the [CRTC's] public hearings on the future of mobile, and specifically, the provision of mandated wholesale access will soon begin in February 2020.

ISED has also issued a decision in July, creating Tier 5 service areas, which could be used in future spectrum license auctions. This would allow Cogeco to be more focused and use its capital efficiently if participates in future auctions.

Cogeco believes that the hybrid mobile network operator model, or HMNO, if submitted to the CRTC, should meet the government's policy objectives of increasing competition, while safeguarding investments in telecommunication networks and promoting innovation.

With changes to the leadership team during the year, we refined our strategic priorities, which are to deliver an exceptional customer experience through continuous innovation of our service offering; grow our footprint and obtain our fair share of the market in current segments; optimize our cost structure with group synergies and operational effectiveness with a highly collaborative culture; leverage our leadership and digital technologies in client relationship management; continue building a strong brand; and creating an exceptional employee experience to enable all this.

Speaking of changes to the leadership team, we just announced the appointment of Frank van der Post to the position of President of Atlantic Broadband effective next Monday, November 4. Frank's strong strategic marketing knowledge and track record of successfully delivering results, particularly in industries that are highly customer-focused, make him an ideal candidate to take the leadership role at Atlantic Broadband. He will bring a strong customer experience focus as ABB amplifies its marketing activities and reinforces its brand. Mr. van der Post joined Atlantic Broadband from KPN, a Dutch multiservice telecommunications operator with more than 7 million customers in the residential and enterprise markets, where he serves as Chief Commercial Officer from 2015 to 2018. Before joining the telecom company, Mr. van der Post spent several years in the airline and hospitality industries, having held senior leadership role for top organization, including British Airways and InterContinental Hotels, where he worked more than 15 years in the United States.

We also have just initiated a brand refresh across the company. Cogeco Connexion and Atlantic Broadband will gradually launch their campaigns using their new visual platforms over the next few months. The brand refresh is centered on the customer, the people and the human touch. It reinforces the notions that at the heart of our mission, the accessibility and proximity with our customers and communities as well as our focus on customer service and trust. The new visual platform is also modern and dynamic.

Let's move to consolidated financial results. Note that the results from continuing operations exclude Cogeco Peer 1's result, and all growth figures are expressed in constant currencies.

Reported annual revenue reached $2.33 billion, representing an increase of 6.8%. EBITDA has reached $1.1 billion, rising 8.5% and generating an industry-leading margins of 47.5%. Superior EBITDA growth was achieved mainly by the additional 4 months contribution of -- from MetroCast but also mid-single-digit organic growth at ABB and low single-digit growth at CCX, as expected.

For the quarter, revenue is up 2.7% and EBITDA up 4.3% when compared to the same period last year. Reported revenue reached $583.7 million and EBITDA, $275.6 million, generating a margin of $47.2 million. Cogeco Connexion achieved an EBITDA growth of 3.6%. Customer trends are now back to normal and have significantly improved compared to last year.

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was in line with last quarter and reflects higher marketing expense in the second half of the fiscal year. More activation of bulk properties in Florida and increased marketing spending have paid off as primary service unit net addition of 7,431 have once again more than doubled in the quarter compared to last year. The quarterly dividend has been increased from $0.525 to $0.58 per share, representing a 10.5% over -- increase over last year.

Let's now look at the individual components. At Cogeco Connexion, our PSU trends continue to improve, thanks to the ramp-up of marketing and sales efforts. Cogeco Connexion's revenue remained essentially the same compared to last year's quarter, mainly as a result of rate increase offset by trailing impact of declines in residential video and telephony customers in Q4 2018 and Q1 2019, the period where we transitioned to our new CMS.

Commercial services revenue growth continued to be strong at 6% and represents 10% of Cogeco Connexion's revenue. As customer trends have stabilized, we expect overall low single-digit revenue growth at Cogeco Connexion for fiscal 2020.

Cogeco Connexion's EBITDA has grown by 3.6% in the quarter, mostly as a result of lower workforce expense resulting from an operational optimization program in the first half of fiscal 2019. There is room for further margin improvement as we pursue our digital transformation. In the last year, we have introduced a new self-installation option for our phone product, enhanced our cogeco.ca website as well as provided new self-serve functionalities.

Among other initiatives pursued in fiscal 2019, eBilling has increased by 85%, and PSU additions through online channels have increased 50%. Our evolution towards Internet Protocol Television, or IPTV, which will provide highly customizable video content, a voice-activated control, wireless-enabled equipment and more, is underway with prelaunch preparation. Our MediaFirst IPTV platform is expected to be progressively launched at the beginning of calendar year 2020, with plan availability to most of the footprint in the first half of the year. MediaFirst will then become the new standard video experience for new customer activation.

During fiscal 2019, we have focused on leveraging our superior Internet speeds and expanded our gigabit offering to reach about 60% of our footprint. To provide enhanced value for our customers, we have again increased Internet speeds in October with no changes in pricing. On August 15, the CRTC issued its costing decision to set final rates for aggregated-to-wholesale Internet services for resellers, significantly lowering the interim rates that's previously fixed in 2016 and applying the new rates on a retroactive basis. On September 13, Cogeco Communication, along with other telecommunication service providers, jointly filed an application relief to appeal to the CRTC order to the Federal Court of Appeal. 2 weeks later, the FCA granted an entrance stay, with the result for the time being of not having to implement the new rates nor to make the retroactive payments estimated at $25 million for the corporation as of August 31, 2019. The corporation has therefore not recorded the impact of the new reduced rate in 2019 financial statements.

Atlantic Broadband's revenue and EBITDA have increased by 6% and 4.1%, respectively, mainly due to organic growth in upsizing residential Internet and commercial services, rate increases and the ramp-up of our Florida expansion plan. In fiscal 2020, we expect mid-single-digit revenue and EBITDA growth. While we expect revenue growth to be fairly consistent throughout the year, we expect EBITDA growth to be lower in the first half of the fiscal year and to pick up in the second half, mainly due to the timing of various sales and marketing initiatives that were launched this fall.

We will increase marketing spend in fiscal 2020, launching Atlantic Broadband's omnichannel marketing, designed to build increased awareness among residential and business prospects, and for existing customers with traditional, digital and social platforms.

Market-specific initiatives and customer segmentation are being further developed to optimize campaigns and elevate response rates. The impact of increased marketing spend should be partly offset by delivering more services to digital platforms. A new online shopping cart was launched in September 2019 through a service gateway, which allow customers to select new services, modify existing ones and schedule an installation appointment without the need for agent assistance. This service has been integrated in our online account management portal, which also allow customers to view account information, make bill payments, request help and troubleshoot equipment, and more.

Meanwhile, the implementation of a new workforce management platform, which also leverage various digital tools, will improve customer communication as well as operational efficiency and productivity.

The PSU trends in Q4 were strong, largely due to activation of bulk properties in Florida but also due to the general traction gained from increased sales and marketing efforts. In F '20, we continue to extend our network in Florida and focus on securing more long-term bulk contracts. Atlantic Broadband has achieved its goal of offering 1-gig Internet services in over 90% of its footprint and will continue to expand the service where there is sufficient demand.

During the fiscal year, ABB also introduced major video enhancement through its TiVo platform, providing ease of use for customers. The enhancements included the expansion of voice control, the launch of Amazon Alexa functionality, the launch of a new mobile app for multiscreen viewing and the migration to IP Video on-Demand.

Let us now take a look at Cogeco Inc. In the fourth quarter, consolidated revenue increased 2.7%, and EBITDA, 4.1%. Despite the challenges presented by the advertising market for some time, the Cogeco Media team has worked hard to ensure ratings remain strong at our radio stations. We have completed the integration of the 10 new radio stations acquired last November, and our key Montreal stations have continued to benefit from high ratings during the quarter.

We have been managing our costs tightly in the media sector in order to ensure that we continue generating attractive free cash flows from the business. To maintain our strong market share, many stations have also recently enriched their programming. In addition, as we continue to increase our presence in the digital world, the Cogeco Media team launched a mobile application, providing listeners with access to its top-rated content. At Cogeco Inc., the quarterly dividend has been increased from $0.43 to $0.475 per share, a 10.5% increase over last year.

We are maintaining our fiscal 2020 financial guidance at the levels disclosed in July. On a constant currency and consolidated basis, Cogeco Communications Inc. expect fiscal 2020 revenue to grow between 2% and 4%, and adjusted EBITDA between 2.5% and 4.5%. In fiscal 2020, the capital intensity ratio is expected to be slightly higher than fiscal '19, but is still expected to remain below the 20% level. Higher capital expenditures are expected at ABB due to the continued Florida network expansion and additional investment in our network infrastructure. Stable capital expenditures are expected at Cogeco Connexion.

Free cash flow, on a constant currency basis, should grow by 5% to 11%, mainly as a result of increasing EBITDA and declining financial expenses.

As you can see, 2020 looks very promising as we will continue to pursue profitable organic growth through providing enhanced services to our customers; growing our Internet and commercial services market shares; expanding in selected areas, such as Florida; and preparing a disciplined entry in the mobile market. We continue to look for attractive acquisition opportunities and are proactively engaged in the Canadian wireless regulatory consultations.

And now Patrice and I will be happy to answer your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Jeff Fan from Scotiabank.

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Jeffrey Fan, Scotiabank Global Banking and Markets, Research Division - Director of Telecommunication Services & Canadian & U.S. Telecom and Cable Equity Research Analyst [2]

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Just start with the U.S. broadband PSUs. The loading this quarter was a little bit lighter than last year with -- even though you saw some increase in some of your bulk contracts. Can you talk a little bit about that and whether this is related to timing? Or how should we think about the unit growth? And maybe if you can just give us a little bit of color in terms of the gross loading or churn within that particular segment?

And then second question is just on the margins. I guess based on your guidance, it looks like you are expecting some margin improvement in 2020. It does sound like that Canada is going to go through some improvement and maybe U.S. because of some of the higher costs, maybe going the other way. But maybe you can just help us clarify that and how we should think about the segmented margins.

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [3]

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Sure. So on the PSUs in the U.S., actually -- so we had discussed on the last call that we're expecting in the fourth quarter to have some larger properties in Florida being added on, so that did happen. So that basically pushed the video customers significantly higher, so it was due to this. Normally, if you look at the last few years in this quarter, we have a small loss of video customers, but it was a plus this time. Going forward for video, you should expect -- you should not expect in the coming quarters larger bumps, like you've seen in this quarter. And in Q3, as we've discussed previously as well, we have the seasonal reconnects. We do expect going forward that we'll have a bit less seasonal effects in the numbers. That being said, if you're referring to some softness in Q4 versus last year, you're probably referring to Internet-only or the Internet PSUs. They were a little softer than last year. And I would say normally, we would expect something a little higher than what we had in Q4, but those are not major changes, and that would be true for phone as well. So I'll move onto margin, if that answers your question.

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Jeffrey Fan, Scotiabank Global Banking and Markets, Research Division - Director of Telecommunication Services & Canadian & U.S. Telecom and Cable Equity Research Analyst [4]

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Yes. I guess just to quickly follow up. I mean is there -- what was the quarter's weakness related to? Was it gross sales? Or was there something related to churn? Just trying to maybe help us out there.

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [5]

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It's -- I wouldn't point to anything particular. And again, the changes are not that much actually. The additions in -- if you look at Internet, PSUs were higher than what they were in 2 years ago, and they were probably a bit lower than 3 years ago. So I mean from year-to-year, the variations are not major, just a few thousands up or down. So it's always a mix of some customers that churn and some level of acquisitions. We're trying to always manage also the net ARPUs, the margins, to make sure that we are not just adding PSUs, but we're adding good PSUs and profitable PSUs. So nothing in particular to add there.

On the margins, we do expect a small increase actually in both countries next year. It's a mix of different things. So we have -- obviously, we manage our costs. Philippe was referring to the number of digitization projects we have on the go, so that does help in cost. As we grow the top line as well, obviously, the -- we're generally able to manage this, especially in the U.S. and have the top line growing faster than -- sorry, it's a larger base, so we're able to grow the EBITDA faster than the top line. But I would not expect a major change in the coming year, but a slight increase in both countries.

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Operator [6]

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Your next question comes from the line of Maher Yaghi from Desjardins.

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Maher Yaghi, Desjardins Securities Inc., Research Division - VP, Telecom, Media & Tech Analyst and Intellectual Property Analyst [7]

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Just first start with your guidance. And I'm trying to figure out what separates or what differentiates your cable assets from those of, let's say, Shaw, Rogers, even BCE and Telus, where they all had a positive boost as they switch to IFRS 16. So Patrice, I'm trying to figure out these companies, even though they have wireless operations, they did benefit on their wireline business from the switch to IFRS 16. In your MD&A, you mentioned that you don't expect to see a material increase in your EBITDA or other metrics related to the switch to IFRS 16. I'm trying to figure out why is this the case.

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [8]

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Okay. So the -- we said it would not be material. So it's about $6 million, that's what we expect be the increase in EBITDA next year. It's a mix of CCX and ABB. So it is lower definitely than what you've seen with other players. The main reason is because of wireless, so it has to do with leases. So a wireline company like we are typically operates less stores than a wireless company. And when a wireless company does wireline as well, I would presume that the portion of the leases are attributed to wireline. So we're -- again, if you only operate wireline, you will make a choice to have less stores. It's not necessary to carry those stores. That's probably one of the reasons I would not be able to tell you necessarily what was done in details at the other companies, but that would be my thinking. And the other thing would be also, obviously, if the call centers are located in leased area versus owned buildings, that makes a difference. We own real estate. I would say the bulk of our employees are in owned real estate, so that probably plays into it as well.

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Maher Yaghi, Desjardins Securities Inc., Research Division - VP, Telecom, Media & Tech Analyst and Intellectual Property Analyst [9]

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Will you be providing, as the year progresses, the actual split of IFRS -- non-IFRS 16 versus IFRS 16 so that we can track that differential accounting method that you're doing?

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [10]

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Well, given it's only $6 million for the whole company, I don't think we're going to be doing it. It's really immaterial in a quarterly basis. But if there were a change in our estimate going forward, a material one, then we would highlight it if we, for some reason, were wrong in our estimate. But it's really not a material number at this point.

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Maher Yaghi, Desjardins Securities Inc., Research Division - VP, Telecom, Media & Tech Analyst and Intellectual Property Analyst [11]

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Okay. The only reason I'm asking is that if I take a company like Shaw, they had a $155 million impact, and they say 55% of it is wireline, even though they segregate all their wireless stores to the Freedom brand. It's simply hard to put any kind of retail stores on the wireline business in terms of leasing -- lease accounting. So there's still a significant gap. Is there a different accounting that you're doing for attachment polls and things like that, that might make a difference?

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [12]

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It's possible. I -- you would have to ask the other companies, but I -- we did see the report that came out, and that appeared to be the one that was different, especially for wireline. I think the other ones were much smaller on a wireline piece. So it is possible. Within the rule, there are certain types of leases, like infrastructure or pole attachments, that could be treated depending on what the company chooses and treatment could be going one way or the other. So that could be a reason for this particular question. You would need to (inaudible).

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Maher Yaghi, Desjardins Securities Inc., Research Division - VP, Telecom, Media & Tech Analyst and Intellectual Property Analyst [13]

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Okay. We'll do that for sure. So in terms of your U.S. operations, definitely, your leverage is declining on the core -- on the CCA Corp. side. Can you tell us, maybe update us on the leverage of your U.S. business itself, ABB? And where do you see the reduction in the leverage? Where do you see it going before you become more aggressive in terms of pursuing M&A?

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [14]

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Yes. So I'll get back to you with the number at ABB, but it's sub-5. It's probably 4.5x EBITDA approximately. I would need to calculate it, but it's in that area. It has come down since we made the acquisition of MetroCast as we were close to, I think 5.4x EBITDA. We have ample capacity right now to be able to make acquisitions in the U.S. because we have -- we basically have facilities that are available right now, and we actually have cash on the balance sheet. So and it would be very easy for us to grow, basically our leverage in the U.S. if we wanted to. So this is not really a gating item for us. We are always actively looking at additional acquisitions in the U.S., and there could be substantial amounts we could put on a structure there. If ever we needed to, we could also contribute additional equity from the Canadian entity into the U.S. entity if it were for a bigger acquisition. And we have basically tapped out the leverage capacity in the U.S. And I'm confirming now that it's actually 4.5x is what we have in the U.S.

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Maher Yaghi, Desjardins Securities Inc., Research Division - VP, Telecom, Media & Tech Analyst and Intellectual Property Analyst [15]

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Great. Okay. And when it comes to your U.S. cable operation, you are -- you mentioned a few times the -- your interest in deploying -- or offering wireless if an opportunity presents itself. But are there other opportunities in the Canadian business to expand into segments that you're currently not in, in rural areas, for example, or things like that?

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Philippe Jetté, Cogeco Inc. - President, CEO & Director [16]

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Maher, it's Philippe. In the U.S., our top priority, #1 priority right now, will remain on looking for acquisition and expanding our footprint. When we will deploy a wireless on the Canadian side, we will build it in such a way that it will benefit the ABB U.S. operation entity. But that's future. So we have to stay focused on growing the footprint, U.S. acquisition in the U.S., while we sort out the Canadian wireless future, build the platform and eventually look for synergies. It will be in that playbook.

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Operator [17]

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Your next question comes from the line of Matthew Griffiths from Bank of America.

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Matthew Griffiths, BofA Merrill Lynch, Research Division - Associate [18]

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I just wanted to stay with the U.S. expansion for a second, if I could. You have a lot of experience now operating in the U.S. across diverse markets, up and down the East Coast. I was wondering if after these years of operating, you've kind of narrowed your focus at all in terms of where you would want to expand or what segments you want to expand into. I'm thinking about how Florida always seems to be at the forefront of conversations of growth in the U.S., and wondering what your thoughts are there? And just separately, kind of more detailed. On the bulk activations in Florida, you just mentioned video. Is there no broadband associated with the bulk activations? Or is that kind of a future opportunity to go into? Or does it depend on the contract? I just -- any kind of insight would be helpful in helping to understand that.

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [19]

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Sure. So in terms of acquisitions, we're actually looking throughout the U.S., so we don't have any particular region that we're limiting ourselves to. To the extent, if it were a very small acquisition, then it would have to be very close to where we operate. But larger ones would -- could be anywhere in the U.S. So we have -- our operation is managed from an area very near Boston. And then we have regions that are controlling basically all the -- we're in 11 states, so we have regions that are controlling different states. So we could add another region in the future if we wanted to.

In terms of the bulk activations, so the way it works is when you sign up a tower or a gated community, you can have only video, you can have only Internet, you can have the 2 of them, or sometimes even the phone. And what happens, so a large one we signed up was video-only, and what happens is then we sell Internet and phone and other products directly to the consumer. But it doesn't happen in 1 quarter. Typically, it takes a bit of time to -- especially in Florida as people are not always there physically in the summer. So it takes a bit of time to sign up the additional services.

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Operator [20]

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(Operator Instructions) Your next question comes from the line of Drew McReynolds from RBC.

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Drew McReynolds, RBC Capital Markets, Research Division - Analyst [21]

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Two questions. First on the TV business. I think Cogeco has a pretty good glimpse of cord-cutting and cord-cutting rates across Ontario versus Québec, and then you have got a good lens into the U.S. So maybe just an update on what you're seeing on the TV cord-cutting side? And then secondly, for you, Philippe, on the hybrid MNO model, certainly our perspective, and we've wrote on this, has been that it seems to be a really reasonable solution out there for a lot of boxes that need to be ticked by different stakeholders. Your tone seems a little bit more positive today than what I've heard in the past. Wondering if you're at all able to give us an update on are there any conversations you've had with the government or the CRTC. And then as a follow-up to that, are you -- as you had alluded to, I think in your submission against a pure reseller, pure MVNO model? Or is that something if you don't get a hybrid that you'd still be interested in pursuing?

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Philippe Jetté, Cogeco Inc. - President, CEO & Director [22]

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Okay. Well, thanks, Drew. Let me start with your first question on the cord-cutting. Personally, I find that this term has been abused too much by analysts in the marketplace. What customers are looking for is complementing different services altogether, so they are looking for content. Some of it is available on linear systems, other are available at the time you want to watch on either pay-per-view or subscribed VOD or VOD. But also with the OTT platforms, now you have even more choice coming. And this is where Cogeco focuses. We're developing platforms, where Netflix, where YouTube, where linear, where VOD and subscribed VOD, all these different sources of content are all integrated in a very simply -- simple-to-use interface. So through your remote, you have access to the different sources. And I think that's the power of aggregation, and that's how we please our customers. So it's not about cutting anything, it's about adding different sources of content through the same platform. That's really how we see it.

Now for your second question on a hybrid MNO model, I would -- given your question, I think you already understood what we're proposing, what we've put in front of the CRTC. That process has started a couple of months ago now. If you picked up anything in my tone, I think it's only because the public hearings are finally coming. They've been delayed a little bit because the competition bureau needed more times to actually compute data on additional region or regional views, as I understand it. So now the audience are in February. We're very excited to participate. I think we have a very good model, good proposal that will actually serve in maintaining the network investments in the industry, promoting innovation as well as increasing competition. So I think we are striking all the angles the government and the CRTC is looking for. And again, my tone must be simply be different because I'm excited for these upcoming audience that are close.

And as for the resellers, we've -- we were always clear. We don't see, in any markets, wireline, wireless or other markets, resellers and rebillers that are -- that do not intend to invest in ecosystem as benefiting the ecosystem. So if you want to be part of an ecosystem, you have to eventually invest. To our views, it's okay to use some wholesale access to others to start, but this has to also have an end. So promoting competition is one thing, but riding on others forever is a very different thing, and we're not for that, neither the -- for rebillers or simply resellers that would stay there. So the latter of investment is key. But at the same time, you have to let new players enter the system for investments. I hope it answers the 3 questions.

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Operator [23]

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There are no further questions at this time. Mr. Ouimet, I turn the call back over to you.

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Patrice Ouimet, Cogeco Communications Inc. - CFO & Senior VP [24]

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Okay. Well, thank you, everyone, and we're going to be back in January with our next results. So free to call us in the meantime if you have any questions. Thank you.

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Philippe Jetté, Cogeco Inc. - President, CEO & Director [25]

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Thank you.

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Operator [26]

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Ladies and gentlemen, this concludes today's conference call. You may now disconnect.