Curtis Millen: Yeah. So, you’re talking about OUTFRONT. Yeah, OUTFRONT hasn’t closed yet. So, you’re right, there’s a bit of a balance here between ad market recovery and potential closing of the acquisition.
Aravinda Galappatthige: Okay. Thanks.
Operator: Thank you. The next question is from Batya Levi from UBS. Please go ahead.
Unidentified Analyst: Good morning. This is Chris for Batya. Just digging into the postpaid phone churn result, any color you can give on the performance you’re seeing by geography and whether the level of competition has been consistent across regions? And any early color you might be able to provide on 1Q? Has the level of switching intensity eased so far in January? Thanks.
Mirko Bibic: Yeah. So, look on churn, we’re not sitting idly by. Like, we’ve got to watch this very carefully. It has gone up. It feels a lot more obviously like pre-COVID than it has in the last several years. So, what we’re going to do is continue to leverage our household bundling strategy where we’ve been pretty effective over the last couple of years, including in 2023, focus on the premium loadings in the way I suggested a couple of questions ago, continue to improve customer experience. I think that common billing platform I’ve talked about is going to help. We’re going to use Crave quite strategically. And these are the things that we’re going to do to make sure that churn stays under control, but it has to be looked at quite seriously, and that’s what we’re going to be looking for.
Now, if we look back at Q4, you can see how diligent we were, right? We managed to deliver record sales, strong service growth, solid nets, organic ARPU growth, significantly better product margin, and basically, we didn’t have to overspend to deliver kind of the solid results we did. So again, it’s always about balancing the spend on the share you gain while making sure that you’re doing all the right things tactically to keep churn in check.
Unidentified Analyst: Okay. Thank you.
Thane Fotopoulos: Yeah. Matthew, we’re starting to time out. So, this will be our last question.
Operator: Perfect. Thank you. The next question is from David McFadgen from Cormark Securities. Please go ahead.
David McFadgen: Okay. Thanks for squeezing me in. Just a question on the CapEx. I know like the regulatory decisions that have been made, but don’t the financial metrics just force you to cut CapEx anyways? If you want to get down to 100% payout ratio and you have to pay $400 million in severance, $300 million in higher interest expense, doesn’t that just kind of force your hand to lower the CapEx anyways? And now with the lower CapEx, when would you expect to reach the 9 million homes?
Mirko Bibic: Well, no. We outlined two years ago on 2021 that our goal was to hit 9 million fibre locations, and we signaled quite clearly and consistently to shareholders that as a result, we were going to operate at an elevated payout ratio, but it was the right thing to do at the time given the environment for the long-term strategic benefit of shareholders. But that was done in the context of the regulatory environment we had in front of us then. So, we are reducing CapEx as a direct result of the regulatory environment, because we had clearly signaled that we were going to operate at the elevated payout ratio, because, again, we’re always managing for kind of in-year, but we’re also managing for the long term. And we are — we can always at $4.1 billion of CapEx compared to $4.6 billion, obviously, it’s a reduction, but we get to choose where to spend that $4.1 billion, right?
And we’ve chosen to deemphasize fibre and focus on other growth vectors and transformation. So, even within the reduced CapEx budget for 2024, there are allocation decisions that are totally in our control.
David McFadgen: Okay. All right. Thank you.
Operator: Thank you. There are no further questions at this time. I would now like to turn the meeting over to Mr. Fotopoulos.
Thane Fotopoulos: Thank you, Matthew. So, thank you again for your participation this morning. As usual, Richard and I will be available throughout the day for follow-up questions and clarifications. On that, have a great day. Thank you.
Operator: The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.
