Moving core consumer products to single ordering and billing architecture is — I mean, has so many benefits; a more understandable bill, a better customer experience, obviously, you only have one architecture to manage, not multiple billers to manage, fewer manual kick outs, which means fewer people needing to oversee billing and fewer — shorter time to market when you want to make adjustments. So that’s something we were really focused on for the last several years. And thankfully, mid last year, we were able to start migrating customers. We’re going to continue to invest in our digital apps. We’ve been talking about that for several years now and it keeps getting better. Customer self-install continues to scale, especially where we — obviously, where we have fibre.
AI and generative AI are big opportunities that we’re going to harness at — more meaningfully in 2024 and especially beyond. On the copper decommissioning, up to 105 central offices, as I mentioned, and that’s going to keep growing over time. We’ve got too many legacy products, especially in the enterprise side, and we’re going to rationalize that, and that’s going to kind of make us leaner and better. I highlighted in my opening remarks the move to a single IPTV platform that has multiple benefits. Better product, better customers experience, that’s one. A single Fibe TV architecture across our entire operating territory. We’re not going to have three or four Fibe TV services, which we currently do. So, big cost savings there. And on the growth side of that is the addressable TV capabilities that are going to drive digital advertising revenue for Bell Media.
So, that one there has multiple benefits, from better customer experience, the better digital ad capabilities to lower cost structure. Real estate, always looking at that. We’re consolidating our vendors, managing our supply arrangements very carefully, standardizing contractor rates, in-sourcing where we can, terminating some long-term partnerships that we’ve had, some of which have been public. Like, these are all the things that we’re doing to drive costs out of the business and actually enable better growth.
Drew McReynolds: Comprehensive list. Thanks for that.
Operator: Thank you. The next question is from Simon Flannery from Morgan Stanley. Please go ahead.
Simon Flannery: Great. Thank you very much. Good morning. I wanted to just talk about the macro if I could for a minute. You talked a few times about potential recession being included in your guidance. And I want to really see what you were seeing on the ground today. I think you talked about higher business disconnects, as well as some lengthening of payable cycles and so forth. So, to what extent are you being cautious here, or you’re actually starting to see some signs? Obviously, you’ve talked a lot about media, but more in the communication side of the business? Thanks.
Mirko Bibic: Right. Okay. So, look, our guidance on revenue and EBITDA are pretty much in-line with previous years, but for the impact of the Best Buy transaction on product revenues. So, I mean, that’s one thing I’d say right off the top. So, we’re balancing kind of what we see as and the macro environment, but also the areas where we’ve done quite well, whether or not it’d be Internet or wireless loadings. We’re seeing on the enterprise side quite strong service revenue growth and kind of what we call the growth verticals, cloud service solution, security, automation, digitization, that kind of work that we do for our customers. Actually, we saw pretty strong organic solutions revenue growth at Bell Business Markets. And, of course, then that’s excluding the impact of FXI, which is also going to going to grow.
So, I think on the enterprise side, it’s a question of continuing to maintain our position in our core business, the kind of the legacy business while taking costs out of that business, continuing to harness the growth that we’re seeing on kind of the new solutions and improving the customer experience, that would be the — what we’re trying to do on the enterprise side. In the small business segment, we’re not really seeing too much downsizing and rationalizing, or too much of an increase in business closures. But like I said in previous quarters, we’re monitoring that carefully. And then, on the wireless side, I’d say, customer payment patterns are okay. We haven’t seen a material change, but again, worthy of further monitoring, and the environment remains pretty competitive.
But I have to say I was quite pleased in Q4 with how we managed the competitiveness. Like, we did a really nice job leveraging our premium brand strategy to load customers on the better network at higher ARPUs, and you can see that in our organic ARPU growth, and we’ve used the flanker, Virgin in particular, to better segment the customer base and serve the value segment. So, we’re resisting dropping price on the premium brand for the sake of saying that we’re loading customers on the premium brand. So, I mean, I think there’s still some upside there on the wireless side, and of course on Internet.
Simon Flannery: Great. Thanks a lot.
Operator: Thank you. The next question is from Tim Casey from BMO Capital Markets. Please go ahead.
Tim Casey: Thanks. Curtis, can we go back to your walkdown on free cash flow and your comment on working capital? Are you implying there’s a relief coming in 2025? Because you’re talking about those working capital items being one time in nature. I mean, I just think people are struggling with the walkdown on this and how you end up with free cash flow guiding below $3 billion. Thanks.
Curtis Millen: Yeah. Thanks for the question, Tim. I think there are a couple of things, and some of these things, unfortunately, will take more than one year to normalize out. I mean, if you’re looking at the one that I mentioned in terms of government subsidy build, so we’ll be building out over the next couple of years, and then the two years after that, it swings in our favor. Another one I’d mention, so in ’23, as supply chain normalize, our AR, excuse me, so receivables and inventory levels came down quite substantially, but that creates a year-over-year pressure where there’s no incremental or limited incremental improvement year-over-year. So, it was a win in ’23, but it’s already normal in ’23, so there’s no incremental win in ’24.
Tim Casey: Thank you.
Operator: Thank you. The next question is from Jerome Dubreuil from Desjardins Securities. Please go ahead.
Jerome Dubreuil: Hi, thanks. Good morning. One on network convergence. You do have a high level of overlap between your wireless and wireline networks, but you’re not 100%. We’re seeing competitors making strides and putting more focus on fixed wireless, even in urban areas. Is this something you are increasingly considering, or are you happy with your current addressable market? And maybe, also, is this possible in the context of network sharing agreement? Thank you.
Mirko Bibic: Hey, Jerome. We’ve had a fixed wireless product in market since 2018, and we had a pretty aggressive build target initially, which we had to scale back because of some regular regulatory outcomes and then forged ahead again when the regulatory rules got a little bit better in 2019 and ’20. By the way, another — it shows how regulatory decisions do matter. But we have a pretty sizable addressable market with fixed wireless. We’ve been selling our products since 2018. We continue to upgrade it, and it works in rural where you don’t — very well in rural where you don’t have fibre or DOCSIS cable. It’s my view fixed wireless access will never be competitive where there is fibre and top-tier cable. And then, in rural areas, you also have to appreciate, compared to 2018, there’s now Starlink as an option for customers.
So, long way to say, I’m happy with where we are with our addressable market on fixed wireless access, and how that product performed especially at the beginning when we launched.
Jerome Dubreuil: Thank you.
Operator: Thank you. The next question is from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.
Aravinda Galappatthige: Good morning. Thanks for taking my question. It’s on the adjusted EBITDA guide, 1.5% to 4.5%. Just wanted to understand sort of the lower end there. I mean, there’s obviously the benefit of the acquisition in media and then the $150 million to $200 million translates to somewhere between 1.5% to 2% roughly. Is it that perhaps you because of the ad conditions you’re assuming a steeper decline in media, is that what sort of dragging down that low end? I wanted to understand the low end of that range a little bit better. Thanks.
Curtis Millen: Yeah. Hi, Aravinda. Thanks for your question. I mean, the simple answer is it’s the same guidance as last year, but for the adjustment on the low end, which takes into account the range of $150 million to $200 million of cost savings. So that $50 million range there driven by our workforce reduction. So, in-line with last year’s guidance range.
Aravinda Galappatthige: Okay. But then, I mean, the acquisition obviously adds about [half a turn] (ph), isn’t that case? 0.5%?
