Tim Casey

Tim Casey inquired about Rogers Communications' expectations for the wireless market in 2026, including anticipated growth, competitive intensity, and discounting. He also asked for perspective on the Rogers Satellite rollout, specifically what proportion of the subscriber base would receive the service as part of their plan and its potential for upsizing other subscribers.

Answer

President and CEO Tony Staffieri noted a slower growth market (2%-2.5% range) with intense competition, particularly post-Black Friday 2025, where Rogers opted for a balanced approach over aggressive discounting. He highlighted Rogers Satellite as a key value proposition, available in all Atlantic Canada plans and included in top-tier national plans for up to 24 months, aiming to drive adoption and enhance functionality beyond texting.

Tim Casey inquired about Rogers Communications' expectations for the 2026 wireless market, including growth, competitive intensity, and discounting. He also sought perspective on the Rogers Satellite rollout, specifically how much of the subscriber base will receive the service and its potential for upsizing plans.

Answer

President and CEO Tony Staffieri noted the Q4 postpaid market was down about 50% with high competitive intensity post-Black Friday, leading Rogers to a balanced approach focused on value beyond price. He expects 2026 market growth in the 2%-2.5% range. For Rogers Satellite, it's included in all 5G+ plans in Atlantic Canada and top-tier plans nationally for up to 24 months to drive adoption, with enhanced data and calling functionalities.

Tim Casey from BMO Capital Markets pressed for more specific timing on when investors can expect clarity regarding the monetization plan for the company's sports assets, asking if it's a 2026 or 2027 event.

Answer

President & CEO Tony Staffieri reiterated that it's difficult to set a specific timeline, as the company is being thoughtful about maximizing value. However, he indicated that clarity should be expected sooner than 2027, suggesting it is a midterm priority. CFO Glenn Brandt added that it is a priority for the next year and a half, but they need to get it right.

Tim Casey asked for clarification on the MLSE transaction, questioning whether Rogers would own the entire acquired stake at closing or if third-party investors would be involved from the outset, and also inquired about the remaining regulatory hurdles.

Answer

CFO Glenn Brandt stated that Rogers expects to close the transaction by acquiring the full stake from BCE first. He confirmed they are actively exploring opportunities with institutional investors post-closing. Regarding hurdles, he does not anticipate substantial issues with league or CRTC approvals and maintained a mid-year closing expectation.

Tim Casey asked about the closing timeline for the MLSE acquisition and potential holdups, the interplay between the MLSE and structured equity deals, and how the broader Canadian economic outlook is factored into the company's guidance.

Answer

President and CEO Tony Staffieri explained the MLSE approval process involves leagues and the CRTC, which is proceeding but slower than anticipated. CFO Glenn Brandt clarified that the MLSE and structured equity deals are independent and that the company has ample liquidity. He confirmed the 2025 guidance reflects current economic conditions, including moderating immigration levels.

Tim Casey asked about the expected contribution balance from Ateko, Cyber, and AI Fabric to the projected $1.5 billion growth in AI-powered solutions by 2028. He also inquired about the cadence of onboarding additional AI Fabric data centers and if revenue would be more back-half loaded in the timeframe.

Answer

CEO Mirko Bibic referred to John Watson's Investor Day deck for the breakdown: ~$400M from Cyber, ~$700M from Ateko, and ~$400M from AI Fabric. For AI Fabric, he anticipated a couple of launches in 2026, leading to revenue activity next year, not just in 2027.

Tim Casey of BMO Capital Markets asked about the market dynamics that led to BCE's improved wireless metrics in Q2 and the outlook for Q3. He also sought comment on the company's position following the federal government's decision on wholesale network access.

Answer

President & CEO Mirko Bibic attributed the strong wireless performance to a customer-first strategy that significantly reduced churn, noting that Bell is capturing its fair share of a slowing market. On the regulatory decision, he expressed disappointment and stated the focus is now on ensuring network builders are fully compensated for their investments.

Tim Casey asked about the wireless market dynamics that contributed to BCE's strong Q2 performance and the outlook for Q3. He also inquired about any remaining avenues of appeal following the government's decision on wholesale access.

Answer

President & CEO Mirko Bibic attributed the strong wireless results to a customer-first strategy that significantly reduced churn, allowing BCE to capture its fair share of the market. On the regulatory decision, he expressed disappointment and stated the focus is now on ensuring network builders are fully compensated for their investments.

Tim Casey of BMO Capital Markets asked about the company's plans for its excess capital and strong balance sheet, inquiring about potential returns of capital. He also questioned the thinking on CapEx intensity and the current M&A environment.

Answer

CFO Michael Eastwood reiterated the $10 billion capital capacity through 2027, with strategic M&A remaining the top priority, particularly in risk, fraud, compliance, and indirect tax. He noted that share buybacks are a possibility to meet the goal of returning 75% of free cash flow to shareholders. CEO Steve Hasker added that M&A will be both 'aggressive and opportunistic' within the Big Three segments. Eastwood also confirmed that capital intensity is expected to remain at approximately 8% for 2025 and 2026.

Tim Casey inquired about potential demand increases from the new U.S. administration and how the company will measure success on its internal execution initiatives in 2025.

Answer

CEO Stephen Hasker expressed cautious optimism about increased demand from regulatory changes but noted it's too early to tell. Regarding execution, he explained Thomson Reuters would apply the same rigor as its prior 'Change Program,' focusing on customer success, product innovation, and internal GenAI adoption. CFO Mike Eastwood added that retention and solutions selling are also key focus areas.

Tim Casey of BMO Capital Markets inquired about the sustainability of the 3% growth in fixed data services and asked for an update on other deleveraging initiatives, particularly real estate.

Answer

EVP & President of TELUS Consumer Solutions, Zainul Mawji, and EVP Navin Arora expressed confidence in sustained fixed data growth, citing diversification across consumer and business services. EVP & CFO Doug French detailed the multi-faceted deleveraging plan, including a future real estate REIT, ongoing property sales, and significant runway in copper decommissioning.

Tim Casey questioned the sustainability of the 3% growth in fixed data services and requested an update on other deleveraging initiatives, particularly real estate.

Answer

Zainul Mawji, EVP & President of Consumer Solutions, and Navin Arora, EVP and President of Business Solutions, affirmed the sustainability of fixed data growth, citing a diverse and profitable portfolio across consumer and business segments. EVP & CFO Doug French detailed ongoing deleveraging, including a multi-billion dollar real estate portfolio being prepared for a future REIT, copper decommissioning, and pruning of non-core assets.

Tim Casey asked for clarification on the TELUS Health EBITDA contribution figure and questioned the outlook for the fixed data line metric, which slowed significantly.

Answer

CEO Darren Entwistle clarified the 33% figure was year-over-year EBITDA contribution growth, not margin. CFO Doug French added that Health margins are below 20% with room to improve. Regarding fixed data, executive Zainul Mawji highlighted that product superiority, such as the new 5-gig internet, and strong customer step-ups are expected to drive positive momentum despite competitive pressures.

Tim Casey from BMO sought more details on the VMedia acquisition's strategic purpose and financial impact, and asked for management's perspective on the likelihood of the Competition Bureau process for the Rogers-Shaw deal proceeding to a full tribunal.

Answer

President and CEO Pierre Peladeau clarified the VMedia acquisition was a non-material, technology-focused purchase to gain agility and interconnection capabilities. Regarding the regulatory process, he acknowledged it is delicate and not under their control but affirmed they are working with Rogers to address the Bureau's concerns to secure approval.