BCE Inc. (BCE) Earnings Call Transcript & Summary

Great. Thanks, everyone, for joining. I'm Batya Levi from the communications team at UBS. And our next speaker is Mirko Bibic, President and CEO of BCE. Thank you so much for being with us.

Good morning, Batya.

Michael, I thought that we would maybe start with kind of setting up your main -- talking about your main priorities as we head into next year?

Great. Thank you. So actually, there's nothing -- there are no secrets here in terms of our priorities. We had an Investor Day in October, and we laid out what we plan to do over the next 3 years from '26 all the way through '28. And if I can summarize it in a nutshell, clearly, we spent 2025 really focused on strengthening the balance sheet. So strengthen the balance sheet that came with a dividend reset. We're really hyper focused on deleveraging and driving sustainable free cash flow growth and optimizing the cost of capital. So broadly speaking, from a capital markets perspective, the goal is to deliver total shareholder return. At the same time, as we kind of strengthen the balance sheet with all those elements, we have basically redesigned the growth platform for BCE for the years ahead. So a completely different company with a new momentum and a lot of energy, and we're hyper focused on 4 key priorities, which is putting the customer first, but which everyone does say, but really leaning into it and delivering, and you're going to see it in things like churn improvement. So really walking the talk on that, building the -- delivering the best fiber and wireless networks would be the second. The third is leading an enterprise with AI-powered solutions. We have such a strong enterprise platform in Canada that has been underappreciated, and we haven't talked about it enough, and it's poised for growth, which is super exciting. And the fourth priority is building a digital media and content powerhouse and a word on that. We have owned Bell Media for many, many, many years. It was a traditional broadcaster, the largest broadcaster in Canada. And since 2020, we've been hard at work repositioning Bell Media to be from a traditional broadcaster to a digital media and content player. So everything we think about is digital. And we've now turned that asset around where it's expected to deliver positive revenue and EBITDA growth year after year. So those are the 4 priorities. So it's strengthening the balance sheet, the capital market strategy I talked about, and it's hyper focused on those 4 core priorities and making sure we fund that growth.

Okay. Great. So let's dig in those segments. Maybe starting with the wireless. A few years ago, we saw some heightened competitive intensity. In the U.S., the carriers used to say, let's look up north and it was like implement that more rational competitive environment, and it went the other way. But now there seems to be a little bit more emphasis on still competitive, obviously, but maybe a bit more rationality. How would you characterize maybe just recent trends? Are we right that we're seeing a little bit better promotional environment in Canada?

So I think -- well, the answer to that is yes, and let me back up. I love the way you put the question, which was in the past, carriers, investors in the U.S. would look up north. And we -- the Canadian wireless industry for years and years is always a great place to invest. There was some turbulence in the past 2, 3 years with the entry of a fourth national player. I'd say we're back. We're on the verge of being back. So I would kind of lean in and say, look at Canada again in wireless because it's going to be a good place to invest again. And why do I say that? And we've been signaling since, I would say, mid-Q2 of this year that we were starting to see some positive momentum in the wireless industry. And if we just take the recent past, the recent few weeks as you mentioned Black Friday as a proof point. If you compare Black Friday in Canada in wireless this year to last year, kind of the promotion started later. They ended earlier. And the rate of cash discounting was significantly better this year and pricing has been higher this year compared to last year as well on kind of the monthly service charge and all while delivering -- continuing to deliver significant value to subscribers, which I think is a very important point. And then within that context, you've got Bell Mobility, and we've got -- we've got tremendous upside. We have done an amazing job reducing our churn. We were -- we had the highest churn, and we're working really hard at reducing it. And you can see quarter after quarter, our churn is improving. Our product intensity is increasing. So the number of bundled households we have, and we've really been hyper focused on getting customers on the Bell brand, which is the premium brand where we bundle customers. So there's a more higher lifetime value on the Bell brand. So from a macro perspective, a lot better and our performance has been good, and it's going to continue to be good.

That's good to hear. In terms of maybe one macro dynamic is slower integration, slower subscriber growth. Are we starting to lap that where you see maybe more stable trends going forward?

So I think that is the good news. If you compare the back half of 2024 and certainly the entirety of 2025 in terms of market growth, it's been significantly less than kind of in that immediately post-COVID, where Canada's population growth increased dramatically in '22, '23 and kind of the first part of 2024. That has subsided quite a bit. So back half of '24 and all of '25, we were adjusting to and lapping very high rates of market growth. The market is still growing. It's just growing less than it did a few years ago. And as I look into 2026, it's going to continue to grow, and it's going to grow probably similar to this year. So we are lapping -- like we've lapped that headwind now. And from a general economy perspective, I think the economy in Canada is going to probably stay more or less stable in '26 as it has been more or less stable in 2025. So we've got that stability, and we've got market growth stability. So I think that's another positive proof point.

And what's driving the churn improvement?

It's a multifaceted approach. So first of all, I mentioned in the first question, really putting our -- walking the talk on customer experience. We are -- we've done a lot of work that no one's seen cleaning up, call it, the back end of the legacy systems. And essentially, in a nutshell, equipping our people with the tools they need to better serve customers. That would be one. We've also equipped our customers with the tools they need to serve themselves. whether that's a virtual repair tool, better online sales. We've got AI, virtual -- AI-powered virtual agents to help mediate issues. So that customer experience is dramatically better. That's one. Two is we've spent more time, significantly more time focused on increasing the number of households who buy multiple products from us. So increasing that bundled household. Back in 2020, we were materially gap to our competitors. We've narrowed that gap. In Canada, convergence has shifted not only from mobility and Internet to mobility Internet and content, and we've got a significant advantage there on content. If you think about that converged 3-product bundle, we're in a great spot. We have the most fiber households of anybody with fiber is the best broadband technology you can buy. We've got a national wireless network, and we've got a tremendous 5G, 5G plus network, owner economics on wireless, owner economics on fiber, and we own the #1 sports service available streaming. And we have -- we are the only Canadian -- we're the only Canadian operator with a premium content streaming platform called Crave. So we have economics on content. And we've been driving customers to multiproduct on the Bell brand. So we also have great distribution and tremendous trust in the Bell brand. So you put all those together with a focus on execution, we just kind of basically put our shoulder to the wheel and get it done.

And within that, is there also maybe allocation of spending to retain the base? Is that also helping?

We have also -- we were gap to our competitors, we believe, in the recent past on the number of subscribers that we've recontracted. And if we look in kind of the recent performance, we've had a stellar -- if you look at our customer -- or the customers that basically our net add growth in the last few quarters, high preponderance on the Bell brand. We like our sales mix. We've got a higher proportion of contracted customers compared to bring your own device customers or noncontracted customers compared to the past. So we have put a lot of focus on that, too.

Okay. And something that we saw in the U.S. is that continuous price up led to higher churn. And in Canada, we just started to see some stable pricing and even maybe some increases of the front book. Do you think that those are sustainable? Or do you worry that, that could increase churn when you had started to see just some improvement flow through?

Well, I -- again, I feel very good about that, too. So if you -- there have been some price ups, but we needed some price ups. But if you compare the level of pricing today in the market compared to 5 years ago, it's 50% less at a basket level, at a macro level. So there's significant and better networks. So the consumer in Canada is getting significant value. I think we're getting to a better equilibrium in terms of the value that we deliver and the price that we secure for the value we deliver. So -- and then the entire market has moved up a bit. So I think from a pricing point of view, there's not kind of one provider who's standing out, except maybe the fourth provider that has a little bit of pricing room there. So it really is around driving better execution across the key touch points that the customers are looking for, price, trust in the provider, better customer experience, better networks, content.

So along -- putting all of those together in terms of -- everybody is focused on your ARPU trends. It had been sort of declining but at a growing rate. And now we've just started to see potentially some improvement going forward. Can that be sustained? And can ARPU grow?

Yes. So we see the possibility of ARPU growth in the back half of next year. So I'll lead with the punchline on that, which is important. I think if you're looking at pricing generally, if you -- ARPU is composed of several elements, one of the key components of ARPU is the monthly service charge. And the monthly service component of ARPU that we are securing today from new customers is higher than the monthly service component of ARPU in our base of customers. So that's a really positive development. And then we're more than halfway through the repricing of the back book, which is another good touch point. And as far as Bell is concerned, in particular, the drive that we have and the focus that we have on multiproduct households, which are -- we only have now one brand that offers multiproduct, which is Bell. So we're driving higher value customers on the Bell brand across multiple products, which is driving lifetime value and significantly higher lifetime value than for the average customer. So that's also a really positive development as you look at churn in wireline, churn in wireless and then ARPU growth in wireless and ARPU growth in wireline and ultimately, lifetime value.

And I think within wireless, you've also mentioned that it's nice to have subscriber growth but profitable subscriber growth. Right now, the environment seems to be manageable. But can you talk about kind of like where you would draw the line in terms of promotional activity and let go subscribers? What is more important as you head out next year or through your 3-year plan?

So the most important thing is going back to the very first question, we want to drive sustainable free cash flow growth for our investors. That's clearly -- if you just go back to Investor Day on October 14, title of the whole day was driving sustainable free cash flow growth. You do that by driving revenue growth and EBITDA growth and ultimately managing your CapEx, funding the right things, and that's how you're going to get your free cash flow growth at the 15% CAGR levels that we want. So if you start with that's the primary objective and walk -- walk back from there, clearly, we need to grow the platform. We want to have wireless is such a big component of our business. We want to grow our subscriber base, but ARPU accretive customers with higher lifetime value. That's the objective. So it's not -- we sit there -- when we look at a quarter, we're not saying the win for us is winning net add market share in that quarter. It's getting the best customers that are ultimately over time, going to allow us to execute against that 3-year road map we provided to shareholders because now it's all transparent. Everyone knows what we're trying to drive from a financial perspective. So every move we make tactically is designed to do that. So clearly, we want to grow our net adds, and we will and we have been. But it's on the Bell brand, multiproduct, ARPU accretive lifetime value.

Okay. And on the convergence and multiproduct, what converged bundle provides more improvement on the churn side? Is it the fixed wireless one or wireless maybe fixed and DTC, which one does better? Or does it matter for you?

Well, the more products you have, the lower your churn and the higher lifetime value. So it's -- ideally for us, the sweet spot is a wireless customer on the highest tier combined with fiber on Internet and hopefully kind of 3 gigs, 1.5 gigs, 3 gigs, potentially higher and content. And what -- the highest ARPU on content is the full-fledged 5 TV service with the biggest content packages, but the streaming packages we offer highly accretive as well. The highest base of converged customers we have are mobility and Internet, but Canada is migrating to mobility, Internet and content. So kind of at a general level, mobility, Internet and content is where we want to go, and we have some pretty high growth objectives on those bundled customers that we've outlined at Investor Day, but mobility and Internet is also important.

Okay. And can you talk a little bit about beyond improvements in churn, what other opportunities do you get when you bundle the product?

So it's again, it's the overall lifetime value. And so for us, it's when we bundle a customer, we automatically get them on the Bell brand, which is what we want to do. So like you get offer simplification because all our multiproduct offers are on the Bell brand. So you lower your cost, you lower your cost, you retain the customer longer, which is obviously the churn component, your lifetime value goes up. And then you get to -- once you've got the customer, you get to migrate them to more content or a higher tier of mobility or a higher speed tier on fiber.

Are there opportunities in terms of integrating all the different cost buckets when you are serving a multiproduct customer?

Yes. And we've done that. So we've done a lot of work in the background simplifying our kind of our service delivery. We used to have 5 years ago, we used to have a call center queue for a call center operation for mobility, a call center operation for wireline and then you'd have the transfers. Now we have household queues as an example, that drives a lot of costs out. We've got the ability to mediate customer interactions digitally with virtual agents, both chat and voice assisted across all the services in unison. So that takes a lot of cost out of the business. Of course, the more fiber you have and the more customers you have on fiber, your costs are automatically going to go down, both in terms of truck rolls with self-install, virtual repair, lower truck roll. So it all goes together end-to-end. It's an end-to-end approach to service delivery.

Got it. And what about competitive intensity in broadband? Is that getting any better?

Actually, it is. And then we saw -- we're seeing some stability there in certain key provinces in Ontario, in particular, which is the most populous province in the country where we have the largest number of fiber locations, we've seen pricing stabilize. Quebec is the second largest province where we have the second highest fiber locations, and we've seen broadband pricing by and large, if you look over a 12-month period, stabilize there as well. So we're feeling good on that front also.

You have been the challenger mostly in Quebec.

We -- until this year, we had been the challenger. And there's a reason for that. So in terms of -- we've had fiber in Atlantic Canada since 2008 and our performance has been stellar. And in Ontario, our performance has been very strong as well. In Quebec, we had kind of a significant amount of fiber. In fact, it's the other than Atlantic Canada, where we started our fiber build, yet we saw our kind of penetration had stagnated. And I was not pleased with the fact that we invested so much capital building the best network, and we were growing our market share, but not commensurate with the market share growth that we saw in other areas where we had fiber. And as we lowered price, we saw -- there's a lot of legacy reasons for this that we had to overcome, which we can get into at some other time perhaps. But we saw with kind of adjusting our price, we saw our market share skyrocket. So we went from low 30s to low 40s in penetration and market share. And -- but that has an impact when you're the price challenger. And now that we've got our market share in a more reasonable place, we've pulled back on the pricing lever somewhat. And I think that's why I can say in answer to your first question, we have seen stability.

Right. And in terms of your penetration goals where you have fiber, where do you think that could sort of get to and stay at a run rate?

I guess I'll go back to Atlantic Canada. So again, Atlantic Canada, we have tremendous fiber coverage, just a small number of -- the population is relatively small compared to some other parts of Canada, but we have very high fiber penetration, had it for quite a bit of time and both our market share and penetration has punched well above 50%. So when you've got the superior technology...

Specially with multiproduct?

In multiproduct, you got the superior broadband technology. Broadband is so critical to consumers. And the capacity needs and the quality needs will not diminish over time. And so I think we're -- and fiber is going to remain the superior technology for a long time. I think cable, just as a general comment, cable infrastructure has got to -- cable operators have a lot of work to do, a lot of work to do to keep up with consumer needs, bandwidth needs and to keep up with the competition. So we're in a good spot. And we have more than -- important point for those who may not know Canada as well as you do the U.S., we have more than twice as many fiber locations as any other provider and nowhere that we operate is there another fiber operator. So we are the only fiber operator where we are, where we offer service and have more than twice as many as the nearest fiber competitor in Canada.

Right. And -- but I think your plans are kind of like getting to that 8 million fiber homes passed and not necessarily build beyond that.

So we had a target. We outlined a target in 2021 to get to the target to get to 8 million. We will be at 8 million by the end of this year, which is in 2, 3 weeks. And then we're not going to stop. We're just going to significantly reduce the pace of build. So we're going to think about it as a baseline build. There are new housing starts in Canada, like they are everywhere else every year. So new housing starts in our operating territory, we will build fiber too. We have some subsidy builds that provincial and federal governments have subsidized some broadband builds in rural areas. We've contracted to do a lot of those, and we're going to continue to fulfill our commitments over the next 2, 3 years. So we'll do that as well. And we've got some black holes, some MDUs in urban areas that we want to continue. So that's what we're going to do as the baseline build, which is significantly less than recent years. And we're going to drive fiber growth in the U.S. through Ziply Fiber.

Right. Before we get to the U.S., fixed wireless in Canada, I think you reached -- you have about -- a little bit over 1 million passings. How do you envision utilizing that product going forward?

The short answer -- and I don't mean to be flippant, but the short answer is fiber wins. Fiber just wins and fixed wireless access does not compete or come anywhere close to competing with fiber and actually doesn't compete very well in Canada anyway against Tier 1 cable. And that's been our experience. And there's a lot of talk in the U.S. about fixed wireless access, probably the known fact south of the border is we were the first to launch fixed wireless access at scale. So in 2018, we launched our offering to 1 million locations passed. And I mean it does well where there's no other option, and it does well against Tier 2 cable nothing competes with fiber.

Okay. U.S. So it was an interesting move on your part, I thought getting into U.S., but also having some ambitious plans to keep the fiber deployment going. It seems a bit of a land grab right now. Everybody -- I mean, a lot of the incumbent telcos and private companies are looking to build fiber. Are there that many opportunities to build fiber in the U.S. in an economic way?

Right. So if I take a step back, just because you said surprising at the time it was announced. But if I take a step back, we are -- we become a fiber-first company. That's what we do, and we do it really well. And as we were getting to the end of our 8 million locations passed target that we just talked about, we said, okay, we're not going to -- we want to continue to drive growth with fiber because that's what we do. So where is the opportunity? Is the opportunity to continue to push as aggressively in Canada? Or is there a better opportunity in the U.S. And now that we've got 8 million locations passed in Canada, the incremental build is higher cost to build than the initial 8 million. And there's such an opportunity in the U.S. There's so much less fiber availability here than there is in Canada, and the cost to build is very attractive. And so that was kind of the strategic rationale behind the Ziply Fiber play. Now in terms of our expansion opportunity, we're at 1.4 million fiber locations passed in the Pacific Northwest. And we have a goal to get to close to 3 million by 2028 with a longer-range ambition of 8 million. There are a lot of households in the U.S. that don't have fiber significantly more than 8 million. So we've mapped out the opportunity, and we believe we can get to the 8 million. But what's important is the business -- it's not like the investment case turns on 8 million. It's just a growth opportunity. If we get to 5.5 million, that's a tremendous growth opportunity. If we get to 6.2 million, that's a tremendous growth opportunity. But we have line of sight to 8 million, and that's what we're going to do. And when we go back to -- again, back to the very first question you asked me, and I say one of our key objectives is to optimize the cost of capital. We have a funding partner in the U.S. to help us fund the build and therefore, drive the growth that we want to secure. And that's with PSP, which is the Canadian Public Sector Pension fund.

In terms of cost to build, as you think about maybe the next million and the next million, how are you thinking about the cost to build to evolve? I think we saw some cherry picking and initial maybe 50% of the U.S. has been built roughly $1,000 per home or maybe a little bit above. But isn't the next cohort going to cost more?

We think that in the large majority of the 8 million that we've mapped out will be -- we're anchored to -- I'll tell you what the key variables are for us. We're anchored to that $1,000 per line pass, give or take, a little bit because we appreciate it. We do understand that over the next couple of years, there will be general CPI or inflation. So -- but we're anchored to that $1,000. We're also anchored to the concept that we are going to choose locations where we're the first to fiber. So key things. Cost to build, first to fiber. And then even with those key variables, we see line of sight to that 8 million over time. But again, 6 million, there'll be amazing growth for Ziply Fiber.

Is convergence important to get that fiber growth in the U.S.?

Well, it's -- we're going to build first and then the key thing is penetrate the fiber plant that we're going to build. We've seen -- we've compared Ziply Fiber penetration gains where they've launched fiber in their current footprint to BCE's fiber penetration gains where we've launched fiber, and we've been building fiber since 2008. So we have 18 years of -- 17 years of experience with fiber. Ziply Fiber's penetration gains after 6 months, 1 year, 3 years, 5 years is very, very close, basically sits on top of our lengthy experience. And this has been done in the kind of the last 4 years by Ziply Fiber without a wireless offering. So they've not been slowed down at all. So we're going to get the penetration gains that we expect in the investment case without a wireless offering. But here's what we think is going to happen. At some point, we'll hit that kind of a certain penetration plateau, which I think will be in the 40 to mid-40s. And we may need at that point in time, a wireless offering to get to the next plateau of penetration gain. So I fully expect that over time, we will have a wireless offering, and we've got a lot of options there. And the Ziply Fiber management team was planning for this before they became part of the BCE family in any event.

Because it seems like the U.S. is changing. Cable is losing momentum, fiber, fixed wireless taking share and convergence is also part of the play. And frankly, right now, we don't have that much pricing power in the U.S. when cable is looking to improve volumes. How do you think you can balance both? Like do you think that you would need maybe wireless convergence earlier than planned? And do you think that you can continue to improve pricing here? Can you see price up in the U.S.?

So interesting, Ziply, the secret to Ziply's success to date. And I mean it's a really interesting story. It basically took a legacy asset that was dramatically underperforming which was part of Frontier, acquired it in 2020 as part of kind of right before the Frontier restructuring and the team of founding management set about completely turning that asset around to become a fiber-first operator. So #1, it's all fiber. There's a little bit more of legacy copper upgrade to do, but significant fiber, completely, fully modernize their IT stack. Their NPS numbers, no matter how you measure them, service sales, transactional relational through the roof, their NPS numbers like I've never seen before. So customer-first culture, fiber, completely modernize the IT infrastructure. In fact, up to now, their pricing has been a little bit lower than cable and it's delivered tremendous results. So as we look forward, we're just going to continue leaning on those key ingredients. And when you -- the management team -- I mean, I'm proud of the following thing I'm going to say, the management team has stayed with BCE post-acquisition. And they've done it because they're energized about what we want to do. With BCE now as being part of the BCE family, we have a plan to accelerate the base case build that they had before. So we were able to do what they wanted to do faster. And now we're also expanding beyond the 4 core states, which wasn't in their base case plan. So we're accelerating and expanding. And now you've got BCE, which has deep expertise in fiber with a local management team with deep expertise in fiber and then you've got the capital [ VC ] and PSP behind the push. So it's a great story for them.

Okay. Going back to Canada. When you gave your 3-year outlook, one part that we weren't very comfortable with is the expectations for enterprise revenue growth to accelerate to 2% to 4%. Can you talk a little bit about kind of new initiatives, but it also carries a lot of legacy revenues that have been declining for some time. How do you make that transition in an accretive way? And I think we hear from multiple telecom operators that enterprise and new opportunities, AI-driven solutions is key. Everybody seems to be the winner. But who is actually going to win? Just your approach to how you can turn enterprise.

That's a great question. And we are very excited about the potential of Bell Business Markets, which is our Enterprise division. It is an underappreciated jewel in the BCE story. So let's take a step back. We have $5 billion -- roughly $5 billion in revenues today, the vast majority of it being in what you would consider the core communication services that we've been delivering to enterprises for 145 years, right? And I think what's unique about us, and if you just look at our more recent traditional rate of decline in core communications because basically every telco has been declining in core enterprise. Just really look at our rate of decline -- well, we weren't sharing all these numbers in the past, but I will tell you that our rate of decline was very modest in the recent past and significantly better than the performance of other kind of large cap telcos who have big enterprise businesses. So we've been managing the decline really, really well, but now we have a plan to turn the core communications business in enterprise to flat and a little bit of growth. And it comes back to, again, execution, just delivering -- modernizing the back end so we can deliver better service to customers. I can go on for half an hour on this, but I'll just leave it there. It is providing network on-demand services. It is offering new modernized versions of communications. So Unified Communications as a Service. For example, we have an exclusive partnership with Zoom, where we offer Bell Zoom Workplace or workplace by Bell Zoom. These are the kinds of things we're doing to modernize the suite of services in core. And we're going to turn that modestly negative to flat to slight growth. Then on the -- we have 3 growth verticals now as well, and you mentioned them in terms of kind of the AI vector. So we have 3 newly launched businesses this year. One is cyber. Another one is Ateko, which is -- think about it as a systems integrator that's hyper focused on AI automation. So it helps enterprises with their cloud infrastructure, Azure, Google Cloud and AWS as well as ServiceNow and Salesforce, hyper focused on only those things. And the differentiator for Ateko is all that work I described, all the expertise, they do it for Bell. As we've modernized ourselves, Ateko has been a key ingredient to that. So all that experience then gets brought to our third-party customers. And we have Bell AI Fabric, which is a national ecosystem of purpose-built AI data centers. And what's really key here in terms of who's going to win is 95 of the top 100 enterprises in Canada do business with Bell and have done business with Bell for years and decades. And we are the most trusted -- frankly, we're one of the most trusted brands in the Canadian economy. So we have deep enterprise relationships, the best network and a hyper-focused suite of AI solutions that we're seeing organically grow quarter after quarter. By the way, in terms of who's going to win? Well, there's a lot of room, right? The addressable market is massive. And it's not going to be a winner-take-all kind of thing. There is a lot of growth there for us to secure despite the fact that there's going to be -- many players are going to try to take their kind of anchor down in certain corners of the space.

That's great. We're out of time, but one final question on capital allocation. We heard during the investor meeting your target leverage, CapEx needs -- CapEx requirements and investments. Maybe just help us how would you prioritize all the capital allocation needs over the next 3 years? And within that, one pushback comes through lease payment reduction is a part of that 16% free cash flow growth. How do you achieve that?

Yes. So maybe some open the aperture here. So we want to get to 3.5x leverage by 2027, and we will. We're going to deliver at least CAD 5 billion in total dividend payments between now and 2028. Our capital in terms of our CapEx budget, we expect in absolute dollars to remain flat in '26, '27, '28, which means that as our revenue grows, our capital intensity ratio will come down. You've got kind of flat CapEx, but your revenue is growing. So we'll be in the 15%-ish this year, probably 14.5% next year, then lower than that in '27 and '28. And again, it's the focus on where we allocate those dollars is going to be against the 4 priorities I mentioned at the very beginning, customer service improvements, wireless network improvements, more fiber, Canada, U.S. investing in the right spaces in AI and then in digital media. Those are where the investments are going to be and the ones that drive the highest returns, the programs, projects, investments in those core priorities that drive the highest returns are what is going to get funded. And on capital lease repayments, yes, they are going to come down over that 3-year horizon. So we're going to be delivering 7% free cash flow growth, the way we've traditionally defined free cash flow and 15% CAGR after capital lease repayments.

Okay. Great. We'll stop it there. Thank you so much.