Jérome Dubreuil

Jérome Dubreuil inquired about TELUS's Sovereign AI strategy, specifically chip ownership, whether the investment is included in guidance, and where the assets would be located on the balance sheet.

Answer

Darren Entwistle, President and CEO, TELUS, confirmed the investment is included in guidance and on the balance sheet. Tobias Dengel, President, TELUS Digital, elaborated on TELUS Digital's unified AI capabilities, highlighting TELUS as a testing ground, CXAI expertise with existing clients, and cost reduction through AI. He cited a 44% increase in AI-enabling capabilities revenue in Q4 2025. Darren Entwistle added that TELUS leverages legacy data centers as sovereign AI factories with minimal capital investment, balances growth with demand, and has a strategic partnership with NVIDIA, controlling all elements of the AI thesis (inference, models, training) for enhanced sovereignty and economies of scope.

Jérome Dubreuil inquired about TELUS's Sovereign AI strategy, specifically regarding chip ownership, whether these investments are included in the guidance, and how the assets would be reflected on the balance sheet.

Answer

Darren Entwistle, President and CEO, TELUS, confirmed that Sovereign AI investments are included in guidance and on the balance sheet. Tobias Dengel, President, TELUS Digital, detailed how TELUS Digital unifies capabilities around customer journey moments, with AI underpinning everything. He highlighted TELUS as a testing ground, CXAI differentiation with existing clients, and the 44% Q4 and 35% full-year growth in AI-enabling capabilities. Darren Entwistle added that TELUS leverages legacy data centers as cost-efficient sovereign AI factories, benefits from a strategic partnership with NVIDIA, and maintains unique control over all elements of the AI thesis, enjoying economies of scope from developing GenAI applications for both TELUS and external clients.

Jérôme Dubreuil asked if recent wireless market activity in late Q4 2025 and early 2026 has altered BCE's 2026 expectations or guidance, particularly regarding ARPU growth. He also sought potential catalysts or inflection points for demand and announcements related to AI Fabric.

Answer

Mirko Bibic, President and CEO, BCE, confirmed that recent wireless pricing activity is built into the guidance ranges. He noted that while moderate ARPU growth by Q4 2026 seemed possible after Black Friday 2025, recent aggressive pricing might make it more challenging, though 11 months remain. For AI Fabric, Mirko Bibic stated that the 2026 plan includes monetization of a small portion of available capacity, with active discussions for additional opportunities based on strong interest and sales funnel.

Jerome Dubreuil from Desjardins Securities questioned whether BCE's 2026 expectations or downside padding had changed following recent aggressive wireless promotions. He also asked about potential catalysts for AI Fabric, including demand inflection or government announcements.

Answer

President and CEO Mirko Bibic stated that recent wireless pricing activity is built into the guidance ranges, acknowledging that achieving moderate ARPU growth by Q4 2026 might be more challenging but remains possible. Regarding AI Fabric, he noted that the 2026 plan monetizes a small portion of available capacity, with active discussions ongoing for additional opportunities driven by strong demand.

Jérôme Dubreuil asked about expectations for margin growth in the Canadian telecom business between 2026 and 2028, and sought more details on the timing, investment levels, expected financials, and earnings flow-through for Bell AI Fabric.

Answer

CFO Curtis Millen indicated that with 2-4% revenue growth and 2-3% EBITDA growth, margins would likely be relatively flat for the Canadian telecom business. CEO Mirko Bibic reiterated AI Fabric's target of monetizing 73 MW for $100M-$150M annual EBITDA, with strong demand and expected announcements, noting Q3 AI-powered solutions growth was primarily organic from Ateko and Bell Cyber.

Jérome Dubreuil of Desjardins Securities asked about the long-term free cash flow profile of Zipline Fiber, specifically its evolution after the initial high-capital expenditure period and the impact of the PSP Investments partnership.

Answer

EVP & CFO Curtis Millen confirmed that Zipline's EBITDA growth is projected to exceed 20% in 2025. He detailed that once the initial copper-overbuild is complete, the partnership with PSP Investments will handle the majority of future fiber builds, significantly lowering Zipline's consolidated CapEx and accelerating free cash flow growth.

Jérome Dubreuil asked about the long-term free cash flow profile of the Zipline acquisition, specifically focusing on the evolution of CapEx and cash flow after the initial build-out phase.

Answer

EVP & CFO Curtis Millen stated that Zipline's EBITDA growth is expected to exceed 20% in 2025. He explained that the PSP Investments partnership will handle the majority of future fiber builds, significantly lowering Zipline's consolidated CapEx and accelerating free cash flow growth once the partnership is active.

Jerome Dubreuil of Desjardins Securities inquired about the rationale for accelerating the fiber deployment and asked for details on the pro forma free cash flow impact from the announced transactions.

Answer

CEO Mirko Bibic clarified that the PSP partnership provides a more capital-efficient path to its initial 3 million home target and unlocks a larger 8 million home opportunity long-term. CFO Curtis Millen added that pro forma CapEx intensity is now expected to be around 14.5%, down from a prior estimate of 16.5%, which will benefit free cash flow.

Jerome Dubreuil asked for clarification on the CapEx reduction, questioning if spending would increase again in 2025 if the CRTC reverses its decision on wholesale fiber access. He also inquired about the long-term potential to reduce CapEx by using fixed wireless to decommission expensive copper networks.

Answer

Mirko Bibic, President and CEO, explained that the 2025 CapEx budget is set, but a future CRTC reversal would influence how capital is allocated *within* that budget, potentially increasing the fiber build pace. Curtis Millen, CFO, acknowledged the long-term efficiency benefits of retiring copper but noted that the timeline and scale are dependent on the Canadian regulatory environment, which is less permissive than in the U.S.

Jerome Dubreuil asked about the dollar margin profile of prepaid versus postpaid wireless subscribers and inquired about the future direction of wireless CapEx, excluding spectrum, given the challenging return environment.

Answer

CFO Curtis Millen stated that BCE manages EBITDA on a consolidated basis and does not disclose the margin profile of prepaid versus postpaid services. CEO Mirko Bibic addressed CapEx by stating that overall capital spending will continue to decline, with next year's being lower than 2024. He expressed confidence in running the company at a capital intensity below 15% in the short- to medium-term while still investing in key strategic areas.

Jérôme Dubreuil asked for qualitative reasons behind continued wireless penetration increases despite unchanged immigration expectations, and how long this trend might last. He also questioned which specific investments are deemed 'uneconomical' due to the regulatory environment and if this impacts network evolution.

Answer

President and CEO Tony Staffieri attributed wireless penetration to second/third/fourth lines and increasing adoption of two phones for enterprise employees due to cybersecurity. CFO Glenn Brandt explained that 'uneconomical' investments relate to the impact of TPIA competition and MVNO traffic, affecting the ability to invest in thinly populated rural/remote regions and make a return. He also cited lower immigration and the completion of Shaw-Rogers integration as factors reducing capital spend.

Jérôme Dubreuil first asked President and CEO Tony Staffieri to elaborate on the qualitative reasons for continued wireless penetration increases, despite unchanged immigration expectations, and how long this trend might last. He then asked CFO Glenn Brandt about the specific investments becoming uneconomical due to the regulatory environment, and if this impacts network evolution or the roadmap.

Answer

President and CEO Tony Staffieri attributed continued penetration gains (2%-2.5%) to factors like second/third/fourth lines (promoted by add-a-line strategies and hardware discounting), and increasing adoption of two phones in the workplace for cybersecurity reasons. CFO Glenn Brandt explained that TPIA competition outside traditional footprints, MVNO traffic, and government programs encouraging TPIA affect the economics of investing in thinly populated rural and remote regions for both wireless and wireline coverage, especially with lower immigration. He also noted that high capital intensity from the Shaw-Rogers integration is now declining.

Jerome Dubreuil asked for details on the financing plan for the Kilmer deal (MLSE minority stake acquisition), discussions with credit rating agencies, and confirmation that no equity would be needed to bridge any funding gap.

Answer

CFO Glenn Brandt outlined the plan to acquire the remaining 25% MLSE stake, combine operations, and then recapitalize the combined entity within 18 months, likely in 2026. He confirmed ongoing discussions with credit rating agencies and expressed high confidence in executing the transaction without needing equity, leveraging the significant value of their sports assets and a strong track record of deleveraging.

Jérome Dubreuil from Desjardins Group inquired about the company's longer-term capital expenditure profile, asking specifically about the potential for Cable CapEx reduction as the integration of Shaw's assets advances.

Answer

CFO Glenn Brandt reiterated the company's intention to lower capital intensity within the Cable segment over time, noting that efforts are already underway as reflected by the guidance to be at the low end of the 2025 range. While not providing a specific future number, he confirmed that Cable capital intensity is higher than it needs to be and that there is more work to do in the coming years.

Jerome Dubreuil posed a long-term question about satellite-to-mobile technology, asking if it could eventually compete with traditional cellular networks for data transmission in urban areas.

Answer

President and CEO Anthony Staffieri described satellite-to-device as an emerging, 'game changer' technology that will augment, not replace, terrestrial wireless networks. He explained it will dramatically expand coverage for services like emergency texting but has limitations, such as requiring a direct satellite view, which makes it less of a threat to cellular in urban environments. He compared its role to how wireless augmented, rather than supplanted, wireline.

Jerome Dubreuil asked for a summary of the synergies between Rogers' sports assets and its core telecom business, and for guidance on organic deleveraging for 2025, excluding any potential structured equity transaction.

Answer

President and CEO Tony Staffieri outlined a three-part sports strategy: leveraging significant asset value, creating operating and revenue synergies, and monetizing the sports ecosystem to surface value for shareholders. CFO Glenn Brandt addressed deleveraging by pointing to the EBITDA and free cash flow guidance, stating that a substantial portion of free cash flow will be used to lower leverage organically, though he did not provide a specific target.

Jerome Dubreuil asked for clarification on the tax impact of the equity sale to understand the net value of the $7 billion proceeds and inquired about the long-term CapEx outlook for Rogers.

Answer

Chief Financial Officer Glenn Brandt estimated the net after-tax savings from the debt repayment would be roughly $250 million. He also reiterated that the long-term capital spending outlook remains in the range of approximately $4 billion annually to support growth across the businesses, with capital intensity expected to soften as revenues grow.

Jérôme Dubreuil questioned the reliability of SI&C leading indicators (bookings, pipeline) for recovery, given differing peer comments, and whether organic growth has troughed this quarter. He also asked if AI is causing CGI to win or lose deals in areas differently than before.

Answer

François Boulanger, CEO, believes CGI likely hit bottom this quarter and expects gradual sequential improvement, contingent on no further U.S. federal shutdowns. He noted SI&C bookings returning to 100% provide confidence due to faster revenue conversion. Mr. Boulanger stated he doesn't see a trend of winning or losing deals differently due to AI, emphasizing the need to embed new technologies to remain competitive.

Jérôme Dubreuil asked about the reliability of leading indicators like bookings and pipeline for the SI&C recovery, given contrasting peer comments, and whether organic growth has troughed this quarter, excluding the shutdown impact. He also inquired about any shifts in winning or losing deals in the AI era and client explanations for these changes.

Answer

François Boulanger, CEO of CGI Inc., expressed confidence that organic growth likely troughed this quarter and expects gradual improvement in future quarters, citing short-term SI&C bookings as a reliable indicator. He stated that CGI is not necessarily winning or losing deals in new areas due to AI, but emphasizes the continuous need to embed new technologies in delivery to remain competitive and relevant.

Jérome Dubreuil questioned CGI's view on the M&A environment, contrasting it with peer commentary, and asked for an update on the U.S. Federal government business, specifically a potential shift from cost-cutting to modernization.

Answer

President and CEO François Boulanger expressed a bullish outlook on M&A, citing lower valuations and a very active pipeline, and confirmed CGI has the capacity for both acquisitions and buybacks. Regarding the U.S. Federal segment, he noted that intense information requests have subsided, leading to more productive discussions about modernization. He explained that cost savings necessitate new systems and automation, which is driving these new conversations and a sequential pickup in bookings.

Jérome Dubreuil of Desjardins Group inquired if the proposed privatization of TELUS Digital (TIAXT) signals a strategic shift for other tech ventures and requested financial details, like EBITDA, for the new tower entity.

Answer

President and CEO Darren Entwistle clarified the TIAXT move is solely to support deleveraging and does not alter monetization strategies for other assets. EVP & CFO Doug French added that while tower entity EBITDA is not disclosed, the deal is structured to be free cash flow positive for TELUS with no impact on consolidated debt or EBITDA.

Jérome Dubreuil inquired about the strategic implications of the proposed TELUS Digital privatization and requested financial details, specifically EBITDA, for the new wireless tower entity.

Answer

President and CEO Darren Entwistle clarified the privatization is solely to support deleveraging and does not signal a broader strategic shift for other ventures. EVP & CFO Doug French stated that the tower entity's EBITDA is not disclosed but confirmed the deal will be consolidated with no impact on TELUS's reported debt or EBITDA and will be free cash flow positive.

Jerome Dubreuil of Desjardins asked about the factors supporting the free cash flow outlook that underpins the new three-year dividend growth plan and inquired about specific events, beyond organic growth, that could accelerate the removal of the dividend reinvestment plan (DRIP).

Answer

President & CEO Darren Entwistle and EVP & CFO Doug French addressed the question. Entwistle emphasized the dividend plan is conservatively modeled and supported by a combination of strong EBITDA growth, lower CapEx intensity, and contributions from growth businesses like Health and Agriculture. French added that free cash flow will also benefit from decreasing interest costs, and lower restructuring and lease payments. He specified that faster-than-planned execution on asset monetization—including copper, real estate, and non-core asset sales—could accelerate the deleveraging and allow for an earlier removal of the DRIP.

Jerome Dubreuil inquired about TELUS's 2027 leverage target of 3x, asking how much asset divestiture is included and whether this implies satisfaction with the current asset portfolio. He also questioned the merits of a long-term dividend growth plan given market volatility and changing interest rates.

Answer

EVP and CFO Doug French confirmed that the deleveraging plan includes a placeholder for approximately $500 million in non-core asset divestitures over the next three years. President and CEO Darren Entwistle defended the dividend growth model, highlighting its 15-year track record and the company's strong prospective free cash flow outlook. He emphasized that balance sheet improvement is the top priority and that the Board retains quarterly discretion over the dividend.

Jerome Dubreuil asked to reconcile TELUS Digital's pivot to revenue growth with the traditional telecom investor focus on free cash flow growth.

Answer

Jeffrey Puritt, outgoing President & CEO of TELUS Digital, explained that while the goal is high single-digit revenue growth, the business maintains a strong free cash flow yield (15% YoY). He stated that this cash flow is reinvested to fuel the return to desired growth and profitability levels, aligning both objectives.

Jérome Dubreuil of Desjardins Group asked for an update on the market dynamics for reinforcement learning through human feedback (RLHF) and the AI solutions business. He also questioned the impact of Meta's acquisition of Scale AI on TELUS Digital's client relationships.

Answer

President of Digital Solutions Tobias Dengel noted that the AI consulting business is maturing from proofs-of-concept to full production deployments. Acting CEO Jason Macdonnell added that the Scale AI acquisition by Meta created immediate new business opportunities from clients seeking an independent partner, and that they have not yet seen a significant negative impact on their relationship with Meta.

Jerome Dubreuil asked a follow-up question on guidance, seeking to clarify if the performance assumptions for the core TELUS business have changed for the remainder of 2025.

Answer

CFO Gopi Chande confirmed they expect continued strength and consistent work from TELUS throughout the year, supported by a strong project pipeline across multiple business units, including health and agriculture. Executive Jason Macdonnell expanded on the strategic value of the partnership, describing it as a cohesive end-to-end ecosystem for developing and scaling AI solutions, which provides long-term sustainability.

Jerome Dubreuil asked about the new CFO's key priorities and the expected timeline for lapping the year-over-year impact of a large client contract ramp-down. He also followed up on whether governments favoring local suppliers could create a tailwind.

Answer

Chief Financial Officer Nicolas Lavoie outlined his priorities as focusing on internal analytics to support the three-year plan, driving M&A growth, and managing investor communications. Chief Operating Officer Bernard Dockrill explained that the ramp-down effect of the large client project will likely impact comparisons for another couple of quarters. On government procurement, President and CEO Paul Raymond expressed hope for a positive impact but noted that changing procurement laws is a slow process with an uncertain outcome.

Jerome Dubreuil of Desjardins sought confirmation of the $251 million wireless EBITDA and asked about expected margin impacts from increased Q3 spending. He also questioned Quebecor's stance on the TPIA review, given the potential impact on its Quebec broadband business.

Answer

CFO Hugues Simard confirmed the wireless EBITDA figure and affirmed that higher promotional spending is expected in Q3. President and CEO Pierre Karl Péladeau defended their pro-TPIA stance, stating they are accustomed to competition in Quebec and advocating for fair FTTH access nationwide, which they see as essential for becoming a fourth national player.

Jerome Dubreuil from Desjardins asked for guidance on the CapEx plans for the Freedom Mobile initiative, including 5G investments, and inquired about the underlying trend in retail internet net additions in Quebec.

Answer

CFO Hugues Simard provided a CapEx guidance of approximately $200 million annually for Freedom Mobile, which includes all network improvements and 5G investments. Regarding internet loading, he noted a significant year-over-year improvement in retail net adds, stating that Quebecor's competitive response to Bell has been successful and that they continue to capture a higher share of gross adds in Quebec.

Jerome Dubreuil from Desjardins Bank questioned the potential synergies Quebecor expects from the Freedom Mobile acquisition. He also asked about the anticipated financial impact from the recent M&A activity among internet resellers.

Answer

President and CEO Pierre Karl Peladeau detailed several synergies with Freedom Mobile, including leveraging Quebecor's e-commerce platform, improving procurement for handsets, gaining scale for negotiating roaming costs, and implementing cost-conscious management. Regarding internet resellers, Peladeau noted that competitors have acquired many of them at high prices, but he believes Quebecor's strategy of competing with its Fizz brand was correct and that they remain well-positioned to compete effectively in that market segment.

Jerome Dubreuil from Desjardins asked about Quebecor's confidence in financing the Freedom Mobile acquisition without an equity issuance and questioned the timing of the VMedia acquisition, given uncertainties around the Freedom deal and MVNO rates.

Answer

CFO Hugues Simard expressed confidence in securing financing for the Freedom acquisition without issuing equity, citing productive and supportive conversations with credit agencies. President and CEO Pierre Peladeau described the VMedia acquisition as an opportunistic move to acquire valuable technology for unregulated video services and to prepare for future service bundling.