Quebecor Inc. (QBCRF) CEO Pierre Péladeau on Q4 2018 Results - Earnings Call Transcript

|
About: Quebecor Inc. (QBCRF)
by: SA Transcripts
Subscribers Only
Earning Call Audio

Quebecor Inc (OTCPK:QBCRF) Q4 2018 Earnings Conference Call March 13, 2019 11:00 AM ET

Company Participants

Marc Tremblay - Chief Operating Officer, Chief Legal Officer and Corporate Secretary

Pierre Péladeau - President and Chief Executive Officer

Hugues Simard - Chief Financial Officer

Jean-François Pruneau - President and Chief Executive Officer, Vidéotron Ltd.

France Lauzière - President and Chief Executive Officer, TVA Group Inc

Conference Call Participants

Maher Yaghi - Desjardins Securities

Vince Valentini - TD Newcrest

Drew McReynolds - RBC Capital Markets

Matthew Griffiths - Bank of America Merrill Lynch

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Quebecor Inc. Conference Call. I would like to introduce Marc Tremblay, Chief Operating Officer, Chief Legal Officer and Corporate Secretary of Quebecor Media Inc. Please go ahead.

Marc Tremblay

Welcome to this Quebecor conference call. Again, my name is Marc Tremblay, and joining me to discuss our financial and operating results for the fourth quarter and full year 2018 are Mr. Pierre Péladeau, President and Chief Executive Officer; Mr. Hugues Simard, Chief Financial Officer; Mr. Jean-François Pruneau, President and Chief Executive Officer of Vidéotron; and France Lauzière, President and CEO of TVA Group.

You will be able to listen to this conference call on tape until June 13, 2019, by dialing 877-293-8133, conference number 1243153 and pass-code 48006#. This information is also available on Quebecor's website at www.quebecor.com.

I also want to inform you that certain statements made on the call today may be considered forward looking, and we will refer you to the risk factors outlined in today's press release and reports filed by the corporation with regulatory authorities.

Let's now move on with our first speaker, Mr. Pierre Péladeau.

Pierre Péladeau

Mark and good morning, everyone. So reviving the year 2018 I guess that proud to say we are very pleased with our financial and operating performance. As we posted 7% or $115 million EBITDA growth for the year and 8% EBITDA growth in the fourth quarter, our best performance in the recent years.

2018 also marked the end of 18 years partnership with our long-standing ally, Caisse de depot et placement du Quebec. As we completed the repurchase of Quebecor Media shares it previously own to become the sole shareholder of Quebecor Media, while maintaining a very favorable leverage ratio and thus preserving operational and financial flexibility.

As always, our telecom segment led the way in 2018 with 8% annual EBITDA growth, one of its best performance ever, propelled by the 14% increase in mobile revenue as we surpass 1.1 million subscribers.

The launch of our new 100% digital wireless and Internet brand fees further position us favorably in the mobile telephony market in Québec. We also unveiled Helix our renewed IPTV platform, which we will launch later this year with a promise to deliver an enhanced TV experience, a seamless integration of web content platforms, home automation services as well as the smarter and more powerful Wi-Fi experience.

Despite significant headwind and a challenging advertising revenue environment, our media group continue to position itself more favorably by diversifying its sources of revenue and complementing its service offerings, most notably through acquisitions such as the Évasion and Zeste specialty channels, LC media book and digital publishing activities specialized in the automobile industry and branded [indiscernible].

The Audio Zone post production services which propose rich life French language video content production and worldwide distribution capabilities. In addition MELS Studio continue to establish itself as a reference in the growing markets of turnkey video production and postproduction value-added services.

Finally, QUB Radio our innovative 100% digital platform which proposes rich live French language radio content and podcast as generated more than one million downloads since its launched in October and is now reaching an audience of 150,000 active listeners to reach.

Our Sports and Entertainment segment, continue to grow with 91 cultural and sporting events presented in the [indiscernible] in 2018, an increase of 8% over 2017. Moreover, after only three years of operations the [indiscernible] radio ranked fifth amongst Canadian arenas in terms of get revenues.

In addition, we acquire [MPEG4] (Ph) the number one label in Québec in the cross over music zone, and are further positioning ourselves as the for the creation, production and distribution of light events and entertainment content in Québec. There by seeding our multiple distribution platforms within the Quebecor Group.

I will now let Hugues review our consolidated financial results. Hugues.

Hugues Simard

Good morning, everyone. Before reviewing our financial results for the fourth quarter and full year 2018, I remind you that in December, Vidéotron announced to sell it is 4Degrees data centers.

As a result of the announcement, we have reclassified the 4Degrees operating and cash flow statement as discontinued operations in our income and cash flow statements. The sale closed on January 24th of this year for a nontaxable amount of approximately $262 million fully paid in cash and resulted in a gain of $118 million.

In the fourth quarter Quebecor’s revenues were up 3% to $1.1 billion as revenues from our telecom segment grew also 3% to $866 million. Quebecor and our telecom segments EBITDA were both up 8% in the quarter to $450 million and $426 million respectively.

On the strength of its EBITDA growth, we reported net income attributable to shareholders of $117 million in the quarter or $0.46 per share, compared to a net income of $70 million or $0.29 per share reported in the same quarter last year.

Adjusted income from continuing operations, excluding unusual items or gains or losses on valuation of financial instrument came in at $133 million in the fourth quarter or $0.52 per share compared to $83 million or $0.35 per share reported in the same quarter last year.

This 59% increase reflects the improvement in our operating profitability, combined with the favorable leverage effect on our results resulting from the repurchase of QMI shares previously held by our minority shareholder.

Quebecor Media's consolidated free cash flow from continuing operating activities decreased from 131 million in the fourth quarter of last year to 123 million this quarter explained primarily by higher CapEx, unfavorable change in non-cash balances related to operations, and higher cash interest expense, partially offset obviously by EBITDA growth.

For the full-year consolidated revenues were up 1% to $4.2 billion, and EBITDA was up 7% to $1.7 billion. Adjusted income from continuing operations, excluding unusual items, and gains or losses on valuation of financial instruments came in at $468 million or $1.96 per share, compared to $348 million or $1.44 per share reported last year.

Consolidated free cash flow from continuing operating activities reached $679 million for 2018, its highest level ever, up $224 million from $455 million in 2017. As of the end of the quarter, excluding ladders of credit issued as pre-auction deposit for the 600 megahertz spectrum auction, our net debt to EBITDA ratio was 3.2 times, up from 2.5 times reported as of the end of the fourth quarter last year. Explain primarily by the cash settlement related to the purchase of the shares owned by Cassidy book.

Recently, we amended and extended, Quebecor, Quebecor Media and Vidéotron’s revolving credit facilities to July 2020, 2022 and 2023, respectively. We also increased the maximum amount available under Vidéotron's facility from $965 million to $1.5 billion and reduced the maximum amount available under Quebecor's facility from $300 million to $50 million.

Available liquidity of more than $1 billion as of the end of the quarter, still access the capital markets, financing and free cash flow generated by our operations are more than sufficient to cover near-term debt, maturities and to provide spectrum purchases.

In the third quarter of 2018, we sent the redemption notice to redeem 100% of the remaining $362.5 million of principal value of our convertible debentures and accordingly we fully redeemed the debentures by issuing 30.1 million Class B shares on October the 12, 2018.

In the quarter, we purchased and cancelled 3.9 million Class B shares. Since we initiated our normal course issue or bid program eight years ago, 31.1 million Class B shares have been purchased and canceled offsetting the dilution impacts created by the share settlement of our convertible debentures.

I will now let the JF review the telecom segment operations.

Jean-François Pruneau

Thank you, Hugues and good morning everyone. So before starting the operating review, I would like to thank the executive management team and all the employees for their warm welcome. I’m very excited to be part of and work side-by-side with such a dynamic team with the objective to build the Vidéotron of tomorrow.

We had a fantastic year filled with greater financial performance. The unveiling of our new Helix platform and the launch of our new mobile and Internet brand Fizz as well as our continued partnership with the Open Sky Lab V an innovative 5G field testing platform.

All these new exciting accomplishments were crowned by many honorable distinctions that we received some of which we are pleased to share with you today. First Canada’s top 100 employers and Montréal top employers in 2019. Second, according to LAJ surveys the coolest telecommunication company amongst the generations of people aged between 13 and 34 years old and third, according to Forrester the best customer experience in Canadian mobile and TV services.

We are pleased to report continued strong financial and operating results in the fourth quarter. We recorded growth of 34,000 RGU fueled by sustained growth in wireless and Internet services, which combined with strong operational leverage allowed us to deliver a solid 8% of the DA growth for the quarter.

For the full year, we exhibited growth of 109000 RGU and an EBITDA growth of 8%. Late November of 2018, we launched Fizz, although we encountered some unexpected technical issues following the launch and the relative spike in targeted tactics from competition around the launch season. We are pleased with the success of this new service offering thus far.

Wireless services therefore continue to lead our revenue growth. As of December 31st, we reached 1,144 54,000 activated lines, including Fizz supported by growth of 33,000 lines in Q4, which contributed to a 13% service revenue growth.

Overall, we recorded growth of 130,000 lines or 13% over the last 12 months, which contributed to a 14% service revenue growth for the full year. Including Fizz, we captured more than 25% of total gross activations in our market in the quarter despite a much weaker year-over-year Black Friday season.

More importantly, the traction of our combined mobile offerings is currently accelerating, and after two months in 2019 our total mobile subgroup exceeds 2018 by 10,000 subscribers. Wireless ABPU slightly decreased to $53.25 from $53.56 recorded in the fourth quarter of last year, mainly resulting from the continued success of our BYOD offers, which represented more than 50% of customer add during this quarter.

We exhibited monthly churn of 1.4% a touch higher than last year, primarily explained by the relative spike in competition in Q4 and the weaker Black Friday season. We continuously work to further engage our BYOB customers in order to increase customer lifetime value.

In our broadband services, we posted growth of 7,000 customers in the quarter, for the full-year, we added 38,000 customers and reported a service revenue growth of 5%, driven by both customer and ABPU growth. We recently introduced our 400 megabytes per second internet service in all of our markets.

Capitalizing on the positive results of our Fizz mobile brand, we just completed beta testing our Fizz internet service similar to the Fizz mobile experience, we are targeting a younger audience with a 100% digital experience, allowing them to honestly manage their internet plans, including innovative features and loyalty rewards.

In cable TV, we recorded a decline of 6,000 subs in the fourth quarter, 2,000 lower than last year and in cables offering, we recorded a decline of 17,000 customers similar to last year. As of the end of the quarter 421,000 customers subscribed to Club illico our over-the-top video service, representing a growth of 59,000 customer or 16% over the last 12 months.

In January of 2019, Club illico launched a new thriller series [Indiscernible] which surpassed an all-time record with over one million viewings in less than week. We continue to invest an exclusive and locally produced content in order to differentiate ourselves from our competitors and leverage the value of Club illico to attract customers to our telecom services, as well as reduced churn rates.

On the technological front, we continue to make great strides in deploying our new connect and own experience. Our new platform, Helix was unveiled last October. Employee trails are well underway in anticipation of a soft commercial launch in the coming weeks.

We are confident that Helix will revolutionalize not only the way we support our customers and their digital home, but also provide a customer experience that goes beyond connectivity and entertainment. We are pleased to announce that we have reached an agreement with our first OTT content provider YouTube.

On the consolidated financial front, revenues amounted to $866 million, in the fourth quarter compared to $842 million in the same quarter of 2017 or a [3%] (Ph) growth. This is primarily due to RGU growth, mainly in mobile and internet services. For the full-year revenues grew 3% to 3.4 billion.

In our B2B segment, revenues increased by 4% in the fourth quarter and 6% for the full-year, pro forma itself of 4Degrees collocation datacenters mainly due to RGU and ABPU growth in our wireless and internet service. For the full year wireless revenues and net-adds grew 15% and 16% respectively.

We recorded solid EBITDA of $426 million in the fourth quarter compared to $395 million in the fourth quarter of last year, representing an 8% growth. Revenue growth ongoing initiatives to improve our cost structure and favorable non-recurring gain of seven million recorded in the quarter contributed to our EBITDA growth.

Our ability to maintain industry-leading EBITDA margins without compromising customer experience demonstrates our continued cost disciplined and our ability to leverage operational efficiencies. Wireless EBITDA grew 43% in the quarter and 45% for the full-year.

For the full-year, we generated $976 million in cash flow from segment operations, compared to $816 million during the same period of last year. Net CapEx including acquisition of intangible assets amounted to 191 million in the fourth quarter an increase of 16 million from the fourth quarter of last year. For the full year net CapEx amounted to $701 million or $4 million higher than last year.

Wireless CapEx amounted to 40 million in the quarter and 88 million for the full year. In 2019, we expect our CapEx spending excluding spectrum licenses to range from $725 million to $800 million, including our IPTV investment program requirements as well as wire line and wireless network maintenance and upgrades.

I will now turn it over to France to review the media segment performance.

France Lauzière

Thank you, François and good morning. Consolidated revenues for TVA group decrease five million or 3% in the fourth quarter from 165 million to 150 million. Primarily due to an 8% decrease in advertising revenues from our conventional TV network, a lower volume of activities in the commercial production as well as 17% decrease in advertising revenues on our TV sport channel. Partially offset by a 12% increase in subscription revenue from the specialty channel as a result of various retroactive adjustments.

Underrating response, our overall viewership market share reached 36.6% with the peak of 38.2%, our best results ever fueled by the excellent performance of our specialty channel which increased 1.4%. Magazine publishing revenues declined 14% mostly due to a 24% decrease in advertising revenue resulting impart from a reduction in the number of issues published combined with an 8% decrease in new and revenue and the sale of the hot news.

MELS revenues increased 14% in the fourth quarter to 19 million fueled by growth in post production as well as some page and equipment rental activity. Resulting impart from the acquisition of Audio Zone and [dilemmas] (Ph) last year.

IPTV group EBITDA reached 25 million for the fourth quarter an increase of two million compared to the fourth quarter last year. Our broadcasting segment reported EBITDA of 17 million an increase of $0.3 million over last year. The magazine segment recorded EBITDA of three million up 0.6 million while MELS post EBITDA of five million, 1.1 million higher than last year.

For the full year TVA Groups revenue amounted to 552 million a 38 million or 6% decline year-over-year. Advertising revenues from our broadcasting activity decrease 8% to 246 million and subscription revenues from our specialty channels increased 1% to 126 million.

Our magazine business posted a revenue decrease of 18% to 78 million for the full-year and now recorded a 2% revenue increase to 68 million. TVA Group recorded EBITDA of 15 million for the year, a decline of 24% as our broadcasting activities EBITDA declined 35% to 27 million, MELS EBITDA increased 3% to 16 million and our magazines EBITDA declined 18% to eight million.

Cash flow from segment operations amounted to 21 million in the fourth quarter, a two million increase over the last year. For the full-year cash flow from segment operations amounted to 37 million, six million lower than in 2017.

Let me now turn the floor to Pierre.

Pierre Péladeau

So looking forward, I believe our operations are well-positioned to continue to deliver superior financial and operating performance in 2019, while pursuing investments in strategic initiatives that will support our long-term growth and success.

With France Lauziere and Francoise Bertrand along with our experience in long-standing executive adding our various activities, I’m confident that we will continue to meet our ambitious operating targets and deliver leading financial performance.

I thank you very much for your attention and operator, we can now open the lines for questions.

Question-and-Answer Session

Operator

Alright [Operator Instructions] But we do have a few questions going up. First question from Maher Yaghi from Desjardins Securities. Please go ahead.

Maher Yaghi

Thanks for taking my question, So I will start with just the wireless business with the launch of MELS, if you can comment a little bit on the success you have had with the product so far and following your comments that you are running rate of net-add it is progressing well in Q1. Could you mentioned or say what is behind that improvement, is it Fizz that it is now taking off or your marketing campaigns on the Vidéotron brand that is working better?

Pierre Péladeau

Sure. Thanks Maher for the question. Well, we are currently very pleased with the success so far of Fizz, obviously we launch November - as you know we loaded-up quite nicely for the first few days for a few weeks and we experienced some I would say technical issues.

And following that we pulled up on our marketing campaigns, so it obviously impacted somewhat our performance for the balance of Q4. I would say as well that obviously the incumbents were prepared for a launch, so they were - I would say a very aggressive especially on enter promotions for the Black Friday season, and same as well for the Christmas periods.

So the performance was good in Q4, but obviously impacted by the technical issues that we experienced. That being said, since that has been settled and our marketing campaigns are now underway, the success in Q1 is incredible much higher than our expectations.

And we think it continues and now that we are going to be launching our internet brand we feel that we are well targeting the younger audience or the younger generation with a product that is fully designed or well-designed for them and we certainly seeing that for the Internet as well we are going to show some success there.

Maher Yaghi

Okay, so following up on that comment, given that Fizz was not an important driver for Q4 and net- ads, how would you comment on ARPU trend in the quarter and the decline year-over-year that has been a while we haven’t seen that with your business. How do you expect that to change in Q1 since now you have Fizz in the line-up. And just one last question on the IFRS 16, we evaluated the impact of IFRS 16 on your business to be about $43 million impact positively for EBITDA. Could you give us maybe a more precise number for 2019?

Pierre Péladeau

Okay, I will start with the ARPU question, IFRS 16, I don’t have the number on close to me, so we will probably have to double check for that one, but let’s start with ARPU. I think that while I was CFO, I was pioneering the table saying you know guys our model is different than the incumbent, our model is really based on BYOD.

We are over indexing the BYOD market and as a result it commenced a lower ARPU, but a higher EBITDA and a higher lifetime value and Q4 was no difference than it was in the previous quarter.

So the ABPU or the ARPU has been obviously influenced or impacted the growth has been impacted by the BYOD success with more than 50% of our customers acquisitions that was coming from that segment of the market and obviously business of BYOD services well.

So if we get some success with Fizz, you have to assume at least in the short-term that we could have the same kind of trend with respect to ABPU but with an 8% EBITDA growth to me it looks like the model is working well.

That being said, over the long run I’m convinced that consumer are looking for more wireless data, for more wireless speed and eventually lower latency and that is something that we are going to be able to monetize an overall I think that industry is going to see improved ARPU.

Maher Yaghi

And if you can provide us maybe with just - after the call maybe just valuation on IFRS 16 for the model.

Hugues Simard

Yes. We will have the follow-up.

Pierre Péladeau

I will provide it to you Maher.

Maher Yaghi

Thanks.

Operator

Alright. Next we have a question from Vince Valentini from TD Securities. Please go ahead.

Vince Valentini

Yes thanks very much. Maybe just - first deepen your notes there is a number of 47.7 million as the EBITDA boost from the IFRS 16. So if you want to just clarify that is the right number to use. And question is more for JF to come back to wireless. Totally agree with you on the profitability of BYOD in distorted if we just focus on ARPU, maybe I can hear from couple different aspects.

One, I’m not sure why you don’t disclose ARPU for us as well, because its more flattered number for you, these don’t have as much equipment revenue boosting the APRU as some of your peers do, but when we calculate that from your service revenue I mean it was up slightly year-over-year. So maybe you can comment on how you think of ARPU trends backing out the equipment portion so that makes ARPU look a little weaker.

And then second on that, can you confirm 43% EBITDA growth you are using IFRS 16 both in Q4 this year and Q4 last year to get that, if that is a case it looks like EBITDA for wireless is up of the 83 million year-over-year in the fourth quarter. Your service revenues only increased 16 million. So yet again it's a remarkable more than a 100% of your incremental revenue flowing to EBITDA, it’s great and it shows the power of that mix you are talking about.

But can you give us any sense of how that trends in 2019, I can't imagine that you have over a 100% flow through forever maybe there is some timing issues and you will start to see that incremental margin or operating leverage start to accelerate a little bit as we lap some of those huge EBITDA gains in 2018, any color you can give on that it would be great? Thanks.

Jean-François Pruneau

Well thanks Vince. Well first of all we will start with the second one. The flow through of the wireless business is essentially related to the increasing and increasing share of BYOD subscribers, which we don't have to subsidize, it's as simple as that, obviously there is operating leverage as well, but the biggest component is coming from that part.

So as we continue to increase the share of BYOD subscribers, to me it's mathematical, we don’t have to subsidize or we subsidize less than the previous year and it helps on the margin and on the flow through.

Obviously if the trends changes and now we are getting more a higher proportion of subsidized customers then I got to have say that we are going to have to subsidized and obviously we are going to have more expenses. So it's to me it's just a reflection of that and some operational leverage obviously on the expense side.

In terms of the ARPU, we have taken some decision with respect to the reporting and we think that is the right things to do, but in terms of the trends, the trend are the ones that you are seeing and I can confirm that we think that the overall over the long-term with data revenues increasing and speed increasing and whatnot, I'm really positive that at some point we are going to see an increase in overall ARPU.

Vince Valentini

Thanks.

Marc Tremblay

We will go to the next question please.

Operator

Alright, next question comes from Drew McReynolds from RBC. Please go ahead.

Drew McReynolds

Thanks very much, good morning. A couple from me. First on the CapEx guidance, maybe can you comment on ultimately what are cable wireline CapEx curve looks like with the X1 feeding into the equation and ultimately, I suppose longer term you get the CP savings that your Canadian peers will get just wondering what that curve looks like. And then secondly, just in terms of your capital return priorities, we have obviously seen you be very active on the buyback at the same time committing to raising your dividend payout to your targeted range over the next four years. Just wondering how your balance between the two in the near-term and what that kind of pleasing of dividend growth looks like? Thank you.

Pierre Péladeau

Thank you for the question. I'll take the first one, Hugues is going to follow-up with this the second one. With respect to our wireless guidance $725 million to $800 million, we are going to be launching soon Helix, obviously we are going to have some other stuff to do on the CapEx side Helix since its going to be soft launch.

That being said, I think that in terms of CPE savings and whatnot, this is not something for 2020. I don't think we are going to see the number of customers to the platform that will provide for our major savings on the CapEx side on the CPE side, specifically.

That being said I think from a wireless prospective we will probably see a little increase in terms of wireless spending with the 4.G that we are starting to working on and preparing ourselves for 5G, we are looking for sites to install antennas and whatnot.

There is some work that is going to be done on that way, so we will probably see a little increase on the wireless front. But as for the savings on the truck rolls our installations and CPEs you know I don't think it’s going to be material for this year.

Hugues Simard

On the cash flow, a couple of comments. First of all on the NICD, we have basically reached our maximum and our program runs until August 15th, but we pretty much bought everything we can according to the full percent of rules by the stock exchange. So that is going to be quite over the next little while.

That being said with our forecast of cash flows and going forward, I think we are comfortable with the NICD going forward that ranges to be seeing obviously, but at this point, I think we are comfortable with the NCID continuing further and we have been very clear as well on the dividend side of reaching between 30% and 50% of our free cash flow within three years.

And I think we are on track to do that and we will continue certainly on those footsteps. So there should be no change as far as we are concerned, we are pretty confident that our free cash flow is going to allow us to continue on both fronts.

Drew McReynolds

Okay. Thank you very much.

Operator

Alright. Next we have question from Matthew Griffiths from Bank of America. Please go ahead.

Matthew Griffiths

Yes, hi. Thanks for taking the question. So I just wanted to ask about the growth trajectory for the wireless EBITDA and I know you are focusing on increasing the percentage of growth as they come BYOD, but you mentioned in the past you deployed tactics to kind up sell these customers as time goes on to help keep them there and increase ARPU. So I’m assuming a big part of those tactics are offering them subsidized handset deal. So I mean as these customers that you have been accumulating roll into those subsidized sales offers that I'm guessing maybe you can confirm that you are using. Should we start to see that impact EBITDA kind of growth?

Pierre Péladeau

That is a good question Matt. You would all be surprised for how long these stay as BYOD customers with us and obviously what we are selling with BYOD is not only price. Some would think that they are choosing BYOD because it’s a lower price and they are choosing Vidéotron because it’s a lower price, but at the end of the day I think we are offering more than that.

And we are offering a 360 and you know offer to them including content, Club illico Mobile, that is something that is not offered by anyone else but us and obviously that is that attracts customers as well and they stick to us even though they remain on the BYOD package it's got that way because of those kind of future.

We have the best customer experience once again for us - for this year has rated as the best customer experience in mobile services across Canada and were a regional operator. So all of those kind of things and the bundle, if you add-up to that the bundle of other telecom services you would be surprised how long they stay with us with BYOD packages.

That being said, when they are prepared and we are obviously proactive on that front to switch them to a subsidized package or a subsidized handset cost package we are ready for them and they stick with us. If you look at the churn rates it's slightly moved-up, but it's nothing out-of-control. So I would say that I think we have the right tools to attract and retain our customers even though they stay on BYOD packages.

Matthew Griffiths

Okay, thanks. And one more if I may. Just on the topic of the churn how much of your churn do you think is related to your wireless customers also having maybe two other services with you. I know in the past I think have to go back almost 2.5 years to get a number that you said a 50% of the - I think at that time 50% of the mobile customers also have a wireline product, is that growing and perhaps part of the reason for the churn being low?

Pierre Péladeau

Absolutely, you are perfectly right. When you look at churn rates customers, as they add new services with us, churn rate goes down. Once a single service customers at Vidéotron churns on average of 20%, when he has another product on average of 10%, when he has the third product on average at 4%, and when you get the full four quietly a bundle the average churn rate on an annual business is 2%. So, obviously, we have a pool of potential customers within our own shop which we are targeting and it certainly contributes to key churning control.

Matthew Griffiths

Okay, thanks.

Operator

Alright, and the last question we have comes from [Indiscernible] from Cormark Securities. Please go ahead.

Unidentified Analyst

Hi good morning. Just for David McFadgen. So just referring back to our wireless comments that we made earlier, I know you cleared up a lot of your in terms of ARPU growth being limited by BYOD plans, but just a quick question on the industry trends. So we have seen that over the last year as the data buckets grew much faster than the data demand growth. So how much of that is affecting that ARPU growth of Vidéotron or is it purely just from the BYOD plans?

Pierre Péladeau

You are right. It certainly has an impact, as the data buckets move-up - the size of the data buckets move-up, certainly there is some average revenue that were compromising here, there is no doubt in my mind, but it's not the major part of our impact on ABPU or ARPU growth.

Unidentified Analyst

Right. Okay, just quickly on the cable side as well. So for Internet and we saw subscriber growth kind of softening throughout the year and I assume that the revenue growth during the quarter was driven ARPU growth at this level. So do you see similar trends going forward in 2019 where the net adds in - as well as the ARPU growth or do you see ARPU growth sort of flattening Internet grow over 2019.

Pierre Péladeau

Yes. We have just put in our price increases for the year. I have to say that they stick quite well better than the previous year. So I'm confident on that front. The Helix platform or the Helix service will also contribute, because it will probably be priced at the premium, because we deliver a better customer experience and since we are going to be operating with the two services illico and Helix for a while, we will probably position the pricing of Helix a bit higher. So from an ARPU perspective, I’m quite confident that we are going to continue to see growth there.

Unidentified Analyst

Alright. Okay and last one for me. If I heard clearly there is a partnership with YouTube in place, can you provide some more details on that?

Pierre Péladeau

No. But just that we have access to their content through the Helix platform and when we are going to be working or when our customers will be working with the search engines, the YouTube content will be part of that.

Unidentified Analyst

Okay. Alright, thanks. That is it for me.

Pierre Péladeau

Alright.

Hugues Simard

Good.

Pierre Péladeau

So we thank you all of you for your attendance. We will talk to you at next conference call next quarter. Thank you very much and have a nice day.

Operator

Ladies and gentlemen this concludes the Quebecor, Inc’s financial results for the fourth quarter 2018 conference call. Thank you for your participation and have a nice day.