Quebecor Inc. (QBRA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Quebecor Inc.'s Financial Results for the 2021 Third Quarter Conference Call. I would like to introduce Hugues Simard, Chief Financial Officer of Quebecor, Inc. Please go ahead.

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

Good morning, everyone. As we announced last quarter, we are moving ahead with our plans towards the expansion of our telecom services across Canada, thereby creating a real competitive dynamic and bringing Canadians the benefits of technological innovation, superior client experience, and lower prices. The first step towards our objectives of becoming the fourth independent wireless provider in English Canada became a reality in July with our investment of nearly $830 million, the acquisition of 294 blocks of spectrum in the 3,500 megahertz band across Quebec, Ontario, Manitoba, Alberta and British Columbia. Our investment of $357 million or 119 licenses in Quebec will enhance an already solid spectrum base acquired throughout the last decade, starting in 2008 prior to the launch of our facility-based wireless operations. These licenses will be used for the deployment of our 5G platform, which is already in operation in Montreal and Quebec City. The remaining investment of $472 million is dedicated to the acquisitions of licenses in the main regions of the aforementioned provinces. On this topic, I have to say that we were surprised by Telus' court initiative against the government of Canada to try and block the award of these licenses to video to Quebecor. That being said, we will release, although not surprised this time that the federal court clearly told -- tell us that its claim was without merit, and denied [Audio Gap] Tenable and do not raise a serious issue. This is the Paragraph 2. And I still quote, the decisive factor is the public interest in fostering greater competition in the market for mobile home services and such as the Paragraph 4. It is sad to realize the lengths to which Telus and Bell will go to delay a block and to ultimately squeeze out at all costs, any efforts to create healthy competition and ultimately lower the prices Canadian pay for mobile services. We continue to call on governmental and regulatory authorities to issue the licenses and more generally, ensure that their long-standing competition policy and objectives are backed by concrete actions forcing the incumbents to actively cooperate and take the necessary steps so that Canadians are not less paying amongst the highest telecom prices around the industrial line world. I would also like to comment on our recent court action against Rogers, our long-time ally and partner in building a joint wireless network in Quebec. To remain on the legal side of business, and keeping in mind that the judice rule as well as the respect owned to the courts, I will not comment any further nor I will answer any questions regarding this matter. The only thing I wish to share is that over the last year, as described in the claim, we've always strived through the network steering committee to find answers and solutions to the various change requests, demands, and other apps from Rogers' new management. But every time we met Rogers' request, they came back with further and higher demand. And since Rogers felt comfortable to state publicly that we fail to meet the investment ask to improve our joint network to benefit our customers, I myself feel comfortable to say that is far from the truth, to say the least. As you know, Quebecor has been recognized for many years as the most respected telecom company in Quebec. Could this be possible without having our plant at the center of everything we do? We always acted as a true partner to Rogers and tried to avoid the unpleasant publicity of a public records, negotiating, a suspension of the time limitation period of 3 years, according to the law, to give ourselves a chance to settle our differences, but to no avail. Given the current events at Rogers, we now understand why our discussions were not a priority and sincerely hope that when the air clears at Rogers, we may have a chance to engage in a constructive dialogue with open-minded individuals. Turning to operational matters. We launched Vrai, the first French-language video subscription platform, dedicated exclusive unscripted lifestyle, supplementary, and entertainment content. In just a few weeks, we recorded 17,000 subscribers and over 200,000 views. We will offer 4-year original production this year and over 100 original Quebec productions by the end of 2022. Along with the success of Club illico, which is dedicated to series, movies, and use programs, this new platform will enhance and complement our content offering. We are expanding our collaborations with local producers, and we will continue to significantly invest in the production of new local content, thereby strengthening our leadership position as the largest catalyst for original French productions in Quebec. Speaking of Club illico are their own successful OTT. We launched our programming 2 weeks ago with a record number of new majors original series and an exceptional 2021, 2022 lineup, featuring leading figures of Quebec cultures, such as Patrick Senecal, Florence Longpre, Sophie Deraspe as well as Philippe Falardeau and Xavier Dolan. Finally, bringing all these investments together, we also unveiled QUB, the new digital platform that brings all of Quebecor's -- sorry, Quebecor news and entertainment content together in one place. Available on the web and via a mobile app due to the unique showcase with a vast quantity of multisource, multi-format content, where users will have access to millions of items, including text, music, video, and audio in a single environment, live and/or on-demand. Once again, on the forefront of innovation and anticipating market demands and trends, QUB will further reinforce one of Quebecor's most important competitive advantage against our national competitors. Our unmatched ability to produce and deliver unique, differentiating new, and entertainment content. On the B2B front, we're pleased to announce that the Videotron business, team up with X-Telia, a Quebec based technology company to offer a wide range of connected object solutions to accelerate the digital transformation of cities, municipalities, government organizations, and businesses across Quebec and provide them with solution for waste management, water management, and quality, smart parking, environment management, and noise pollution. also recently landed a major contract for IoT services with the VSAM, which is the Montreal Public Transit authority, further strengthening its leadership position in Quebec. Moreover, in September, Videotron and TVA Sports announced their partnership with the Lions de Trois-Rivieres, which is a new team with the ECHL. The new Trois-Rivieres arena is now named the Colisee Videotron and TVA Sports as the exclusive official broadcaster of the Lions de Trois-Rivieres games. This partnership demonstrate our continued commitment to Quebec sport and entertainment industry, supporting and promoting the next-generation of Quebec athletes, as well as contributing to the economic development of Quebec regions through investment that benefit local community. I will now review our operational results, starting with our Telecom segment. On the wireless front, we posted 41,000 net adds during the quarter. Despite a continued aggressive competition from a loading and renewal perspective, especially towards the end of the quarter, we were able to keep our turns flat year-over-year and once again captured the largest share of growth adds by far, with 37% of the market, our best performance ever and with our Videotron and Fizz brands coming in first and second position, respectively, according to [indiscernible] marketing serve. Consolidated wireless ARPU for the quarter declined 1.6% or $0.83 versus 2020. This decline is explained in large part by the dilutive impact of BYOD model at Fizz, combined with a decline in roaming and data usage revenues. Videotron recently enhanced its value proposition regarding the equipment installment plan by launching in September, the take back credit program option, allowing customers to further benefit from reduced monthly phone payments in broadband. We are pleased to report another strong quarter with the growth in internet subscribers of 22,500, 2,000 more than during the third quarter last year and a 2.1% or $1.13 Internet ARPU growth. In the quarter, more than 100,000 Helix installations were completed, bringing our total Helix subscribers to over 1 million as of September 30, 2021. Our Helix TV continues to help lower our TV churn rate and mitigate our TV subscriber decline, which was 13,400 in the quarter, an improvement of more than 2,000 compared to the third quarter last year. We continue to promote Helix self installations, and we are very satisfied with the result thus far. We have already surpassed 100,000 self installation since the launch in March 2021 and are pleased to report a 93% overall customer satisfaction rate. This program has proven to be very successful, and we'll continue to improve it to maintain the current satisfaction rate levels. In our Media segment, advertising revenues continue to increase, particularly in our television network where they came in higher than the same quarter of last year, but also 22% higher than the same quarter in 2019, which is, as you know, pre-pandemic. TVA consolidated market share reached 38.2% for the quarter, strengthening our leadership position in the Quebec market with such hits as the French version of [indiscernible] are key gains. Building on our #1 franchise, we continue to increase our investment in content, a strategy that is reflected in our fall programming with a wealth of new shows, original production and exclusive content for our digital platforms such as TVA plus, which continued to grow and build on its strong popularity. Our array of content is broader and more diverse than ever and is available on multiple platforms to reach more Quebecors on a daily basis and bring them together for major television events. Our Film Production and Audiovisual Services segment also performed very well with high demand from bigger productions, such as Paramount Pictures mega production transformers, right of the beat and also from major online streaming climate. Mail services are increasingly being recognized and used by international clients, placing us in the invariable position of being able to take advantage of the current market growth and plan for expansion, our facilities with the upcoming constructions of MELS 4. Our virtual stage services continue to draw the attention of producers with greater numbers using the technology to facilitate shooting certain scenes or creating advertising. I will now let Hugues review our financial results.

Quebecor's revenues were up 3% in the quarter to $1.15 billion, and EBITDA was up by more than 1% at $520 million. Third quarter revenue growth from our Telecom segment was flat as compared to last year as the growth from internet access and mobile telephony, up 6% and 8%, respectively, was counterbalanced by a reduction in mobile equipment with more BYOD than in Q3 last year and also the stabilization of the growth in Helix equipment sales, which drove most of the top line increase in prior quarters. Our Telecom segment EBITDA posted a decline of 1% compared to last year as a result of a $19 million unfavorable impact -- of the impact of a $19 million one-time item in the third quarter of last year. Without the impact of the 2021 time item, our telecom EBITDA would have grown by 2.6% in the quarter. Our overall EBITDA margin remained strong at 51% for the third quarter, still one of the highest in the Canadian telecom market. Our Media segment recorded revenues of $191 million, a 21% increase, and an EBITDA of $37 million, a 47% increase compared to the same period last year. In our Media segment, TVA Group continues to benefit from the improvement of activities from almost all of its sectors as evidenced by the 26% and 52% respective increases in revenues and EBITDA during the third quarter. Quebecor reported a net income attributable to shareholders of $173 million in the quarter or $0.71 per share, a $32 million increase compared to the same period last year. In addition to the EBITDA improvement, this increase is also explained by the gain on valuation and translation of financial instruments related to our convertible debentures as well as to the restructuring initiatives that were put in place during the quarter. Adjusted income from continuing operations, excluding unusual items and gains or losses on valuation of financial instruments, came in at $176 million or $0.73 per share compared to an adjusted income of $173 million or $0.69 per share in the same quarter last year. For the first 9 months of the year, Quebecor's revenues were up 6% to $3.37 billion, and EBITDA was up 3% to $1.47 billion. Revenues from our Telecom segment grew 4% to $2.78 billion, and EBITDA increased 2% to $1.41 billion for the same period. Telecom CapEx spending, excluding spectrum, was down $18 million for the quarter as compared to the previous year, mainly due to the timing of some of our investments. On a year-to-date basis, CapEx spending is comparable to last year with continued deployment of the LTEA, LTE Advanced and/or 5G rollout as planned. Our cash flow from operations for the third quarter of 2021 increased by $20 million or 6% to $366 million, once again demonstrating the resilience and strength of our business model as well as our continued operational and financial discipline. Cash flow from operations from our telecom segment grew $11 million or 4% to $337 million. TVA Group's cash flow from operations grew 44% to $29 million in the quarter. As of the end of the quarter, our net debt-to-EBITDA ratio was 2.80, up from 2.76 reported at the end of the third quarter of last year, still one of the lowest in the telecom industry competitors and peers in Canada. Despite the redemption of Videotron's 5% senior notes and Quebecor media's [ 6.625% ] senior notes in July, with $2.3 billion in available liquidities at the end of the third quarter. With growing free cash flows and strong credit profile, our liquidities are giving us the flexibility to continue and invest in strategically important growth projects such as mobile telephony, investing in content, and continuing to invest in studios. During the first 9 months of the year, we purchased and canceled 7.1 million Class B shares for a total investment of $226 million. Since we initiated our NCIB program 10 years ago, approximately 47.7 million Class B shares have been purchased and canceled. We thank you for your attention and would now like to open the lines for your questions.

[Operator Instructions] And well, the first question comes from Jerome Dubreuil from Desjardin.

So first question on the media front, good results. Just looking to see how recurrent are the good results in terms of film production. I know this business can sometimes be lumpy, but I also think you've made significant investments in that business. Can we expect such good results going forward as well?

I get that. Looking forward, it's now always an easy exercise as we -- and we will certainly have the opportunity to talk a little bit more, but I expect no questions regarding the telecom environment. And I would say that and the broadcasting industry is also quite competitive. Obviously, we're getting out of a situation where pandemic was certainly not the best environment. As you know, the advertising revenues were certainly not in the best conditions, given that most of the retail business were closed and significant businesses were not performing. But we need to say that in front of us, we have 2 main competitors, Bell, which with the specialty channels lineup and generalists are still much more in a better position than the previous owner. And in fact, these are the kinds of representation we made in front of the CRTC. They have a national platform in English and French, which we do not. And that also provides the capacity for them to move forward. The good thing, and it's been also used by our competitors and Canada is one of that, which is the second one I was referring to earlier, is that we have many platforms. So if we are investing in this if we do, as an example, and I mentioned it in my presentation in Prix Gemeaux and/or Vrai, which is our new OTT documentary platform. This also gave us the opportunity to rebroadcast this content on the other platform. So we are multiplying the amount of vehicles, which we are able to use to generate advertising and keep our audiences as much as possible. So this is something that we've been doing for many years already, and it's been copied by [indiscernible], there are 2-point EVX, which for us, quite -- it's a big question mark, because I didn't know that the national broadcaster will compete against private networks on an OTT basis, to me, this is distribution, where should be a broadcaster. In fact, we made our presentation during the renewable audiences. We expect the decisions to come forward and figuring out what the CRTC thinks about this. And so we look forward to continue to expect a competitive environment, but we certainly have a leadership position, and we will continue to invest to make sure that we remain #1 on this segment. Sorry for the long answer.

No, that's fine. And then second, on the back-to-school, do you feel that you had the full benefit out of this? Or this was still not a normal year? Just trying to assess here if your net adds could be better or similar next year just related to back to school?

This was a fairly active and fairly competitive back-to-school. We're quite pleased. I mean, 41 in wireless. I mean, historically, this is a -- it's a good quarter in terms of loading for us. But it's one -- in terms of back-to, that is slightly a bit more challenging with a lot of students back and taking in lower price points. And we had significantly more bring your own device. BYOD this quarter, 74% is OE compared to 66% last year, same quarter. So that also contributed to that. So I think, all in all, in terms of activity, I qualify it as very competitive. So pressure on the average invoice. But we're fairly pleased with our loading. We did very well. We did very well against competition in terms of growth adds in our market share. So it was very busy and very competitive, but we feel that we came out of it, especially with Fizz, which accounts for most of our growth on the right side of this equation.

Next question comes from Jeff Fan from Scotiabank.

A question for Pierre Karl. You've obviously been very vocal about the national expansion. But I think the market is sitting back, looking at the various obstacles that you still have. You mentioned the lawsuit against Rogers and Quebec, the spectrum, yes, there's no injunction, but you still have a court case next year. I think the MVNO cost is still not clear. So I mean how can investors gain some comfort that you're making a good investment decision here? Can you just kind of shed some light on the thing that you're looking at to ensure that you're making the right investment decision?

Good. As you know, Jeff, the CRTC provide what I would call favorable conditions. In fact, probably, we can say the most favorable condition ever. Out of the decision this summer, what we call 2021/130, MVNO is now regulated, and the incumbents would need to open their network to new competitors. As you know, we started our wireless business in 2006 with Rogers network as an MVNO, we participated in 2008. We made representation in 2008 to make sure that if government was looking to have competition, the best way to do so will be to -- well, to provide certain conditions, one of which, probably the most important would be to set aside spectrum during the auction, also mandatory roaming and a few other conditions. The late that [ Jean-Francois ] the situation and then therefore decided the ministers to open the auction with those conditions. We participated. We bought the entire 40 MHz in Quebec, and we started to build our own network. To all those years building our network, providing one of the best services, we've been able to achieve a significant portion of the market share. Fortunately, that was able to provide a growing opportunity in terms of revenues and EBITDA. And if we were not to have this segment of business, I don't know, obviously, we cannot redo the time frame, but 10 years later, I think that we should conclude this decision, which was, at the beginning, probably question was then therefore delivering some significant amount of growth and EBITDA. What is the plan in the rest of Canada with the MVNO regulated environment, a statutory to be made with our acquisition of Spectrum, we have all the assets to be able to provide a good service. In terms of investment, as you know, we already have invoicing system. We already have call centers. We already have our digital platform. We have all the assets necessary to provide a decent commercial proposal. And you don't need to go very far. And you guys, which are following the telecom industry knows very well, our competitor in the marketplace is in Quebec, when we compare with the rest of Canada. Sorry about this, but this is -- so next, I would like to give you an example, and you can go on my Twitter account for more illustrations. But last week, in many newspapers, so if you go to see on October 28th, so last Thursday, you see in the Vancouver Sun in the Edmonton Journal and the Calgary Aero and the National Folks and the Ottawa Citizen, that you have an add of Bell, which is proposing 20 gig for $80. This is the same ad. And you go to Montreal Gazette with the same ad for the same proposal, 20 gig, you're finding it at $65. This is the most recent example, but it's been like this for many, many times. So we look forward to be able to piggyback on a very lucrative market. And when I'm looking about the results of Rogers and the quarterly results of them with their significant amount of new ads, at the prices that we're seeing, I guess they're room for us to grow there at a decent investment price and as you know, we have 7 years to build our network. 7 years in a technological environment, we're seeing new perspective, which is bringing interesting opportunities to reduce the cost of building a network, all those items for me and for us is providing favorable conditions to move forward and expect growth elsewhere, there were in Quebec, which is, I would say, a quite mature market for us.

So just a quick follow-up. It sounds like you're talking about a capital-light expansion using MVNO first. So are you saying you don't need to pursue Freedom in order to address your national expansion opportunity?

Well, obviously, this is a very important matter. It's -- and maybe you have more insight than we do, but we get problems to understand what's going on with Rogers and Shaw, we're figuring out what will be the outcome of everything. But we're not going to open our play here. And certainly, again, I would say that we consider that we have a -- there are also all the proper tools and means to be the better quarter for Freedom. So what is interesting is that we have many alternatives, and this is what we should conclude for the moment.

Next question comes from Tim Casey from BMO.

Two from me. Just following up on Jeff's question, Pierre Karl, should we assume then that you'll be launching Fizz imminently, no matter how the Freedom, any remedies related to Freedom play out and no matter how MVNO discussions proceed? And is that what you're signaling to the market here? And just an accounting question for Hugues. Regarding working capital, it's been a huge use so far this year. And I know that's related to handset acquisition and EIP and whatnot. But just wondering if you expect that to swing in Q4 or more likely in 2022?

We unfortunately, don't control the different actions that are taken by the incumbents to stop and to refrain our capacity to offer a proposal to Canadians in the different areas where we acquired spectrum. We've been seeing, once again, that they're completely allergic to competition. When you start suing the government of Canada in a regulated environment, your spectrum comes from the ministry. I mean it shows how allergic you can be. Is it a great move? Well, you have your own take on this. I have my own. Will they appeal the core decisions of last week by the federal quarter, 10 days ago? Will they continue to delay in court? The delivery of the licenses by the minister, all this, we don't know. We also are in front of the CRTC with the more technical discussions regarding how should we connect the different networks, how should also have access to -- again, those are technical, but the fallback, the roaming, obviously, also all the tariffs and the tariffication will be a matter of discussion and eventually arbitration in front of the CRTC. So in a nutshell, we expect not being able to do it next week and probably not next month. But as soon as the CRTC and the other governmental authorities will move and make sure that competition will be brought for Canadians, we are ready to move.

And on your -- Tim, on your working capital question, I certainly expect the pressure on working capital to continue, stabilized but continue for all the reasons you brought up. They are the right ones. Obviously, the IP program and us building inventory in -- on many components because of lag times increasing. So I would certainly -- I think it's going to stabilize a little bit. It is stabilizing, but I certainly expect it to continue on to at the beginning of 2022, for sure.

Next question comes from Vince Valentini at TD Securities.

The first question is the $18.8 million, can you clarify, Hugues, is that all in the Wireless segment? Or would some of that be in Videotron wireline as well?

No, it's all in wireless, Vince. It's a reversal of AWS licenses that we had accrued for, for a couple of years. And our regulatory department finally told us that, that was a mistake, and we did need to accrue for that because we wouldn't have to pay for these licenses. So it was 100% reverse last year in the wireless business.

So if we take that headwind or onetime item into consideration, the typical question you get on wireless EBITDA growth, I assume it's negative year-over-year given that $18.8 million?

Actually, no. EBITDA growth is small, but it still is positive for the quarter, even accounting for this.

So the Videotron excluding wireless is down a few percent year-over-year then.

Right. I mean, it's pretty flat. I mean EBITDA is for us, it depends how you allocate certain network costs. But I mean, we -- even accounting for that, I think we're looking at flat and slightly positive on the wireless side. Flat on the wireline and slightly positive on the wireless.

Okay. And I hate to make you put on your history cap, but if you go back and adjust last year by $18.8 million, it would mean that Q3 '20 Telecommunications segment EBITDA was down about 0.6% versus Q3 '19. That seems to be out of line with the trend we saw throughout other quarters in 2020. Was there something unusual way back in '19 that caused EBITDA to drop in Q3 last year?

Yes. We had another -- this is the second year in a row of a one-timer, Vince. We also have a reversal of about 20 -- actually -- yes, just slightly over $20 million in the third quarter of 2019 as well. So last year was pretty -- I think from an operational standpoint, the results of Q3 of last year were pretty much in line. It's just -- we honestly got a bump in the third quarter of 2019.

Got you. Okay. That helps explain it. And my last question, sorry to go back to the same topic on the wireless expansion, but I want to add this a slightly different way, just to be absolutely clear on this. I think I asked a similar question on the last call. If there's another buyer of Freedom and therefore, another fourth carrier that exists in most of the rest of Canada, would you still intend to go forward as an MVNO and then build out a network over 7 years and effectively be the fifth player entering the market? Or is that -- is your plans contingent on seeing what happens with the fourth carrier before you decide on being number 5?

Vince, we appreciate your assumptions, but I think that's not going to be possible to answer quite -- we'll find out in due time about what's going to happen. And it would be, I would say, unappropriate, to answer these things that we don't know what's going to happen. Can you tell me if the Rogers transaction is 100% with done? I guess that some people would think, oh, partnering that could be a different outcome, I don't know. So for me, speculating on what's going to happen is not useful.

Okay. No, it's still fair, Pierre Karl. I agree with that. I guess, implied in your answer, though, is you are going to survey what does happen as we do get more facts over the next several months as opposed to clow forward no matter what. You're almost acknowledging your answer that things could change and we don't know how the world is going to unfold, and you need to assess as we go along. Is that not a fair interpretation?

Absolutely. I guess that you're right.

That's all I'm trying to get at. A dynamic situation, and we're all learning as we go. So I appreciate that color, and I'll pass the line.

Next question comes from David McFadgen from Cormark Securities.

A couple of questions. So just following along the line of questioning regarding wireless expansion across Canada. I'm assuming -- well, I shouldn't assume. Would you wait until you have a bundled product before you decided to go across Canada with wireless? And if so, I'm just wondering how that might impact your rollout because I know of an internet reseller, and he was delayed for 2 years by the incumbent to be able to resell their products. I'm just wondering if they could do the same with you and just really slow down your rollout.

Yes. David, I guess that, that will continue as my predecessors have been doing before. I would -- I'm not -- I don't think that it's appropriate to give us our strategy, our marketing strategy, and the different products that we will launch. But you certainly -- you know identify the different things that are available or possible. So I guess that what we should say is that in enhance our possibility of moving forward and the capacity to grow our revenues, and basically also justify even more than ever, our requirement to move forward outside of our historical Quebec base to continue to grow the company.

Okay. And just another question, just on the mobile ARPU in the quarter. But if you look at Q2, it was pretty much flat. It declined a little bit, again, Q3, I thought we sort of had hit the inflection point between the various ARPU profiles between Fizz and Videotron. And so I was just wondering, did that reverse a little bit? Or is there some other factor that's caused the mobile ARPU to decline about 1% in the quarter?

David, the main issue on ARPU are our more BYOD, it's more promotional activity. So pressure, obviously, on pricing, more increased percentage of growth from Fizz, so increased dilutive effect and also, as I said earlier, generally speaking, you'll remember, I mean, the back-to-school is not -- is a typically more challenging ARPU quarter for us. Last year, we lost 3 -- 4.3% on ARPU. And also, you'll notice that our equipment sales are down this quarter. So that's also part of the ARPU. So ARPU is a little bit less impacted by that. So I think, generally speaking, these explained, I don't think it's a reversal. I think we're still moving -- we're still moving towards the same stabilization that we've been talking about for some quarters and are certainly improving from the minus 4 and minus 3 that we have been living for the past few quarters before last quarter. So that's sort of what I would tell you on ARPU for the quarter.

Okay. And then maybe just a question on Capex. Can you give us an update on what you expected this year? And if possible, can you tell us what you expect for next year, obviously, excluding the wireless spectrum purchase?

Stability is the name of the game in Capex, David, for us. Our -- we're going to come in exactly where we've said we would for this year and are expecting also a very stable CapEx environment for 2022.

Next question comes from Matthew Griffiths from Bank of America.

I just -- sorry to ask another one on this national expansion issue. But correct me if I'm wrong, from what I heard you say, are you going to try to engage in -- once the terms and conditions are set, are you going to try to engage in negotiations with one of the national providers before you go about trying to maybe acquire spectrum from whatever source that might be and launch the network? Or are we to assume that you may invest capital in spectrum and other items and then down the road, start to enter negotiations to see what the actual kind of cost of the operating the facilities-based MVNO might be?

Matthew, the -- most of the spectrum have been acquired already. I guess that right now, is in a positive phase, where, again, Telus has been suing the government for bidding them to issue the licenses. We'll find out the outcome of that. We expect as the first decision has been unfavorable to Telus that we'll be able to move forward. But certainly, this is a condition to be an MVNO. And we look forward to how the conditions -- we should say that I already sent letters to the different CEOs of the incumbents, telling them that we would like to entertain discussions and negotiations regarding their access to the network. And basically, the answers that we received is that we look forward to continue the regulatory process, which is basically saying on the between the lines and stay tuned, and keep us in the lineup and the delay mode. So we look forward to have the proper decisions made by the regulatory authorities, namely the CRTC. The CRTC, we'll be able to move quickly, as again, I mentioned earlier, we don't control this, but we -- well, certainly do the proper representations entrant of the CRTC. And also, I guess, that's in front of the new government, well, which is not completely new. In fact, the industry minister is still shaping, and he's aware and he is the one that was occupying this function before. And I guess that everyone is looking at not to have more competition. So we're also enjoying a political -- favorable political environment.

Okay. And just a follow-up. So is it Quebecor's position that the 35 -- the 3.5 gigahertz spectrum that you have is sufficient to run a competitive network? And maybe just a follow-up too on the self-install rate. If I understood correctly, about 10% of Helix has been self-installed. And I just wanted to ask, is that meeting your expectations as you benchmark around the industry? Do you think that there's room for improvement? And is this -- this is like a source of potential margin improvement as these self-install and self-help kind of things can be expanded. How is that progressing generally as a bucket of potential kind of margin enhancement at Videotron?

Yes. I will start with the second part.

On the self-install, Matt. Yes, we're actually higher than 10%. We're growing higher than 10% on the Helix front. And that is definitely -- I mean, the 2 main drivers on margin at this point that are -- on which we're pushing as hard as we can are the self-install and the digitalization of the whole client contact experience. And so we're continuing on that. I mean, we're not happy to answer your question. We're not happy with being in the 10% to 15% range. We are happy that it's growing quite fast. But we need to do -- we still need to do quite a bit of work on that, but it will be definitely one of the big drivers, one of the big levers of margin improvement going forward as well as the -- what I said, the digitalization and also the simplification of our technological set of platforms and systems, which are being modernized and ultimately leading to a much simpler and a much cheaper maintenance and support type of agreements going forward. So we're working hard on all these fronts for margin improvement.

On spectrum, Matthew, we think that we have enough spectrum to start our business. Obviously, if we were to add more, it will be happier, but we think that we have enough for it to start with, as you know, the auction was quite competitive. We saw incumbents complaining that they pay too much for their spectrum and then -- but I guess that it's their own responsibility of doing this. There will be another auction taking place in the months to come. So that will give us also another opportunity. I think that what we should say is that we need to balance everything. And again, regarding the competitiveness of the auction, I think that we're at the right place, paying the right amount for the right size regarding our business plan at the beginning and where we're coming from and where we would like to go.

And the last question we currently have in the queue comes from Drew McReynolds from RBC Capital Markets.

Just one follow-up. Hugues, thank you for the stability comment on CapEx in 2022. I think that's appreciated among investors in Quebecor. I just wanted to drill down into what that implies in terms of the 5G kind of deployment or road map for 2022. Obviously, there's a ton of moving parts to wireless and to network sharing arrangements and all of that, but if you could just give us a little sense there, that would be great. Yes.

I mean, stability on all fronts. I mean we started -- Drew, we started on the 4, 4.5G LTE events, call it whatever you want. I mean we've been upgrading that and has started along quite some months ago. And we'll continue. And 5G, we've always said, of course, we will be there, but it's going to be, in our case, an incremental -- from a CapEx standpoint, it's an incremental program which does not destabilize everything. We're not talking amounts that are destabilizing any of the wireline programs in place and the other big-ticket items that we have in our CapEx program. We have reprioritized many projects on which we had been working and focusing on revenue-generating and growth generating programs, which allows us to use some of the puts and the takes to make sure that we, on the whole, keep our CapEx program pretty stable. So I think focus on LTE events, continuing to invest in 5G, but also on the modernization of our systems that I talked about. So I think we're focusing on the right programs. And there was an opportunity for us to clean up a few things and to be a little more disciplined in our investments. And I think this is what is showing now.

So that was the last question. Thank you all, and looking forward to talk with you in the next quarter.

Ladies and gentlemen, this concludes the Quebecor Inc.'s financial results for the 2021 third quarter conference call. Thank you for your participation, and have a nice day.