Quebecor Inc. (QBRA) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for standing by. Welcome to the Quebecor Inc.'s Financial Results for the Fourth Quarter and Full Year 2021 Conference Call. I would like to introduce Hugues Simard, Chief Financial Officer of Quebecor Inc. Please go ahead.

Ladies and gentlemen, good morning, and welcome to this Quebecor conference call. My name is Hugues Simard. I'm the CFO. And joining me to discuss our financial and operating results for the fourth quarter and full year of 2021 is Pierre Karl Peladeau, our President and CEO. Anyone unable to attend the conference call will be able to listen to a recording by telephone or webcast. Access details, as usual, are available on our website at www.quebecor.com, and the recording will be available until May 24. I also want to inform you, as we always do, 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. And over to Pierre Karl.

Merci, Hugues, and good morning, everyone. First off, we're pleased to have completed last December the acquisition of 294 blocks of 5G 3500 megahertz spectrum, with half of our investment in Ontario, Manitoba, Alberta and British Columbia. As we have said before, this spectrum constitutes the base of a potential expansion of our telecom services across Canada, should, of course, the still pending MVNO regulatory framework for wholesale mobile wireless services establish favorable conditions entering the economic viabilities of MVNOs. We are also still eagerly awaiting the competition bureau ruling on the Rogers-Shaw transaction, another opportunity to create real, lasting competitive dynamic, bringing the Canadians the benefits of technological innovation, superior client experience and lower prices as we have done here in Québec for many -- for the 10 years. Speaking of the competitive telecom environment in Québec. Our financial results for the last quarter and the year 2021 reflects these comparatively more intense promotional dynamics both in wireless and broadband, despite which we managed to generate increases of 5.5% in revenues, 1.1% in EBITDA and 5.3% in cash flows from operations for the year, with an increase of $25 million or 7.4% in cash flows in the fourth quarter alone. In light of these results and following our plan to gradually increase dividends to represent 30% to 50% of our net free cash flows, I'm happy to report that Quebecor Board of Directors declared yesterday a quarterly dividend of $0.30 per share on both Class A and Class B shares, up from $0.275, a 9% increase. Turning to operational matters and starting with telecom. Quebecor actively pursued its 5G deployment in the Greater Montréal and Québec City area, providing increased speed, expanded connectivity, minimal latency and opening of a world of opportunities for our customers. Moreover, the first phase of Operation High Speed, our project to deliver high-speed Internet to 37,000 households in several municipalities across the province, is proceeding well. In December, we connected our first homes in the northwest suburbs of Montréal, and the residents' response have been very enthusiastic so far, pointing to a successful program, for which I wish to salute not only our team, but also our partners, Québec government and Canada government for these important initiatives. Our Helix activations reached 157,000 for the first -- for the fourth quarter, representing our best performance of the year and the sixth consecutive quarter with more than 100,000 customers additions to our Helix services. Subscribers to our superior Helix service totaled over 1.2 million at December 31, 2021. In a market characterized by ongoing cord shaving and cutting, Videotron stands out with its ability to limit the impact on its video customer base due to its state-of-the-art platform and second-to-none client experience. Internet subscriber growth was 800,000 during the -- 8,000 sorry, during the quarter and 44,000 year-over-year, a performance that compares favorably to that of our large Canadian peers and competitors. Internet ARPU increased $1.33 or 2.5% over the last year. During the quarter, we launched many great features in the Helix ecosystem. Subscribers can now access Amazon Prime Video directly on Helix TV, control high-voltage thermostat by Sinope, a Québec-owned company, and control smart door locks by August directly with the Helix 5 app. On the wireless front, we posted 31,000 ads during the quarter. Despite the ongoing aggressive competition from the loading and renewal perspective, we are able -- we were able to improve our churn levels slightly for the quarter and captured once again the largest combined shares of gross ads in Québec with more than 32% for our 2 brands, Videotron and Fizz, according to the new ad quarterly tracking by Leger. This #1 position, which has been solidly established for several quarters, clearly demonstrated the strength and complementary of our brands, and certainly confirms Videotron as the leader in wireless services in Québec. In addition, I am proud to highlight that Fizz tops Leger 2021 WOW Digital Index, offering the best online experience in telecommunication for the third consecutive year. Consolidated wireless ARPU for the quarter improved to $0.28 or 0.7% over the same quarter last year. This increase is explained in large part by roaming and data usage revenues comparing favorably to the same quarter last year. With over 460,000 subscribers across Québec, Club illico continued to invest in the production of local, differentiated content from various horizons with the introduction of a brand-new content offer. In the fourth quarter, Club illico, in collaboration with Quebecor Content, launched 3 new original films and addition to new seasons of popular series such as La faille, [indiscernible] and Les honorables. Vrai, our new video subscription platform dedicated to exclusive unscripted lifestyle documentary and entertainment content introduced more than 35 new original productions in addition to acquiring some of the best international brands for nonscripted content in French, growing to more than 42,000 subscribers in less than 5 months. Vrai is a huge success and a perfect complement to Club illico, which is dedicated to series, movies and news program. Vrai is also available on QUB, Quebecor's integrated digital news and entertainment content platform an added value to the Videotron customers who do not subscribe to [ any ]. In our media segment, advertising revenues continue to increase, particularly in broadcasting, up 25% in the quarter and 30% over the year. We continue to invest in the wealth of new shows, original production and exclusive content in the fourth quarter to maintain our leadership position in the face of increased competition from offering on multiple platform. Thanks to our high-caliber original production and major television events, TVA consolidated market share reached to 38.8%, reflecting in part of a 0.5% increase for the TVA channel in a very competitive, again -- competitive environment from private competitors and our state broadcasters [indiscernible] Canada. MELS, our production and audiovisual services company, also performed very well, growing its revenues by 47% to $86 million and its EBITDA to $23 million for year 2021, its best performance ever. Finally, on the regulatory front, I would like to voice my concern once again about the unsustainability high burden placed on Canadian broadcasting companies. As video streaming subscriptions have now surpassed television distribution services, Canadian companies are operating in an increasingly precarious environment, a situation would lead to the weakening of the television industry and of local production. News, a vital pillar of a strong and healthy democracy, will suffer unless the CRTC lightens that burden. It is high time that we too enjoy the same regulatory and commercial freedom as the foreign web giants, which have been eating our lunch free of charge. I will now let Hugues review our financial results.

Merci, Pierre Karl. For the fourth quarter, Quebecor's revenues were up 3% to $1.2 billion. Revenues from our telecom segment grew 1% to $953 million, mainly explained by the wireless segment combining customer growth and higher revenues from mobile devices. Revenues from our media segment grew 14% to $212 million. Quebecor's EBITDA was down 5% to $499 million for the quarter. Our telecom segment recorded an EBITDA of $467 million, a 3% decrease compared to the same quarter last year as a result of some provision reversal, which impacted us favorably last year, and also lower margin in wireline and also on mobile devices sales, which also accounted on the top line. Our media segment reported EBITDA of $29 million, which was $17 million unfavorably to last year, mostly due to higher broadcast content costs, in part because of the late start of the NHL's 2020 and 2021 season. Quebecor reported a net income attributable to shareholders of $161 million in the quarter or $0.67 per share compared to a net income of $160 million or $0.64 per share reported in the same quarter last year. Adjusted income from continuing operations, excluding, as usual, unusual items and gains or losses on valuation of financial instruments, came in at $158 million or $0.66 per share, compared to an adjusted income of $165 million or $0.66 per share in the same quarter last year. For the full year, Quebecor's revenues were up 5% to $4.6 billion and EBITDA was up 1% to almost $2 billion. Revenues from our telecom segment grew 3% to $3.7 billion, and EBITDA increased 1% to $1.9 billion for the same period, with an overall EBITDA margin of 50.2%. Telecom CapEx spending, excluding spectrum, was down $56 million for the quarter as compared to the previous year, mainly due to timing of investments where we refocused on our strategic priorities, tighten our processes and operate more efficiently. For the full year, telecom decreased $59 million as compared to last year, while increasing investments in our LTE Advanced and 5G rollout. Our cash flow from operations for the year 2021 increased by $70 million or 5% to $1.4 billion, once again demonstrating the reliance and strength of our business model as well as continued operational and financial discipline. Cash flow from operations for our telecom segment also grew $70 million or 6% to $1.3 billion. As of the end of the quarter, our net debt-to-EBITDA ratio was 3.19x, up from 2.68x reported at the end of last year, mainly explained by the acquisition of the 3500 megahertz spectrum. Available liquidity of $1.6 billion as of the end of the year and our growing cash flows will continue to be more than sufficient to fulfill our commitments and continue to fuel our projects for growth. In 2021, we purchased and canceled 8.9 million Class B shares for a total investment of $282 million. Since we initiated our NCIB 11 years ago, approximately 49.6 million Class B shares have been purchased and canceled. We thank you for your attention, and we'll now open the line for your questions.

Right. First question comes from Jerome Dubreuil from Desjardins.

We were told the [indiscernible] the dividend being increased 9%. There were significant buybacks in the quarter as well. Nothing too dissimilar to trends we have been seeing before, but still I have to ask if we should read anything in terms of a signal regarding your willingness to expand outside of Québec. Has this changed at all since our last call in November?

Yes. Well, no, I guess that we were quite clear regarding what we were considering a more [ dull overall ] situation in terms of payout. This has been mentioned a few quarters ago. We do not expect changing our policy. So basically, this is why we've been -- the Board of Directors decided that we should continue to increase. Probably the increase is a little bit lower than some of you would expect it, but it's in line with the policy that we established previously. For the out of Québec or rest of -- this depends you want to call it, expansion, again, I would like to refer to my introduction and my speech, basically saying that we're expecting to know at this stage. Unfortunately, we're clearly in the dark. But we expect the CRTC to come with the proper framework to make sure that it will make sense with, I guess, the overall policy to improve competition in Canada. There is no doubt that the proof has been made in Québec for the last few years -- well, it's more than a few years now. It's been a while. So should -- we should think to me that it's loud and clear that the fourth competitor would be the best vehicle to make sure that Canadians will enjoy a more competitive landscape.

Okay. That's very clear. And then a second one, if I may. I was recently looking at public pricing on the website, and it appears that the gap between the pricing of Videotron and that of others has somewhat closed recently. Wondering if that means you are starting to get more comfortable with the current market share and if we should expect the company to enter a new phase in terms of its wireless strategy?

Well, you know what, Jerome, I guess we should say it's a very volatile environment. I got it in front of me, experts from 2 newspapers, today's newspapers. One is from the Toronto Star, and the second one is from Montréal Gazette. So in the Toronto Star Page 8, 7, so we have an ad from Bell, which is [ purify ] the faster Internet technology starting from $84.95 per month. This is more -- this morning in the Toronto Star. I look at the Montréal Gazette, and I got an ad from Bell, Québec fastest ranked Internet starting from $59.95. So you can see the difference is about, what?

$25.

$25. And just beside the Bell ad, we got a Virgin ad, which shows unlimited Internet for a sweet price of $39 per month. So it shows how the ecosystem is competitive in Québec. And also, the sub-brands in the Internet has been certainly adding an effect overall and probably also the Internet margins that we're able to deliver. So will this competitive environment will remain, this, obviously, we don't know, but we will certainly continue to offer what we consider being the best customer service with the best product. This has been the successful recipe for Videotron for the last over 15 years. And I guess that right now there is probably no real reason to change our positioning and marketing strategy.

Next question comes from Tim Casey from BMO.

A couple for me, please. Hugues, could you talk a little bit about -- maybe just sort of walk us through the EBITDA performance in the fourth quarter? It was certainly below consensus. And you mentioned a couple of items, but could you maybe walk us through what led to that and what the outlook going forward is, particularly on the telecom line? And I was wondering -- I know you don't give guidance, but could you provide some sort of color on what your expectations would be for CapEx, cash taxes and cash interest in 2022? And then finally, for Pierre Karl, the discussion of relative pricing for wireline in a couple of markets, there's a number of products that are priced differently across the country. I'm just still struggling with what is the game plan for expansion outside of Québec on the wireless side? And it's -- we've debated this since the deal was announced. But I'm just wondering, how is your thinking evolving there because the market is clearly struggling with what the end game is for Quebecor.

Okay. Tim, I'll start with your first question on EBITDA. So the story of the quarter basically on EBITDA is a couple of things. Starting in margin, you will, I'm sure, have seen the wireline margin, both broadband and cable. Broadband, it's more of a matter of the margin, if you look at it in detail, not really growing as much as we have grown accustomed on the broadband. And most of the -- the main reason for that, and it's hitting us increasingly, it has been hitting us increasingly over the past few quarters, and I think it's coming out even more clearly in Q4. And the first reason for that is the increasing proportion of the growth in broadband being attributable to Fizz. Fizz, we talked at length of Fizz and our success in wireless. But Fizz is a huge success as well in broadband. Pierre Karl just mentioned to you all these prices. I mean the market seems to be very, very different, obviously, in English Canada than it is in Québec. But what we're living in Québec is very clear. I mean people are pricing down. And where we're seeing growth, where we're really successful is with Fizz. And I suspect that this is something that's going to continue. We don't see any -- we certainly don't see any reason for this to suddenly turn around. And we see -- so our growth being increasingly due to Fizz as opposed -- at a lower price point, obviously, as opposed to Videotron. Then of course, the ARPU for -- and the broadband ARPU for the quarter is mostly flat compared to growth that we have seen for a few quarters ago, and that was increasingly disappearing. Don't forget as well that we are comparing ourselves with a quarter in 2020 that was very, how would I call it, stable, much fewer disconnects. If you look at it, I mean we are comparing ourselves with this year in terms of growth in broadband. We're comparing 44,000, right? For the year, we're comparing ourselves with last year with 69,000. But in 2019, it was 23,000. So let's not forget that 2020, both the year and the fourth quarter, were also a little bit unusual comparable, right? Turning to cable. I mean cable is -- I mean there's nothing new in cable TV. Cord-cutting and cord-shaving is clearly continuing, but I think you have to look at our performance. If you look at other cable cos in Canada, whether it's Cogeco or Shaw's performance, and if you look at the U.S. as well, cable cos, you'll see that we're managing the situation comparatively well. But I think all of that to say that the first story, I think, or the first explanation in profitability for us in the quarter has to do with margin, wireline margin. Now of course, in terms of OpEx, there is a -- we are -- we have put in place many cost-reduction initiatives and they are ongoing. But I think we have to realize that we're in that, what I would call, sort of that in-between phase where we've added -- to be honest, for the past couple of years, we've added platforms, we've added networks. And we are transitioning, we are migrating a lot of our customers, a lot of our subscribers from one platform, whether it's Helix, whether it's -- I mean there are a number of initiatives on the go. And we're in that sort of in between, Tim, that in-between phase where we've had a lot of cost structure and we haven't -- well, we've taken some out, of course, but not as much as we would have liked. And perhaps it's not going as quickly as we would have liked. We'll own up to that. But the fact is that we're not done yet, and we're still in the midst of that transition and that migration, that is, in terms of maintenance costs, in terms of support costs, in terms of licenses, in terms of people is really costing us quite a bit. So this is what I would really point out in terms of EBITDA story for the quarter. In terms of CapEx, I think you asked me about CapEx. Capex, I think it's important. It's continuing to come down, continuing the same trend as the previous quarters. A couple of things. I mean of course, you know that on equipment, that transition that I talked is -- so certainly, the Helix migration, you'll remember that we moved from a more CapEx-intensive to a more OpEx-intensive model. So certainly, some of that CapEx decrease is naturally just linked to equipment. Another big one is self-install, where we continue to increase our performance in self-install and have been able to really lower our insulating CapEx significantly are increasing. And we're up to 63% of self-installed. So that's -- I mean that's -- we're very, very proud of that performance. And it's finally leading to the results that we had been expecting. I mean there's still aways to go, of course, and on the digitalization of our client journey and all of that. I mean we're still, as I said, quite a few initiatives still on the go. But the self-install is certainly a great success that's certainly helping on the CapEx side. More generally, though, I have to be -- we've talked about this in the past, and I'll repeat it. More discipline in terms of number of projects, the scope of CapEx projects that -- and the prioritization. As I'm sure you know, companies like Videotron and other telecom, we have a lot of growth-related, a lot of strategic projects that gets underway that get analyzed, that focus the time of a lot of people and cost quite a bit. And I think we're gradually being a lot more disciplined about this, as I said, in terms of number of projects that are started, the scope of these projects and a more efficient prioritization of these projects, leading to us being able to focus more on the growth and the projects that are linked to growth or impact on margin that we hope to continue to, over the year in 2022, deliver. As I said, certainly, I think the -- our lower CapEx should not be in any way interpreted in the way that we're not focusing on these growth and margin-related projects. I mean LTE Advanced and 5G, as I said in my speech, is certainly one of the big ones that we are maintaining and, in many ways, increasing. So I think that covers that. I think you -- in terms of guidance, well, -- in terms of CapEx, I think our guidance at this point would be more of a stability on the CapEx front. For all the reasons I've just mentioned, Tim, whether it's the equipment, whether it's our performance, whether it's our discipline, we believe we're in a situation to be -- we're managing the situation better. And I think we can look at stable CapEx for 2022. I won't give you more -- any more guidance on EBITDA, of course, other than I think you've asked about there's nothing -- I don't think there's any change that you should take in your model in terms of cash taxes and other cash flow-related items. I think -- again, I'd point to stability on those fronts. Does that answer your question?

Yes, we'll continue on top of -- for your -- the last piece, yes, of your question, Tim. Well, first of all, I'd like also to reemphasize what Hugues said on the CapEx. I think it's worth to mention this discipline is certainly not to the detriment of our 5G deployment, our LTE Advanced also. So we will continue to make sure that our network as our -- and this was part of our strategy and industrial/marketing strategy for the last decade and more, that our product was one of the best, if not the best, in the marketplace. We intend to do the same in the wireless business. You know that we were looking to -- because I think it's the best thing to do regarding the Canadian landscape, so we were expecting to build our network together with Rogers. For whatever reason, which, as you know, we claim right now, former leadership, I would say, decided that it's not the way to go. We expect that the new leadership will review this position because, again, we still think that it's the best way to go. But no matter what is the case, we will continue to make sure that our network will meet customers' expectation and technology requirement to serve. On the out of Québec or Rest of Canada strategy, Tim, I should emphasize the fact that we got everything. First of all, this is why we participated in the auction a few months ago. So we have the base of our future development because we bought spectrum in the markets where we expect or we think there will be interesting growth to take place. Is it necessary to mention that we have all the other assets as an operating company? So all the expertise, all the billing systems, all of what is needed to be a telecom wireless company is under a long-time experience and success of a telecom operator. The missing piece is the regulatory framework. We look forward to get the price. Obviously, everything will depend on the price that we will need to pay for this transition from MVNO situation to a full facility operator. As you know, and this is different than the TPIA framework, we need to build our network. So I'm not saying that we have a free lunch for the first year, but we have certainly a favorable environment if the price was to be right. And again, it will depend of how strong is the desire of the state regulatory bodies to make sure that Canadians will enjoy competition. But we only have a button to push if we look to move forward in the wireless business for certain other regions in Canada. And we look forward for the CRTC to try to hurry up this exercise, which is, as you can imagine, being slowed down by the incumbent that do not want to see competition.

Next question comes from David McFadgen from Cormark Securities.

A couple of questions, if I may. So just looking at the telecom business. You talked about margins being down on wireline, I guess, due to the success of [ civs ]Internet. But I was just trying to, as always, segregate the wireless and wireline. So it would appear to me that wireless is probably flat on a year-over-year -- the wireless EBITDA is probably flattish on a year-over-year basis in the quarter. Is that a good way to look at it?

The wireless EBITDA, David, you're referring to?

Yes.

No. The wireless is growing. We don't separate it, as you know. But no, no, it's definitely grown.

It's definitely grown. Okay. What...

Oh, yes.

Would the growth have been double digit year-over-year?

We're -- yes, we're very close to double digit. We're in that range, on wireless EBITDA, which leaves obviously, the math being the math, to what I said earlier, that pressure on wireline for all the reasons I talked about. But I think our performance is, honestly, David, is more challenging in wireline and has been for some months now, whereas I think wireless, our growth is pretty good. And ARPU is -- has grown a little bit this quarter despite what the fact that same as my argument that went for broadband also goes for wireless, of course. That most of our growth, a good chunk of our growth in wireless comes from Fizz as opposed to Videotron at lower price points. So there's a natural erosion as we have lived through in -- for many quarters on the ARPU. And now this quarter, we're seeing a little bit of an increase in ARPU. I mean ARPU is a bit of a different beast, as you know. With in our case, with less of our growth coming from equipment-related packages, so maybe I'll say differently, more of our growth coming from BYOD, obviously, there's that impact on ARPU. But as we don't really think in our business that ARPU is the right way to look at it because we love BYOD. We -- our margins are really, really good, and it keeps us out of that subsidy game that, as you know, is -- can be quite expensive, although there still are quite a few subsidies in this quarter as you saw it yourself. So we're not completely out of that game, but BYOD has certainly helped us.

Okay. Because when you look at the supplemental, it just discloses mobile ARPU, so...

Yes. Yes, we're going to -- that's -- we were talking about this. I think we're going to do like some of our competitors and go more towards the -- go back, I guess, to the ARPU discussion that we used to have in the past, which I personally feel is a bit more telling in our business.

So I know you don't like to provide guidance, but would the fourth quarter wireline results be sort of a new trend that we should expect into 2022 and beyond, like just with the margins being down a little bit?

Well, it's an ongoing -- David, I'm not going to blow smoke up whatever part of you you'd like. But I mean the market is not going to change overnight. It's a tough market. [indiscernible] this is a very competitive market. It's a price -- lot of pressure on price in wireline. Well, in wireless, yes, but that has been ongoing for some time. And that seems to be quite different from the market in the rest of Canada, but we don't think we're going to be the last country in the world, when you look at what's happened in the U.S. and in Europe and all the other countries. So it's not unexpected. I think it's going to continue to be quite, quite competitive. Our main competitor in broadband is continuing to be very aggressive. So yes, I would more point out towards a continuing environment. That being said, I pointed out to a lot of cost initiatives that we're still working on. And as I owned up, maybe we haven't delivered as quickly as we would have liked, but we will get out of that sort of in-between stage that I talked about earlier with Tim. And I think there still is quite a bit of runway on the margin and the EBITDA growth from it.

Okay. So maybe a question for Pierre Karl. I mean can you give us an update? I don't know if you can, but can you give us an update on your discussions with the Competition Bureau regarding the Rogers-Shaw transaction? And maybe -- I don't know if you can, but if you could share us whether that's sort of the outcome that they would like to see.

Well, David, not really, I would say. We are obviously answering questions from the Competition Bureau. I guess they're looking to have as much as information as possible. And they certainly consider that we would be a good stakeholder to "educate" them on the market wherewithal. So -- but certainly, tough to find out. We're not going to try to read in tea leaves. I don't know if I can say that, but I guess that the landscape has been quite clear that the fourth competitor is certainly something that shows competition bringing some significant advantages to customers. This philosophy will remain also in terms of competition. There's always a few different perspective for interpretation of the law. But we'll see, we'll see. And I guess that the conditions are certainly very strong for this part of the transaction significantly reviewed by the bureau.

All right. And the last question we currently have in the queue comes from Drew McReynolds from RBC.

A couple of follow-ups here. In terms of fiber-to-the-home expansion in your cable footprint, obviously, Bell has done 3 chunks of urban markets over the years. Has there been any incremental impact of that expansion from a competitive standpoint? And then Hugues, just with respect to provision reversals, we're kind of comping off some choppiness here as we kind of look out quarter-by-quarter. Should there be additional kind of provision reversals going forward? Just provide an update there would be helpful.

Sure. I'll answer your second question first, Drew. No, you shouldn't get bogged down in provision reversal. Year-ends are always, whether it's bonuses or readjustments after as we're coming out of the pandemic for bad debt adjustments and things like that, but it's not -- it really should not -- I mean that's not the story, and I'm not going to hide behind any of this. And there shouldn't be -- I mean there's nothing ahead of us that -- or that's holding ahead of our -- on top of our head or anything like that. So I wouldn't put much focus on that. In terms of FTTH, yes, Bell, as you know, has continued very aggressively its FTTH deployment. But we -- as we said in the past many times, we believe we have the flexibility due to our technology to be able to go to the node as opposed to the home, in many cases, and deliver very -- not only very similar, but comparable performance as opposed to having to go all the way to the home because of coax. That being said, we do, in a lot of our extensions, we do go all the way to the home when it economically makes sense for us, and we have done so in many cases. So I mean there's some obviously higher cost as related to the going FTTH, and Bell has certainly played very well that game over the past few years. But we believe we've been a little bit more, how would I say, not surgical, but a little bit having the opportunity of being a little more intelligent and economically prudent in our deployment. And that's been positive for us while still continuing to deliver the same performance in these new -- in these neighborhoods and in these nodes.

So our understanding, Drew, is that the FTTH footprint of Bell basically cover all our footprint. So is there a "threat" that we should expect on deployment of new technology. We don't see it. And as you said, its FTTH deployment was very expensive. If we're about to do so, we do not know what is the impact of Bell in Québec. As you know, there is no breakdown between Ontario and Québec. So when we compare -- we know that they're losing significant amount of customers regarding their satellite service, but we do not really know where the small increase of fiber subscribers are located. From our standpoint, that -- also what Hugues said, and this is the North American situation, cable subscription out of this phenomenon, which is whatever, is shaving or cutting or network -- significant. We don't know some young boy or a young lady, 18 to 20, will certainly -- well, there's a high possibility that getting out of home will not subscribe to cable. Obviously, they will subscribe to wireless, and we are there to offer all sorts of good products, whatever it's Videotron brand or Fizz, and digital or a conventional through call centers, service and products. We're all doing this. But something, again, that is unknown is the performance of Bell on Québec. I guess that if they don't want -- if they are not breaking down the numbers is that basically probably because they do not have good numbers in Québec.

Just 2 very quick follow-ups, if I can. On wireless ARPU as we kind of look at Q4, but probably more importantly, 2022, just remind us where we are in terms of kind of where roaming levels sit and kind of if there was any impact in the quarter or Q1 of this year in terms of renewed restrictions in Québec. And then my second follow-up, just in terms of the government programs and the footprint expansion, when do you expect to begin kind of loading? I think you alluded to a little bit of loading in Q4, but should this be a steady kind of ramp-up of footprint penetration as you go through 2022?

Drew, so on the ARPU, yes, I think your question, if I understood it correctly, it was more specifically related to usage revenues, right?

That's right.

Yes. So what went on the way down is certainly the same amount on the way up. You'll remember that we had made the comment that compared to some of our competitors and larger peers and competitors, we did not decrease as materially as they did in terms of usage revenue. So now we're obviously not benefiting from that same swing back up. So it really wasn't material for us. And so I can't really argue that it is -- that is going to continue to be. So I don't think that's going to play much or have much impact on the ARPU going forward. I think it's -- in our case, it is continuing to grow ARPU on all of our platforms. And as I said, I mean Fizz, we had a very -- I won't give you the number, but we are continuing and it's continued to -- the increase in ARPU is actually increasing. So that's good news. And so we'll have a little bit less of that impact that we keep talking about on the overall ARPU going forward. So those would be my comments on that. In terms of the government programs, the 37,000 doors or addresses that we will deliver, yes, we've delivered some, but very few, to be honest. And these will come in on stream more gradually over the next 6, 9 months. I mean by the end of September is what we expect that we will have delivered all 37,000.

Okay. And one -- I promise, my last one. Just back to the ARPU, the roaming impacts for you, just remind us kind of where we are on the roaming side. I know it's not a big revenue stream, but...

I'm sorry. I didn't hear your question. I'm sorry.

Yes, just like international roaming, any roaming revenue that you get on wireless?

International roaming...

Oh, I'm sorry. Okay. For some reason, I couldn't hear you very well. I mean there's -- yes, I mean some international roaming is back. But as I said, I mean it's not -- it wasn't -- it's not a huge percentage of our ARPU and much lower than our competitors. And so some of it is back, yes, and certainly in Q4, that's helped us a bit. And there's some of it in the $0.28 there. But again, it's not the main factor.

As I joke, I would say, Drew, that there was a lot of Québecers that went in Florida during Christmastime. And they all caught COVID. So they stayed probably longer, so this is why roaming revenues went up a little bit. Don't believe everything I've been saying.

We just have one last question. It's Jeff Fan from Scotiabank.

Most of the questions have been answered, but I do want to clarify on a couple of things. And the first is on the cost and the margins for your wireline business. You mentioned Fizz ARPU or Fizz having an impact. I'm interpreting that to be cannibalization, meaning like you're adding Fizz subscribers at a lower ARPU and perhaps some of these are coming from Videotron, stepping down. Am I correct in interpreting that? Is that happening in your base? It didn't seem to be as much of an issue in the past, so I'm just wondering if you can elaborate if that's a cause.

Well, I mean there's some cannibalization, Jeff. I'm not going to tell you that there's none, but that's not the main factor. Yes, there is. As we're growing Fizz more faster, yes, it's taking some from Videotron, for sure. But I think it's been taking a lot -- and we're talking wireline, right? We're talking broadband now. So it's been taking a lot from the TPIAs, I mean let's be honest. And it's been taking some from some of the other sub-brands. So that's where it's performing most. I mean there is some cannibalization. But as you said yourself, it's no more material today than it was in the previous quarter. It's just -- my comment was more just mathematically because most of our growth in broadband in the quarter was the result of Fizz new adds as opposed to Videotron at a lower price point, then that's put pressure on our numbers.

Do you have efforts in place to try to uptier your service and focus more on the Videotron brand to turn that ARPU trend around?

Well, yes, I mean we're -- as you know, Jeff, it's not -- I mean we -- we're positioning our 2 brands very differently, and we are focusing on different segments of the market and different geographies and demographics, of course, with Videotron being on the -- performing better on the higher end and -- or the higher price points and Fizz on the lower price points. But so what I think both Pierre Karl and I have pointed out a number of times, I mean the market is -- it's a competitive and it's a price-sensitive market that we are living in. And in broadband, it is increasingly favoring performance by Fizz because that's where we're positioning it. And we're more aggressive to do exactly what you pointed out at the beginning, to lower as much as we can that cannibalization between Videotron and Fizz.

I would think that we certainly not invent sub-brands. You've been seeing sub-brand, low cost in the telecom business everywhere in the world, and I guess in other industries also. So that was certainly a missing part of our offering, and this is why we launched it a few years ago. Were we expecting a certain amount of cannibalization? For sure. What we can say right now is that this portion is certainly much smaller than what we are getting out of the entire market. On the premium side, on Videotron, we've been playing the quadruple play for a long time, as I guess that's what's Shaw has been doing in the web when they were in a competitive landscape. So again, as what you said is a different market being addressed differently where the Fizz brand going in the sub-brands market and they're sure that there's [ profile low ], not on the wireline side, but there's certainly Virgin and many others, TPIAs, where the other sub-brands in the wireless are also numerous.

Right. And then thinking through costs. Helix migration seems like a big number this quarter and a big number for '21. That must have been a big contributor, if I interpret your comments, to the cost because of the platform costs that you have to pay Comcast for that service. I'm also interpreting that those migrations are not necessarily coming with incremental revenue. It's had that big of an impact on margins. Am I reading that correctly?

Yes. Yes, you are. But you are -- just before I answer that, though, I just want to make sure that on your previous question -- because one thing I didn't say is that the Fizz margin keeps increasing, right? So of course, there's some cannibalization. And of course, we're not going to -- we have 50% of the broadband market or thereabouts. So of course, there'll be some cannibalization on Videotron. But margin, as Fizz takes a higher proportion of growth, its margin keeps increasing. So just so that's very clear. Now moving on to the migration, the Helix migration that you're pointing out. That's exactly what I was saying when I talked about platform and I talked about cost. It isn't that -- I think it's important when I say it is a somewhat expensive migration for us, especially while that migration is ongoing and before we can take out entirely the cost base that is linked with our more legacy systems and our legacy platforms. In terms of ARPU, Fizz is a different -- it's a premium product. I mean it's got more functionality, maybe I'll put it that way, so in many ways can point to higher ARPU. But at the end of the day, we're living in a competitive market where our main competitor is, in many areas, reducing prices and offering its platform at lower prices. So we have to respond and we have to play the game. So when -- and I believe we've been -- in terms of growth, in terms of net adds, I think we've been playing it rather well while keeping an eye on that margin that I talked about. So I mean it's a bit of a balancing act. And we'll continue to balance these 2 things going forward.

And just to follow up on -- with Pierre Karl to -- just 2 quick ones to finish off. It sounds to me, Pierre Karl, that you are now more focused on the MVNO path to expanding outside of Québec for wireless as opposed to acquiring Freedom assets to expand. Am I reading that correctly? Meaning that if you are not successful in acquiring Freedom that the MVNO is the path to go?

I would say not really, Tim -- Jeff. I guess that there are 2 fronts there. One we spoke about earlier regarding the Competition Bureau, so we're going to wait until the end of this process, which is facing another process with the CRTC. So I guess both work in the same direction where, I guess, Canadian needs competition. On one side, we have the assets to start -- and again, depending what will be the tariff that we will face, we have a good idea about tariffs. We know what tariffs are in the U.S., and we have also intelligence elsewhere in Europe because MVNO is not something that started yesterday. It's been there for a very long time everywhere. So we hope that the CRTC will listen to our representation because this intelligence is shared with them, so making sure that if -- again, they really believe that they're looking competition and this is obviously why they decided that they will go with this decision last July. And therefore, let's make sure that all those conditions will be there. So overall, I would say it's a win-win situation. Both perspective are favorable to Quebecor.

All right. That was the last question we currently had in the queue.

Okay. Thank you very much to all. And let's talk together at our next quarter meeting.

Ladies and gentlemen, this concludes Quebecor Inc.'s Financial Results for the Fourth Quarter and Full Year 2021 Conference Call. Thank you for your participation, and have a nice day.