Tele Columbus AG (TC1) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. This is Carmen Becker speaking, and it's my pleasure to welcome you in the name of the Tele Columbus management team to today's conference call following the release of our third quarter results for fiscal year 2024, which ended on the 30th of September. This call is limited to 120 minutes. In case of any follow-up questions, please let me know. I'm here today with Markus Oswald, Chief Executive Officer; and Nicolai Oswald, Chief Financial Officer. Now I would like to remind you that if any lenders or rating agencies are on the call right now, that this is a public conference call in which only publicly available information will be discussed. I would therefore ask you to refrain from questions containing information and belonging for the public domain. This conference call is intended for capital markets participants only and not for press representatives. If any journalist is on the line right now, we would highly appreciate if you were leaving the conference call now. Press representatives are welcome to call my colleague, Sebastian Artymiak, to discuss any outstanding questions. Having said that, it's my pleasure to hand over to you, Markus, the floor is yours.

Carmen, thank you. And yes, good morning to everybody on the line. Yes, first of all, I have to say again that I'm now with CFO, Nicolai Oswald, beside me and not interim anymore. So Nico, welcome into the company.

Thank you.

Some of these questions might also arise in the past. Now we are again complete on the Board. And let me introduce our call. So we will start with key messages as usual, operational update on KPIs, and then I will hand over to Nico on the financial performance. And then both of us are available for question and answers. Key messages, an overview about operational, financial and liquidity. So yes, the quarter for us is completely the future quarter. It lays down the ground. And for us, future is IP growth for the company. And again, we had an outstanding IP sales performance in Q3. TC is still fastest-growing IP operator. And to be honest, the gap between competitors is growing right now. So that was a fantastic job in Q3 by our teams. Again, also the KPI is in that number. So we have a higher bandwidth again, so 50% of our gross adds. The customers are opting for 500 and 1-gig product. And throughout the support of the TV migration, we have a 3P push on the IP numbers as well. And looking at the IP -- looking at the TV migration, I would say we reached benchmark levels or normal -- or the level, which also our competitors who are facing the transition as well. So we are now at a number of 49% of our retained TV customers. More details later on. And this is for me also fascinating to see and obvious. When you look at the unique subscriber base, we are now more and more moving to a 3P provider. What I said on the Capital Markets Day in the other calls, a little bit also our hidden sales channel, which is base management is now getting stronger and stronger, thanks to the team here as well. And we are now having 2.2 -- something around 2.2 RGUs per unique subscriber. Coming to the financials, and these are numbers, of course, impacted by our TV migration. Revenues down to EUR 325 million throughout the migration, which is not yet compensated by increasing IP sales and the stable B2B revenue. Reported EBITDA down to EUR 105.5 million, strongly impacted by our nonrecurring activities, which was the completion of the A&E transaction, which is still the TV bulk migration and which is still even that a lot of topics are not completed, but Phase 2 is now in front of us, the NetCo-ServCo transformation. Normalized EBITDA stable on a year-on-year basis with EUR 141.6 million despite the TV revenue losses. And CapEx, excluding leasing, increased by 19%, of course, because of our investments into the network and in our consumer growth or customer growth, making the TV migration possible and making the IP growth possible. Good signs on the liquidity cash position of EUR 58.4 million as of September, with an undrawn shareholder loan of EUR 105 million. Liquidity position is better-than-originally planned, primarily due to strict capital allocation investments and improvements in net working capital, which was made through our teams possible during the course of the year, and we have a focus on that as well for the upcoming quarters and years. Looking now deeper into our operational updates and KPIs, what we achieved in the first 9 months of the year. So good to see and a good indication coming from DOCSIS 3.1 but as well from our fiber rollout. Strong IP performance continues. Like I said before, FTTH penetration shows great uplift in housing upgrade segment. I will come later on to that. Continuous efforts, of course, for -- during the bulk migration and actually having a ServCo and the NetCo in place, what does this means for our future, I also will comment on that. Coming to Page 8. Of course, I love this chart, best-in-class IP growth rate with increasing gap to our partners, 13.5%. I mentioned it before the quarter. Actually, we -- normally, we expect that some of these 13.5% grows a little bit earlier, but it was linked really for making gross adds possible from the 1st of July onwards because we approach a lot of our customers until -- in the first quarter, and they are linked there starting with IP customers contract with the single -- start of the single TV customer contract. And here, we see that huge push on IP. But nevertheless, it is the strongest growth since 2022. And now we are really fourth quarter in a row in double-digit growth, and this makes our future story. This is exactly what we aim to do also in the next quarters. Going a little bit deeper into these numbers, we see that huge uplift in Q3 on Page 9 in comparison to Q3 '23 and also a double-digit in the revenue growth on a year-on-year basis. So this is a fantastic compare, and we will see it later on also in our financials. I think it's something around EUR 20 million. We see here year-to-date '23 -- '24 comparison to '23, an increase in our service revenue based on IP supported by our IP growth. Also deeper into the numbers. Internet individual. This is what we are looking for because here, the service revenues in -- we are progressing into the next step into 700,000 digit numbers. So this is not far away in our expectation, reachable till the end of the year. In these 681,000 IP customers, they are incorporated a little bit more than 10% out of RGUs, which are linked to our FTTH rollout. I will come later on to that because this also supported -- or will support our future growth path. Here, the penetration is higher, much higher than the overall penetration we are facing where we are getting our growth on with right now, 45%, even growing quarter-by-quarter. I will show this a little bit later to you. Yes, I think these are the main numbers. We now also adjusted our product portfolio, which we do on a regular basis. And all IP products now include telephone line with fixed net flat rate. Like I said before, the numbers in these gross numbers are looking also very good. So 53% right now on our gross rates [ tape bandwidth ] is higher 500, so 500 and 1 gig. Looking also on our base, there is still uplift to grow. So gross adds by more than 50%, but based on that high number is something around 30%, I have in mind. And this means transition at higher ARPU will follow by working with base management. Of course, on the 3-Play basis, by the net sales, we are a little bit lower, which was linked to the first go of the bulk migrations. Now we are working by -- with our sales teams to go through our base here again and again, doing blocking works. I come later on to that on the migration fast, but we expected that 44% or a little drop on the 3-Play basis as well. On Page 12, we show you a little bit more insight on our work on FTTH. So let me run you through that slide. So first of all, on the left-hand side, FTTH total. We have an RGU base in FTTH on IP by something around 71,000 customers on a base, still steady growing of near to 160,000 households. So this leads to 44.9% of penetration. Coming to near to the middle, the green bars and so on. Here, you see our total IP penetration number of 20.7%, which means that on the DOCSIS side, we are even lower on that number because this number is as well supported by that 44.9%. And when you are now looking what is the mixture in FTTH, first of all, we also do by some infrastructure projects, some greenfield approaches, Lörrach, Plön and so on and so on, where we are working, Markt Indersdorf here in nearby in Bavaria. So here, we reached in the past and still growing 45.7%. In -- our contracts FTTH upgrades linked with housing association contracts where a house is completely new build, we are seeing 49.8% of penetration. And I come later on to the FTTH share graph on the right side because if a project is upgraded or a house is upgraded, it still needs time to develop a higher penetration. But in new build, where people move into a new building, we reached immediately really high shares of higher than -- something around 70% and more. Housing upgrades. This means where we change from DOCSIS 3.1 to FTTH, we already see a penetration of 43.4%. And now coming to a cohort, which we subtracted out of our system and which shows what penetration path we are facing to reach 43.4% and more, don't be confused. Here, it is just a cohort of 35,000 homes connected out of these blue cohort on the -- in the middle of the slide. We looked here in this 34,000 homes connected households. We upgraded the network from July '23 to June '24. When you look now down, you will see exactly for that cohort, the FTTH share on the bottom of that graph, which goes up. So we started in Q1 '23. Like I said before, we started the upgrade in July '23. So now 0% FTTH share Q1, Q2. And then we started upgrading the households, 20% Q3. We reached 58% in Q4, 77% Q1, and we finished the upgrade of the 34,000 households in Q2 '24. And look what takes place with the penetration. Without uplift or without the FTTH upgrade, we have a 1 percentage change in penetration quarter-by-quarter. FTTH steps in with a remarkable share of these households. And then we changed on a quarter-to-quarter basis to 3% or to 2%. So there was a lag in Q4 to Q1, but then we changed again to 2%. And this will go on. So what we expect and see by the blue column more in the middle that we will and see the trend towards 40% and even higher. And this is the whole story and strategy of the company. Together with the housing association, find a plan when they want to build up, when they need to build up, when they renovate their household, headquarters or whatever in the city and then be their partner building up FTTH, inform together with the housing association their tenants, and then penetration goes up. And this is exactly which supports our penetration rising project, we would say, by the growth of our point of sales, let it be on retail, let it be on sales agents, we are -- our growth path is supported. And in addition, our growth path is supported by these FTTH projects. So even here, an acceleration of growth on the IP side will be seen in the future. When we look at our bulk migration, this is -- everybody knows that this is a fact. It happens this year. We will work on that. Sorry, I was a little bit confused with my printouts here. So when we look at Page 13, we see that we started on a bulk migration, potential households with nearly 1.2 million households. The number changed a little bit, thanks to one of analysts on that questions come because we also lost some of these customers. And what we are looking here of retained customers, we are only facing a potential where we can play. So I think the number was before 1.19 something. So there was a loss of contracts here. We gained -- at the end, we have a stable and steady rising customer base with housing associations, but especially here in that cohort or in that ground, we lost some of these contracts. So there is no bulk migration anymore here. And so we retained customers. Retained customers, 49% right now. This is what we are aiming to be till the end of the year, retain this, subtract or addition between single contracts and also contracts which stay in a bulk similar or equal model. And we will, of course, be in that footprint again and again and for that, which is very important and would have the biggest impact on these customers. We phase right now, we call it our disconnect or blocking project, which we already did in the past, '24. We will continue into '25 to block these customers. We will see an uplift because also, if you are an unknown, we call it as well [ block user ] or noncustomer. It might be that you are still thinking that you are somebody pays for the contract. There will be a switch of SD channels and migration to HD in Jan, Jan or Feb. I think it's in Jan, which also lead that customers who aren't our customers will call our customer center. And we say, "Okay, of course, you can continue watching TV, but now we need a contract." And of course, we are using our direct sales approach. Our growth is here still, so we are still growing on this point of sale. And through that, we will also continue to see a TV growth in the upcoming year '25 to close the gap between the 49% to hopefully 55% at the end. These are the exact numbers. We are now at 1.116 million customers from TV access, which is remaining bulk and individual, like I said before, a good trend on the TV basis and which also makes us really...

Confident.

Confident. This was word I'm looking for. Thank you, Nico, that we will see a growing trend. When you look at the individual contract in the past, it was normal that we are losing, even without migration programs, 20,000 contracts after 9 months, for example, the year before. This year, we are stable. And this is the individual contracts where we don't see a migration. This means by growing our point of sales, by growing the attitude of the company that RGUs not only on the IP side, but also on the TV side, which you need to have to deliver service revenue on your network is very important. So here, we also see a growth path. So expecting for '25 as well a TV growth on our networks. And as well on the premium TV side and of course, the SD shutdown by the public broadcasters, ARD and ZDF, will help us as well to grow on the premium TV and of course, on the HD side. Last topic on my operational list is, again, the NetCo-ServCo split because this is heavy load for the company. And the good thing is it has a great impact for our company also for the future. So first of all, we talked in the past about it, but it is simplification, very important. So concentrate where focus has to rely on, concentrate on growth for IP, concentrate on growth for wholesale, concentrate on growth on TV and not concentrate to manage 35-or-whatever subsidiaries. So we reduced them to 15 and have a plan for the next reductions in place, which come in '25, '26. So this target achieved through end of August. And separation of both companies, target achieved end of August. Migration. By doing the separation of 2.9 million customers, B2B as well B2B into NetCo-ServCo, achieved by 100% intercompany agreements. How NetCo and ServCo, yes, work together and also this linked to a master service agreement between both companies, both up and running and signed to 100%. So also from my side here in that ground, even great work for the team, thanks for the team to manage this in such a competitive year is really extraordinary and makes life much more easier and transparent for the next years. And this, what are the benefits? Like I mentioned before, reduction of complexity enables us as a Tele Columbus group in an operational efficient way. We now have transparency, focus and rely on accountability. And of course, this structure gives us flexibility for future financing and monetization projects as well. That's from my side for now. And I'm handing now over to Nico for the financial performance of our company.

Thank you, Markus. Coming to Slide 18, just the normal view on a bit more details on revenues and the revenue composition. What we've broken out basically is the TV bulk access revenues. And clearly, we see a drop from the Q2 to Q3. At the same time, we do see a stronger uplift on the other revenue categories. Unfortunately, it's not yet compensating and offsetting the bulk losses, the headwind we have seen in Q3. As Markus said, we do believe that the impact is simply delayed. It's not completely lost. It will just take longer. We expect to reach the retained customers with above the 50% to 55% by year-end next year, and then hopefully uplifting the individual TV segment again and compensating for some of the losses that we've seen. As Markus also mentioned, we are pretty much on par with the industry benchmark currently in terms of the retention rate and the -- again, as we said, that we will need more time going through the customer base again to talk to the customers and get them to sign up. In the end, what you can then clearly see is on the revenue composition, we are now above 50% in terms of Internet and phone revenues. TV reduced to around 30% after the drop in the bulk revenues. In terms of EBITDA, if we look at the normalized EBITDA, which is broadly stable, on an adjusted normalized place, we are slightly down. We did see a few topics. One is, obviously, the revenue loss strongly impacted by the bulk migrations. We did have some positive and also one-offs in the terms of operating income and the direct cost on the signal fees, which helped a lot. Personnel and marketing, both growing. Personnel, the same as the previous quarters. We have the FTEs on payroll and salary increases, we do see to also deliver the B2C growth. At the same time, we've had higher marketing expenses, which also led to the higher net sales and sales performance that we've seen. And if we look at the reported EBITDA, it dropped significantly due to the nonrecurring expenses, which is what we previously discussed, basically a double-digit figure in refinancing also a double-digit figure in the TV migration topics, the separation close to a double-digit figure and the rest is personnel initiatives that we are anticipating. So all in all, we had roughly EUR 36 million in nonrecs and anticipate to have a similar magnitude of an additional EUR 8 million to EUR 10 million in the Q4 going forward. Also related to the -- basically to still the migration topics and the transformation activities that continue. Looking at CapEx on Page 20. We have changed this slide to show CapEx, excluding leasing. We had a few feedbacks from the market side from analysts. While we discussed that it would be easier if we get this closer to the investing cash flow, if we exclude the leasing, so therefore, we adjusted the numbers retrospectively. So therefore, here, you will see the CapEx numbers excluding leasing. In the tool kit, you still have both views, including and excluding, so you have like-for-like comparison to the past. In general, what you can see is, as we've previously mentioned, the full year '24 is on a slightly higher base than '23. CapEx numbers increased year-on-year, roughly 25%. It's basically driven by the higher invest connected to the end customer business for growth and the fiber deployment, basically seen in the first dark blue column. Network infrastructure is basically being higher. We see Q2, Q3 already higher, and we expect as the normal seasonality kicks in for Q4 also to have a stronger CapEx on networks in Q4. Also, the end customer-related CapEx was EUR 17 million is slightly higher than the EUR 14 million a year ago, in line with expectations on growth. You may have seen still that the subscriber acquisition cost has come down in Q3 after we knew the push in the TV migration summer of Q1 and Q2 where we had extraordinary expense, 3P share and a lot of mailing communication activities to the market. That has come down to, let's say, a more broadly average that we had seen in the past, which is good. So we are balancing again cash out on the sales channels as well as on the network. IP is pretty much, again, a bit back up quarter-on-quarter after we had a lot of focus on the transformation activities on the NetCo-ServCo separation. It has come back to a bit more of internal activities and increased activities here. If we look on the revenues, 9 months, basically not surprising. We see the drop in TVs by EUR 27 million down and see an offsetting EUR 22 million increase on Internet and phone. And therefore, like-for-like, we included wholesale and the hardware just to have a better comparison. We are not offsetting. There's a EUR 5 million delta that we're working on first by increasing the TV revenues and then also accelerating Internet growth. B2B, broadly stable. And on the other side, we did see a reduction on the interconnection revenues, which is related to the loss of Marienfeld, which is basically an EBITDA wash because we have decreased costs as well. So there's almost no EBITDA impact out of that. Finally, let's quickly summarize the financials, and then we will give you the time for questions. The 9-month performance, the revenue we just discussed in a bit more details. Normalized EBITDA, broadly stable, around EUR 142 million. CapEx up as expected but slightly lower than we originally planned, also through carefully managed cash flows and offset the pressure we see on the top line. And then we added the operational cash flows, which show that we did improve compared to last year. And although we had higher investments, we also had positive impacts from net working capital management, which helped to manage cash flows basically. And that is what we continuously do and monitor closely in order to actually have a clear view on cash and cash reach. So everything is in order. That was a quick run-through around the financials. So happy to take your questions now, and I will give it back to Sandra.

[Operator Instructions] Our first question comes from Polo Tang.

It's Polo Tang at UBS. I just have two questions. The first question is, can you talk through what you're seeing in terms of competitive dynamics in the German broadband market? If you look at German mobile, promotional activity has become quite aggressive. So I'm just wondering if this is spilling over into the German broadband market. Second question is relates to Deutsche Telekom because at its recent Capital Markets Day, Deutsche Telekom was making a point it is seeing greater success in accessing MDUs and deploying fiber. Depending on which vintage you look at, Deutsche Telekom was saying that they were able to access 40% to 60% of the MDUs that they were passing. So I'm just wondering, are you seeing much impact from DT deploying fiber and MDUs in your footprint? Or do you think that DT is mainly focused on the Vodafone footprint?

Polo, I take these questions. Markus here. And what we see is a competitive environment right now on the broadband market. So what we saw, I think it was also in the last quarter, this. Vodafone comes up with new broadband tariffs. But to be honest, on the growth path on the IP side, there is no question mark on my side that we will continue on that side. And you mentioned the mobile packaging of 3- or 4-Play that the competitors are doing here that might be -- might impact a little bit the competitive market. But what my experience in the past from other companies was that funny enough, everybody is looking for that bundles, but customers are still or thinking mobile and broadband in some of these occasions a little bit different. But nevertheless, we watch here where we open the market. But right now from that, we can't see any impact on our growth path on broadband. Coming to the comment of the Capital Markets Day of Deutsche, what we did, I mentioned it before. I think what we did -- or what we are doing with our base management on consumer sales, so very exact extrapolation, churn management, retention offers and so on and so on. We do at the same side on our housing side. And here, right now, we can't see that huge overbooked numbers, which are expressed by Deutsche on their Capital Markets Day. Access to house -- housing associations in that way, there might be -- of course, we are also -- there might be a loss to Deutsche on the fiber deal, but we also gain customers back from Deutsche from Vodafone as well and other competitors. So on our base, on housing, we actually are growing during the course of this year, '24 by a few thousand customers, I think it's 10,000 or 15,000 customers. We are growing here, and I can't see that access approach by Deutsche in a huge way into our customer base. This is what I can say to your question. Thank you.

The next question comes from James Ratzer.

Two questions, please. So the first one, would just be really interested, a bit more insight into your outlook for EBITDA for this year and maybe looking as well into 2025. In the release, you've now lowered the EBITDA guidance on a reported basis to be slightly down year-on-year. And I think, Nicolai, you have said EUR 8 million to EUR 10 million of one-off items in Q4. So that would seem to imply EBITDA of around EUR 185 million to maybe EUR 188 million for the full year. Am I doing my math correctly? And if that is broadly right, how are you thinking about? Can you give any comments on the outlook going into 2025, given what you're saying around TV and your hopes on Internet growth? And then secondly, congratulations on all the progress made around the NetCo-OpCo split. I mean given that you've now signed the MSA that's in place, are you able to give us any pro forma guidance on how the NetCo might look from a revenue EBITDA/CapEx perspective? And any thoughts you can give on next steps with that separation over the next 6 months, i.e., potentially a refinancing or M&A, what your current thinking is now that split is complete?

Thank you, James. I will take these questions. Nicolai speaking. First, on your broad outlook 2024, I would probably just comment you on the ballpark numbers. You're probably right. Due to the heavy impact that we've seen in Q3, we would still -- we're still working on what's happening in 2025. So I would probably not go into details here today. In terms of NetCo-ServCo, your questions, we are not in a position yet to really show individual numbers or guidance on the trajectory yet. What comes next is bringing this, what we've achieved to be more on an operational level going forward and get all these things. You might remember from Q2 that we still have the lift and shift of people being done, which follows in the next couple of months. And from that on, we will start to basically work as these 2 separate entities going forward, but we are not in a position to show individual numbers yet.

Are you able to give any thoughts more on the kind of some of the strategic next step to give us any more color? Could you imagine a refinancing along the 2 business lines or any M&A? I'm just trying to think about you've put a lot of effort into this is how some of the creditors and equity backers then we'll see a change for the company as a result of this?

James, like I said during the presentation, we have a two-side approach here. It makes us more efficient, focused in the company, and it gives us exactly the opportunities you're asking for, for refinancing and other topics. And this is now exactly finishing the work on OpCo-NetCo splits here and then looking what is possible in the market and what options are there. This is exactly our path for '25.

[Operator Instructions] The next question comes from Jean-Yves Guibert.

A couple of questions. The first one, maybe housekeeping question. On Slide 13, when you say the bulk migration potential of 1.161 million, does it exclude still around 200,000 of bulk contracts you were expecting to retain, i.e., not to migrate?

Yes. That is the full number, exactly.

I mean so it excludes the 200,000 or it included 200,000?

It includes the amount of customers that we retain on a bulk-like contract. Yes.

Okay. So it's, as you -- I think you indicated previously because my -- through the web link, I was cut at some point. It's slightly below the -- above the 1.2 million initial base you reported in mid-2023 about this bulk customer base to potentially migrate?

What I'm referring to, the number which is our number we are concentrating in to put our work on is this 1.161 million. It was a little bit higher starting the migration. And in these cases, there are also contract churns or losses. So what I said is that in the 49% number, which is linked to the 1.161 million, these are the number which are single contracts and contracts to stay in a bulk similar way of contracts. So yes.

Okay. So but so far, so since Q4 '23, 1.037 million of those bulk contracts have gone, partially migrated to individual customers. So should we expect a very small further -- or end of bulk contract in Q4 '24? Less than 100 ?

No. We expect to be something around 200 or whatever staying in that system. And maybe there will be a change also next year because customers by law can change if they stay in a similar system or if they are not. And this is then what we also have to manage that there might be a smaller part, but much, much, much smaller than we have to deal with 5,000, 10,000 or whatever, again, on a quarterly basis, but not more coming.

Yes, Jean-Yves, just one comment. So now we are on 253,000 on bulk left per end of quarter, and we do expect some more additional switches out of this from bulk to individuals. So there will be -- so this is not then going forward, this is not going to be the number and it might be a bit lower than what we currently see. So there will be additional projects going forward in the next couple of months that hadn't had time to decide yet or it's the smaller footprint that Markus was just mentioning. So there will be a bit more of smaller scale migration projects. And therefore, we do expect some losses here over the next couple of weeks.

Okay. In terms of your revenue, TV revenue, so the split between the access bulk-rated TV revenue and excluding the TV access bulk. So you're running in Q3 at around EUR 27 million of TV revenue, excluding the access bulk contract, which would imply around rated monthly ARPU for those customers. That's close to EUR 12. Is that a fair assumption? And should we expect that to remain around that level? Or you expect to grow -- to be able to grow to TV ARPU -- B2C TV ARPU from that, around EUR 12?

Honestly, it sounds a bit high to me at the moment. And definitely, we can't grow the ARPU about that. So [indiscernible].

Okay. But is that fair? I mean your TV revenue is EUR 30.2 million, minus EUR 3.9 million of bulk TV revenue. That's EUR 26.8 million of TV revenue, excluding the bulk contract, so that's from your numbers, EUR 26.8 million. And you have an average base of B2C TV customers of around 750,000 during the quarter, Q3. So from that, I derived EUR 11.8, your ARPU. So unless some data which are not recorded in terms of TV customers. I mean we can follow up, but that's a very simple mathematic taken from your reported numbers.

Yes. I would propose to follow that. I mean I can follow you with the numbers, but let's have a look. And why don't you just send me a short message, and I'll have to look at it.

Yes, sure. And last question, I think you have referenced some positive one-off in your reported normalized EBITDA, which implied a relatively high margin of 47.5%, but I'm not sure whether you have quantified those one-offs. So just trying to understand what could be the normalized run rate EBITDA margin we should expect?

You're referring to the signal fees, and you probably see something around EUR 5 million in one-offs.

The next question comes from Vivek Khanna.

Two questions, if I may. First of all, just on the signal fee, can you just remind me? I couldn't quite hear what that quantum is and over what period that is having an impact? And then moving away from that, on one-offs. Thank you for the guidance for the incremental spend for Q4. I'm just wondering if you look into 2025, do we expect additional sort of NetCo separation charges? Or is most of that now already being captured? And then related to that, I think you mentioned that some of these one-off charges are linked to head count optimization. So I'm just wondering if you could provide us a little bit of color as to what you expect to benefit from over time from that initiative? And the final question is on the NetCo-OpCo split. While I appreciate today, you don't want to provide additional or incremental financial information, I'm just wondering if you could provide us some color as to what you think is the appropriate wholesale rate for NetCo to be charging to ServCo today, considering that, that access probably will be a DOCSIS 3.0 access connection? And potentially how that wholesale rate could change over the medium term as the network moves from DOCSIS 3 to the fiber?

Vivek, thanks for your questions. Could you possibly rephrase the first one? I did not really capture that one.

It was just going back to Jean-Yves' question on one-offs which how much and what this quarter? I couldn't catch that.

But that's what I answered with the question, right? So I said roughly EUR 5 million in the quarter for signal delivery fees.

In the quarter, perfect. That's perfect.

Yes. Yes, yes, okay.

And then let me answer the question to the social plan or something like that. I would -- to be honest, we are right now in negotiations and hopefully near to final these negotiation on the social plan with our workers' council. And for that, I'm happy to share some of these when we have a signed deal. For me, it is important to speak with the workers' council before and then also with our employees and so on and so on. But there is coming from ServCo-NetCo split, coming, making the company more efficient, focused on what is necessary. There is also, I would say, a fit-for-growth program on that side, but it isn't signed. But we have some ideas, but let me talk about that when we have a signed deal.

And maybe in addition to that, your question on 2025 and on the personnel cost, we already see this year, it's basically an ongoing business besides the one Markus was just describing that we also have smaller measures that do not really rely on a workers' council agreement. So those costs then are put into nonrec when we do have here and there changes in the organizational structure and a bit of a smaller scale program. The one that Markus just described is just a bigger one that we will hopefully look forward and then get into books probably next year, not this year. And in terms of other one-offs, yes, obviously, we have Phase 1 of the NetCo-ServCo separation completed. There is still a bit more to do. Markus mentioned the amount of legal entities that we have still left. So there might be additional topics coming up next year in order to simplify the organization. So yes, we do anticipate to have one-offs. They are hopefully in a much smaller range compared to this year and last year, so therefore -- but yes, they won't be 0 next year. And maybe on the final question, please do understand that we cannot share any numbers on wholesale fees being in DOCSIS 3.1 or fiber as we are in negotiations with players on the market. So therefore, we cannot really disclose any concrete numbers as this is currently ongoing.

And sorry, can I just ask one quick point of clarification out here? I mean you're saying you're in discussions with other people and with other operators in the market. I mean obviously, your largest customer on day 1 is going to be Tele Columbus Service Co itself. Just to confirm, I'm assuming that the any -- whatever the wholesale rate is charged, will it be the same to Tele Columbus Service Co versus other competitors? Or can there be a volume-based discount or separate pricing because I guess it's not really regulated? But I'm just trying to understand whether that's something the market would digest or accept or not?

Yes. Vivek, of course, it is volume-based-driven price models, which are used in the market. And so this is a normal standard, which we are also using for that script. Okay. Are there any questions? We have one hour more for a working day, which is great for everybody. So Sandra, if you can't see any questions anymore on the line, I can't see and then...

So far, no further questions, sir. [Operator Instructions] There are no further questions.

Okay. This is not the case. Wonderful. Yes, we will have our first Christmas party on our offices in Leipzig tomorrow. So have a wonderful Christmas time, and use the time between the years to stay with your family and speak to you soon. And yes, see you or speak to you next year as well. Thank you very much. Bye.

Thank you.