BCE Inc. (NYSE:BCE) Q3 2023 Earnings Call Transcript

Maher Yaghi: Great. Thank you for taking my question. I want to go back to the wireline side. Mirko, you talked about fiber-to-the-home being very competitive against coax. And we certainly saw the results of fiber-to-the-home in your results this morning, very strong loading. Can you discuss a little bit where you’re taking share from regionally — on a regional basis and the pricing in the marketplace, how competitive it is right now compared to, let’s say, a couple of here, six months ago and your strategy to continue to grab market share? Is it price-based competition or more technology? So — and also on wireless, I wanted to ask you, you discussed your views on the competitive marketplace. I just wanted to ask you in terms of expectations for ARPU in Q4, where do we stand? What are the puts and takes that will drive ARPU growth or decline that we should think about? Thank you.

Curtis Millen: In terms — hi, Maher, thanks for the question. In terms of wireline, ultimately, on a regional basis, it’s really where we have fiber, right? I mean ultimately, fiber is fiber in Quebec and Ontario and about 104,000 loads, it’s strong performance, call it everywhere. And ultimately, it’s not solely driven by pricing. I mean, our pricing is competitive. It’s a competitive market, but ultimately, the network advantage, speed advantage, the up and down speed advantage that we have is what we’re leveraging in the market. And then you start to combine that in a more bundled world where we have more fiber footprint, more wireline footprint. We’re driving mobility and internet bundled subs as well. So it’s a combination of a few of those things.

Mirko Bibic: On wireless, I think our ARPU performance was pretty good in Q3. We kept ARPU stable in the environment that we had. And I think the puts and takes are service revenues ARPU roaming growth did slow down. I called that out. It slowed down year-over-year and sequentially, and data overage continues to decline as customers continue to move to larger unlimited plans. But our monthly recurring charges accounted for 85% of our service revenue growth and also a big driver of our ARPU performance. And that’s a good thing, and it shows the focus that we have on premium loadings on 5G. And I think as you look forward to Q4, just repeat what I said in response to David’s question, but I would — in terms of our approach, you’re going to continue to see us manage that balance between quantity and quality so that we can deliver what you all expect of us, both the strong subscriber performance, but strong financial performance.

Operator: Thank you. The next question is from Tim Casey from BMO Capital Markets. Please go ahead.

Tim Casey: Thanks, Mirko. Given the free cash flow profile you’ve outlined that you’ll meet your targets. But you did recently make an acquisition, you’ve got a spectrum auction coming up. And as you highlighted, there are some economic concerns. How do you put that all together with the shareholder base that continues to expect dividend increases in light of where leverage is? How should we think about that going into next year?

Mirko Bibic: Look, I just — I’d say this. We know what investors seek from us, right? I’ve said this time and again, it’s stability of the dividend first and foremost, and it’s free cash flow growth supporting that dividend. We’re going to continue to be laser-focused on that. We have said for a couple of years now, quite clearly, we telegraphed that we would be operating at an elevated payout ratio so that we could do the things that are strategically important to this company and to shareholders for the medium and long-term, and you’re seeing us deliver on those promises and that road map. And at the same time, we’re going to continue to take significant costs out of the business. If I’ve highlighted that in the past, I’ve reiterated it today.

So as Curtis. So again, all these things that we’re doing, Tim, they’re going to pay off in the medium term, pay dividends literally another way to put it. And at the same time, when these opportunities come up like tuck-in acquisitions, you saw the one last week, we’re going to take advantage of those because they’re strategically important. So when you take a step back, our priorities for capital allocation, the dividend fiber build spectrum and investments in digital inefficiency enhancing initiatives, that’s what we’re going to do.