Good day, and welcome to the Rogers Communications Third Quarter 2018 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Glenn Brandt. Please go ahead, sir.

Thank you, Simon. Good morning, everyone, and thank you for joining us. I'm here with our President and Chief Executive Officer, Joe Natale; and our Chief Financial Officer, Tony Staffieri. Today's discussion will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2017 Annual Report regarding the various factors, assumptions and risks that could cause our actual results to differ. And with that, let me turn it over to Joe to begin.

Thank you, Glenn, and good morning, everyone. I'm pleased to share our third quarter results with you. Let's start with our financials. Overall, we delivered a strong third quarter with total revenue growth of 3% and adjusted EBITDA growth of 8%. Given our robust year-to-date results, we are raising our full year adjusted EBITDA and free cash flow guidance. Let me offer some highlights across our business. In Wireless, we delivered another strong quarter. We continued to reduce postpaid churn, delivering the best Q3 postpaid churn since 2009. We continued our strong ARPU growth and attractive, high-quality net additions. The team executed strong price discipline, adding the right customers with the right long-term economics. We continue to see a strong positive trajectory on lifetime value. In Cable, we reported solid results during one of the most intensely competitive back-to-school periods. We increased total service unit net additions by 5,000 over last year. We also added 35,000 Internet net additions. That's 6,000 more than last year and our best result since 2016. Despite the aggressive approach from our main competitor, we are pleased with our market share gains and footprint. In Media, we grew adjusted EBITDA while revenue was down year-over-year, and our margins were up over 300 basis points. Overall, we have made terrific progress and reflects our relentless focus on delivering consistent and sustained performance in our core business. More broadly, the macroeconomic environment continues to be stable, and we see strong growth prospects in Cable, Wireless and Media. We have a strong team, the right strategic priorities and solid momentum on our side. I am proud of what the team has accomplished and the growth prospects ahead. One of our key strategic priorities is to drive meaningful improvement in our customers' end-to-end experience. It starts with serving and…

Thank you, Joe, and good morning, everyone. I'm pleased to share some additional highlights from our strong performance this quarter. We continue to show steady growth in our service revenue while driving efficiency deeper and deeper into the company, which is resulting in meaningful margin expansion. On a consolidated basis, we reported total revenue growth of 3% and adjusted EBITDA growth of 8%. This reflects margin improvement of 180 basis points compared to the prior year while delivering solid operational metrics across the business. For 2018, we had set a full year goal of 100 to 200 basis point margin expansion improvement compared to 2016. We're tracking well ahead of that goal and to date achieved cumulative margin expansion of 270 basis points. Looking at our Wireless business, we reported strong service revenue growth of 5%, which reflected a combination of meaningful subscriber growth and ARPU growth. Our continuing ARPU growth is being driven by our disciplined approach to translating the increase in consumer demand for data along with our focus on base management. This quarter, we saw growth of 3% in blended ARPU and 4% in blended ABPU or average billing per user. We're tracking towards our goal of delivering full year growth of 2% to 4% on blended ARPU and 3% to 5% on blended ABPU, with year-to-date growth of 3% and 4%, respectively. Along with strong ARPU and ABPU growth, we also reported 124,000 postpaid net subscriber additions. Our commitment to improving the customer experience has resulted in churn of 1.09%, which is a 7 basis point improvement year-on-year. On adjusted EBITDA for Wireless, we reported growth of 8%. Wireless margins continued to expand this quarter by 90 basis points. We remain disciplined and focused on the longer-term growth of our business by balancing subscriber growth with…

[Operator Instructions] We'll now take our first question from Dave Barden from Bank of America.

I guess I had a few, if I could. The first one was, Joe, with respect to the Ignite TV rollout, you highlighted the higher ARPU and lower churn kind of early characteristics. Could you talk about the profitability characteristics, net of the kind of variable costs that come along with that product, at the margin? And does that kind of inform, Tony, some of your comments about margin might be kind of moving around a little bit in the Cable business? And then the second kind of related question is, you guys kind of set that 100 to 200 basis point margin expansion goal over a two-year period, which you guys have kind of blown through pretty nicely. Can you kind of maybe set a bar at the margin now to look out maybe a year or two years forward what you think the incremental cost savings opportunities might look like?

Thanks, Dave. Why don't I take the first one and Tony will give you the second question? On Ignite TV, first of all, we're pleased with the results so far in Ignite. It is early days. We launched the product externally in July, the goal really being to really harden a broader service experience. The platform is working very well. It's making sure that the processes around ordering, billing, installation and customer support are really kind of in great shape, and they're shaping up very well as a result of that effort. We do believe that the long-term profitability, in fact the long-term cash prospects of that business, are very strong. If you kind of take a look at it just broadly for a second, number one, in terms of an overall installation effort on the front end, it's a very -- much more simplified product to implement as a whole. If you look at the CPE requirements and the installation costs, we talked about that before, with legacy TV, we're running over about $1,000, one of the largest, for a full implementation. With Ignite TV, that's closer to the $400 range, and there's still opportunity to kind of compress that over the fullness of time. Add to it the fact that it's much easier to discover content for our customers, and we believe that's why we're seeing, even in the very early stages, strong ARPA uplift as customers have an easier time finding content and navigating their content, I mean, therefore, we think, a much easier time consuming content. We'll continue to find other ways of packaging and merchandising content in the fullness of time, which I think will help, again, with the economics of the business. We're pleased with the overall early days, and more to come on that point, Dave.

Picking up on Joe's comments, Dave, from a total cash flow perspective, we see opportunities both in terms of margin, but particularly in terms of reduced capital intensity for Cable going forward. Joe has talked about -- just talked about some of the opportunities of materially reducing our capital intensity from where it is now as the launch of Ignite TV continues. From a margin perspective, we see good opportunity to not only continue to grow ARPUs, but accelerate ARPUs and ARPA in particular. And then on a margin basis, we see the opportunity to expand margins. I don't want to get too far ahead of ourselves in terms of what that means, but with the product, we've taken the opportunity to simplify a lot of our processes and improve the customer experience. And as a result, that is dropping out costs. And you see some of that coming through already, but more to come. My comments in terms of lumpiness of margins was meant more in terms of the very near term. As we continue to expand, you can expect some lumpiness in costs like awareness advertising, for example. And so think about it in that context. But longer term, we continue to be very optimistic about the cash flow opportunities.

[Operator Instructions] We'll now take our next question from Vince Valentini from TD Securities.

Your Wireless ARPU or ABPU, whichever you want to focus on, clearly trending better than your peers' in the industry. So far this year, in this 3% range, call it, 3x higher than what the other two incumbents are doing. Is this a temporary thing in your mind? I mean, is the industry growth really 1% or lower and you won't be able to sustain this 3%-or-so range for much longer? So when we're looking at 2019, should we have level set expectations that your ARPU growth should be in the 0.5% or 1% range, same as Bell and TELUS? Or do you think you're still doing things with base management that will carry beyond this year?

I think that's -- first of all, it's -- I don't think it's appropriate for us to give ARPU guidance in the longer term, but I would say to you that we still see the fundamental growth and base management opportunities there in our business. The appetite for data continues with our customers. Any given cycle, there are customers that are arriving at our doorstep and customers that are leaving, and we're looking very carefully to make sure that we do a great job of managing that base and finding opportunities to focus on lifetime value. I think fundamentally, the industry continues to grow. And really, the onus is on us to continue making sure that we drive affordability for our customers at the same time drive economic value for our business. We don't believe that the industry growth opportunity, the behavior around people consuming data more and more over time doubling every 24 months or so. And then the opportunity for us in base management is substantial, and we believe there's still opportunity for us, therefore, in ARPU growth.

We'll now take our next question from Jeff Fan from Scotiabank.

I just want to focus on subscriber loading on Wireless for a second, particularly on gross adds. So this quarter, it looks like it was down a little bit from last year. You had great churn numbers, so the net continues to be very stable. But wonder if you can comment just what's going on in the market and what your observations are because gross adds had been growing and the market has been growing, and you guys were growing in the last few quarters. I wonder if there's anything that's happening there on gross loading. And then just a quick follow-up on CapEx. You -- on Wireless, wondering if you're -- you feel like you're spending at the right pace. And then just very quickly on Cable. I think, Tony, you mentioned -- or Joe, you mentioned about maybe sunsetting the legacy Cable service. Wondering if there's any timing that you can put around that.

Okay, first of all, on Wireless, Jeff, we're very pleased with our Wireless results in Q3, really believe it is a trifecta for us. We had very strong, high-quality net adds with strong lifetime value, strong ARPU at 3%, ABPU at 4%. And churn, churn improved by 7 basis points on top of the 10 basis points that churn improved Q3 last year. So 17 basis points in subsequent Q3s. In terms of the growth in the marketplace, we still continue to see the market growing. We exited last year, 2017, at 5% market growth. We saw about 6% market growth in the first half of this year. We really push the team to be disciplined in terms of price in the marketplace, focusing on high-quality net adds, and we're very pleased with the result that came out of that. We don't see any change to market growth penetration prospects. At the end of the day, we still think that there's an opportunity to work our way towards U.S. levels of penetration. As you know, Canada sits at about 87% wireless penetration. The U.S. sits at about 120%. I think we'll continue to see that march towards 120% over the fullness of time. How will it be reflected each and every quarter? It's kind of hard to say until everyone reports and we see all the results and really look back and say, okay, what was the growth like this quarter? But the macro conditions for continued growth in the sector, we believe, are still there. On the Wireless CapEx front, we do believe that we're making the right investments. We do believe that we've got the right plans in place. As we've said in the past, we made the move to 4.5G later in the cycle. I think it's…

We'll now take our next question from Drew McReynolds from RBC.

Maybe for you, Joe, first, just on the competitive environment in Ontario. We know it's always been competitive. It sounds like it was extremely competitive, and you still certainly managed through that well. Can you just talk a little bit more on both cable and wireless competition and kind of expectation as we get into a seasonally competitive Q4? And then second question, just on the iPhone upgrade cycle versus prior years. Is there anything that you're seeing that's unusual in terms of the upgrade dynamics as we've seen it to date at least?

Great. Thanks, Drew. In terms of the competitive nature of our business, I think it's fair to say it's as competitively intense as it's ever been and frankly across all areas of our business. Gone are the days where the Cable business was less competitive than the Wireless business. Frankly, both are intensely competitive. And in the residential business over back-to-school, there are a lot of people that are looking to hook up their service. It's more of an Internet-only kind of marketplace during the back-to-school period if you think about students. Having kids myself in university, I know exactly kind of the type of dynamic that's out there with respect to wanting to have simple Internet service and wanting a low price. So I think it creates a lot more intensity over that particular period of time. We feel we're well prepared for both the Cable business competitive intensity. We've got a great product, we've got a great team and we've got a road map that is quite exciting beyond just cable TV if you look at the Connected Home and where it's going. And we've got a team that's very much focused on execution. On the Wireless front, look, it's a very competitive market in Canada, has been for many years. Wireless is a shopper category. Every time there is a brand-new device that comes out, customers look up and say, hey, maybe I want that device, and so the intensity begins. We're very proud of the fact that we've got the best distribution in the country and proud of the fact that we've got good momentum on the Wireless front. And we have focus around sales and marketing that is respectful of the competitive dynamics, but also looking very carefully and specifically at base management and lifetime value as a whole. So I'll leave it at that in terms of the competitive intensity. In terms of iPhone upgrades, we're very excited about the iPhone XR. We're taking preorders for that phone, in fact, starting today. The only dynamic that's different, I guess, you could say, is that, yes, this year, we have a double-pronged iPhone launch with the more affordable device going second. The last launch was the other way around with the more affordable device going first. So of course, with every iPhone launch, there's a bit of a different nuanced dynamic in the marketplace. We're pleased with what we've seen so far from the iPhone Xs and Xs Max, and we're prepared for Q4 in our channels and across our business for what will be another busy season and a very exciting season for the Rogers organization

We'll now take our next question from Simon Flannery from Morgan Stanley.

Coming back to the 5G comments about UBC, can you just talk a little bit about what you think you need in terms of spectrum and in terms of infrastructure? There's obviously a millimeter wave auctions kicking off here next month, and then a lot of action in the kind of 3.5-or-so gigahertz band. Do you think you have what you need for 5G? Or what would you like to have to be able to compete? Is it -- and what bands are you trialing with UBC?

Simon, if you stand back and look at 5G overall, there are a few things that are fundamentally important to 5G. One you've hit on, which is spectrum, spectrum is very important. We have a strong base of 3,500-megahertz spectrum today. There is a 3,500 auction coming up in 2020, and that will become, I believe, the first tranche of important spectrum for the future of 5G and hopefully with millimeter wave opportunities for us soon thereafter. So -- but spectrum is an important part of 5G. The second thing that's very important around 5G are the economic use cases. We're all busy postulating where there might be strong use cases for 5G. At this point, there really are a series of trials and PowerPoint presentations. We're working hard to make sure we can find good environments where we can test the reality of some of these use cases, hence the UBC R&D collaboration. UBC has got a great engineering group very much focused on codeveloping some of these ideas and applications with us, and proving out both the technological and the economic use cases. It also helps with the third factor. The third factor is, in 5G we need access and attachment rights, access to poles, access to ducts, access to, call it, real estate rights if you want to call it that. And on that front, that's going to be a challenge for the industry as a whole. It requires cooperation across all levels of government, federal, provincial, municipal. It requires changes to the telecom act in making sure that everyone has access to various poles and capabilities and ducts and rights-of-ways to kind of integrate this infrastructure. One good thing about the UBC campus, it's a city within a city. And the university actually runs that city…

We'll now take our next question from Maher Yaghi from Desjardins.

I wanted to just -- maybe first question on Internet loading. Strong results compared to last year. Is it -- I wanted to just know if there's a bit more wholesaling activity going on in the third quarter of this year versus last year because -- the only reason I'm asking is the revenue generation from the subscribers was sequentially slightly down quarter-over-quarter versus last year. So just wanted to know if wholesaling was more successful this year than last year or it's mostly the competitive profile on pricing that's affecting the revenue line. And a follow-up just on 5G. Joe, you talked a lot on that, and thanks for that. And -- but I wanted to just ask you a question that is on many people's minds, is the timing difference between the cost that will be put to use to create this 5G environment and the timing of when the revenue generation will come from these new use cases might be longer in time basically between the revenue and the cost than the technological advancement we had previously in 3G and 4G. And would that create a bit more pressure on the balance sheet?

Okay, why don't I start with some comments broadly about Internet loading. Tony, I'm going to ask you to comment on the wholesale question around that and the ARPU as well. So first of all, Maher, thank you for your questions. We are pleased with what we're seeing overall in our Cable business. Revenue was up 1%. EBITDA was up 4%. And on a footprint of 4.4 million homes, we grew Internet additions by 6,000 to 35,000 overall. We did see Internet revenue go up 8% as a whole, which we think is a very strong number. And penetration is still very strong, continues to grow, we said, for 13 straight quarters in a row. Maybe, Tony, you can comment on the wholesale question and anything else you wanted to add to that piece.

Maher, a couple of comments. In terms of the sequential pieces that you see, it's really year-on-year that's more relevant. Q3 is highlighted by the back-to-school season, and so you get a different dynamic than you would have seen in Q2. And as Joe said, good performance on a year-on-year basis and particularly when you look at that performance relative to homes passed. And as we've said before, we continue to improve our penetration rates consistently every quarter on a year-on-year basis. And so in the third quarter, it was even above one point of penetration improvement. So we're pleased with that. In terms of where they're coming from and the impact of wholesale, I describe wholesale as one very small in the overall metrics. But importantly, relatively flat. So it really wasn't a factor on a year-on-year or even on a sequential basis. So I'd describe it as nonimpact. Hopefully, that answers your question.

On 5G, Maher, there's one important part of 5G that doesn't get a lot of airtime or attention because we're all focused on the kind of exciting use cases. But frankly, the most exciting economic use case is the ability to deliver network capacity, especially in densely populated areas, at a lower per-gig unit cost. And that's where the -- there is a level of energy going on right now on 5G. You're seeing it in building out small cells. You're seeing it in densely populated areas, in arenas and in places where there are a lot of people coming together, using their smartphones in a very intense way. So I think that is the best and most important and proven economic use case. That will be the first thing out of the gate. I think it'll help to kind of create good economics and, therefore, create some air cover, if you will, for some of the other use cases that will have a bit of a J curve, a bit of a J curve of investment. The thing is that the use cases that will have a J curve of investment will not require, I believe, massive CapEx investment. There'll be places where we can create overlay capabilities, if you want to call them that, build applications, et cetera. And then as the market penetration grows from those ideas, then we'll see the revenue come and the ability to actually continue to make further investments, right. Bear in mind that 5G is an overlay to a strong 4.5G network. It's a very important point. We're not ripping or replacing 4G like some other previous generation changes in technology. It is truly an overlay. And also, bear in mind that 3.5-gig frequencies can be added to existing high-band networks. So we've got the opportunity to kind of integrate this in a seamless, evolutionary way. The next-generation radios will support existing frequencies and support 4.5 and 5G. So we're getting economies of scale and scope with the latest radio technology. Because of our movement, again, in the later part of 4.5G cycle, we can take advantage of these economies in a much more meaningful way. And therefore, we think we're well positioned. We won't see that kind of gap between investment and financial return because that has been around with some of the previous technologies. Now we've all made the jump to 4G. It took a while for smartphone adoption to catch up and the rest of the -- it's a bit of a different game in 5G. Hope that helps.

We'll now take our next question from Aravinda Galappatthige from Canaccord Genuity.

Two for me, please. The first one on Cable. I wanted to get a sense, Joe, of the traction you're getting on the SME side and enterprise side in general. I know that remains an opportunity for you as incrementally it drives growth and profitability on the Cable side. And secondly, on the Wireless front, I guess connected to the early ARPU questions, we're starting to see the very large data buckets being offered. And I'm talking about the 10-gig-type buckets that are being offered fairly often nowadays on a promotional basis in the mid-70s. I was curious as to how that plays into sort of the medium-term ARPU growth picture. I mean, if you look at it headline-wise, obviously, $75 is a lot higher than your average ARPU, but much depends on what base of your subset are taking up those promotions. So I just wanted to get your thoughts on that and how that -- what that says about the health of the pricing growth on a longer-term basis in the industry. I'll leave it there.

Okay. Thank you, Aravinda. Thanks for your questions. On the small and medium front, I mean, overall, we're doing very well in very small business. Think of that as sort of 10 employees and below. We're seeing good growth in that area across capabilities that we have with wireline services, both Cable and related kind of value-added services, everything from point-of-sale capability, et cetera. We think it's a big opportunity because we still have a very small percentage of the market in that area. In the medium business space, we think there's also opportunity. There, it requires kind of leveraging some of the technologies and platforms from enterprise, but making them more shrink-wrapped and easy to configure and deploy in the middle market. So as we work on that piece of it as well, then we'll have opportunities to kind of grow penetration in the medium-sized market as well as the small business. It'll take time for this to show up in our results, but we feel very bullish around the opportunity. We'll look no further to the market share of our peers in Canada and the U.S. or their cable peers and telecom peers. We are underinvested in this area, and it is job one for our enterprise team to go after this opportunity. So more come on that front. It's still upside for us. On Wireless ARPU, it's a great question. There's no question that there's a huge appetite for data amongst our customer base. And there will be promotions that come and go through every period. It's just the normal course of our business because of the strong appetite that customers do have for bigger data buckets. The key for us is to make sure that we can deliver better unit costs and monetize that data growth in a better way. So that means we're looking across our business, both OpEx and CapEx, to make sure that the margin on a gig reflects the appetite of the base to want bigger data buckets. In terms of the ARPU impact of that, we continue to kind of focus on driving a strategy where we increase ARPU across different sections of the base based on my -- go back to my comments earlier on base management. I think there's an opportunity to both increase data consumption, monetize it better and then have a segment value-based approach to making sure that we manage the best of our abilities to grow ARPU in the process. So this is something that's been going on for a long time. This is not something that's new. And what you're seeing is just the fact that there's promotional intensity in Wireless from time to time with bigger data buckets.

We'll now take our next question from Richard Choe from JPMorgan.

Great. Just wanted to follow-up. Given the nice margin improvement and the guidance raise, how should we think about the dividend potential increase and maybe CapEx going forward? What should we be considering in terms of the margin increase versus the dividend?

Sure. In terms of the dividend, kind of reaffirm what we said in the past. We're playing the long game. And Tony referred to it. We're playing the long game. This is all about sustainable, long-term dividend growth, and there's nothing new to report on that front overall. Tony, you want to talk about CapEx?

Sure. On capital intensity, Richard, or CapEx overall, again, don't want to overreach into long-term guidance. But I think in terms of some of the pieces of it, we've been fairly consistent on Wireless capital intensity. Sort of see the range we're at now, somewhere in the 12% to 14% range, as kind of the ongoing capital intensity for Wireless which we think makes sense. And then on the Cable side, we intend, and you will see in the fullness of time capital intensity come down over the long term to peer levels. And so there's nothing new to report there either.

We'll now take our next question from Sanford Lee from Macquarie.

First off, guys, congratulations on the solid quarter and guidance raise. My question relates to the telco fixed wireless Internet solutions that are up in rural. Now we're seeing the technology has opened up another 800,000 of new, entirely broadband homes. So do you see this as a kind of a fit today? Or is it -- it's something that's still maybe a couple of years away as far as having a material impact on Rogers Cable?

Well, we're seeing the comments as you are, Sanford, coming from both Verizon and AT&T around their trialing and experimentation with fixed wireless. I'd tell you we firmly believe that a hybrid fibre and coax network has a lot of longevity and has really strong compelling economics. What I'd say to you is that if the economic case on fixed wireless and the technological reliability is proven on a global basis or on a very specific scale basis, then we will still look at it and find opportunities to integrate it into our network. We really look at it as our mandate is to deliver strong, reliable bandwidth and capability to our customers. And we are in a business where in some cases that's fiber, in some cases that's fiber and coax. In some cases, that might be fixed wireless for the last mile. It's still right now a very expensive solution, and it's also something that it will take time to really improve on the reliability. I don't believe that the technology is really ready right now to challenge coax and fiber. And therefore, we're going to maintain our current versus the -- yes.

If I can ask one quick one on the Wireless ARPU where, obviously, your growth hasn't -- you haven't seen really the slowdown in growth as your peers. And part of it, I think, is attributable to the positive impact by removing this year some of those contracts from the base. However, like you said, there's never been a point there with all this free data. Taking away the offers, do you think that's going to impact you going forward? Or are you still offsetting -- able to offset it with the higher-tiered plans?

Sanford, on the ARPU, yes, I had said in my opening comments I think for the full year, based on an IFRS 15 adjusted basis, we saw a full year ARPU growth of 2% to 4%, and that captures the impact of the government of Canada contract, which we said would be one point that declines over time as those customers move off of our network. And so we don't see anything that is materially going to change the trajectory of ARPU. As Joe talked about, the fundamentals in the industry continue to be there. And our execution in capturing that growth continues to perform well. So nothing that we see would suggest those coming off the trajectory.

We'll now take our next question from Dave McFadgen from Cormark.

Just a question on the Wireless EBITDA growth. Joe, you talked about reducing call volumes in the Wireless business. I was just wondering where you stand with respect to that because I know you have a target there and you'd like to bring that down. I'm just wondering if that is having much of an impact on reducing the costs in the business? Or is there still a lot of room there to take up costs on the call center?

I still believe there's good opportunity on that front, Dave. As I mentioned in my opening comments, digital adoption continues to grow. We saw that double from this time a year ago, and we still have a lot of opportunity on that front. A combination of increasing digital business penetration and adoption and then also working hard to take complexity out of our call center. In Q3 alone, we remediated some 100 different customer service processes and took complexity out of what our frontline teams have to deal with. And what that will do is continue to drive call volumes down. We think there's opportunity to chip away at that for the next number of years, frankly. At the same time, what it does do is it leaves our agents to really spend the time they need to spend with our customers on the most important conversations, not dealing with a particular error or lack of clarity, et cetera. Our goal, as you've heard me say before, is to be clear, simple and fair with our customers. And that is showing up in everything that we're doing. It's showing up in how we're improving processes, how we're driving digital adoption. And we continue to make investments in the smartphone apps that allow our customers across all brands to interact with us, and that'll continue to have opportunity for us in the very long term.

If I can just follow up or maybe push it a little bit more. I think you're targeting maybe a $50 million reduction in expense in the call center. I was just wondering where you stood with that and exactly what percentage call volumes are down.

We continue to drive improvement in call volume. I'm not going to get into the specifics of the numbers or the dollars for a whole bunch of reasons, Dave, but suffice it to say that the improvements continue year-over-year, and you see it reflected in our margin expansion, as being a key driver of margin expansion.

Ladies and gentlemen, we have additional time for one more question. And our last question will come from Drew McReynolds from RBC.

Joe, just back to, yes, kind of 5G-related IoT. Two questions on this. You put out an announcement about your LTE-M network in Ontario that you're building out now. Does that mean at some point presumably you shut down your 2G network, which is my understanding that's kind of in a lot of your M2M business? And does that kind of add an extra layer of cost savings in the equation at some point? And then secondly, I know you don't want to quantify your M2M revenue contribution, but just can you directionally comment on how it's been building over the last two or three years? Is this something that you wait for 5G and then this thing takes off? Is it a little bit more exciting right now? Then kind of just characterize it.

Great, Drew. Let me start from the end and work my way back. We are the market leader as it relates to machine-to-machine in terms of having the best share of the overall opportunities in the market. It goes back to the fact that originally, we were a sole GSM provider in the early days of modems for machine-to-machine, and we've maintained that lead through the move to LTE, et cetera. We continue to see steady growth in that business as a whole. Bear in mind it is still a very small percentage of the total Wireless revenue. We believe it'll accelerate as we grow capabilities. You heard me say earlier that we believe that 5G will bring 500x the number of devices. I think that's reflective of the fact that machine-to-machine will take on even greater proportion of the business opportunity for us as a whole. Yes, whenever you have multiple technology layers and multiple networks, there's always cost reduction as you decommission a network and repurpose the spectrum, et cetera. In the scheme of things, given the bandwidth consumption of machine-to-machine on 3G, it will produce some benefits and savings for us, but it's not of a material nature in size in terms of the overall cost reduction opportunities. It'll be helpful to us, but it's not like we're turning down a big, broad network. It is a layer on the 3G network.

Ladies and gentlemen, this concludes the Q&A session for today's conference. I would now like to turn the conference back to our hosts for any additional or closing remarks.

Thank you, Simon. I think with that, we'll close the call. Thank you, everyone, for joining us this morning and for your interest in Rogers. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.