Glenn Brandt: And then Sebastiano, on your second question around our focus and emphasis on reversing the revenue trend within our Wireline business. Cable is a scale business and similar to wireless, if you look at wireless, that scale is tremendously powerful when you execute correctly and focus on real growth. You’ve mentioned is it going to turn on price increases. Really, the emphasis here is on better execution around growing the subscriber net adds and the subscriber base. Leaning in on better execution around customer service, growing our network footprint, continuing to make gains, particularly in the West around growing our competitive offerings within the West and growing the net ads. And so the emphasis here really is, in particular, on growing the underlying business volume rather than anything else.
It comes down to execution and taking advantage of the scale. That really was the original promise in the acquisition initiative. And so that’s what we’re focused on.
Sebastiano Petti: If I can quickly follow up, Tony, just on the wireless side, but as Rogers, obviously, you’ve done a great job migrating to the premium brands. You talked about the underlying growth ex the migration of Shaw Mobile subs. But as we think — just thinking again just on the service revenue, is it going to be a similar kind of P-times-Q equation as we think about 2024 or do you think that we could perhaps see ARPU improvement, ARPU acceleration as you get — take the — business takes advantage of the goodness of the premium brand migration in 2023. So that’s just how I’m trying to…?
Tony Staffieri: Yes. The way we think about Sebastiano is to use your term, the P-times-Q. We continue to see very healthy growth on the Q or number of subscribers. In terms of ARPU, what we see is opportunity for ARPU growth, but it’s marginal. It will be in a solid 1% this year and we’ll need to continue to see the market dynamics. But I don’t want to over lead on the ARPU side of it.
Sebastiano Petti: Thanks again.
Paul Carpino: Thanks Sebastiano. Our next question Ariel.
Operator: Our next question comes from Vince Valentini of TD Cowen. Please go ahead.
Vince Valentini: Thanks very much. Hoping I can get two clarifications in and then a question. Glenn, were you deliberate in your commentary on the $1 billion of asset sales saying it will happen sometime in 2024 as opposed to you had been signaling by the middle of the year before?
Glenn Brandt: Some we will close in the first half of the year. Some might fall into the second half. We will execute at the earliest possible opportunity remains on pace with what we had tried to signal in. So I’m not looking to try and change any of the messaging. I’ll be happy if we continue at pace with where we are today, and we will continue to work that file ongoing through this year and beyond.
Vince Valentini: Fair enough. The clarification for Tony, you mentioned the over 5% or greater Wireless industry growth in 2023. Rogers obviously did better than that in the range of 6%. So when you say market 4% to 4.5% going forward, I assume you’re still talking about the industry and your hope would be Rogers does better than the industry?
Tony Staffieri: That’s right, Vince. The 4% to 4.5%, I would say is conservative in terms of our estimate. And so that’s one to note. And two, we expect to continue to lead with strong market share. And so that underlies how we think about top line growth for Wireless for this year, which ladders up to our consolidated guidance.
Vince Valentini: Wonderful. The bigger question I have — I’m surprised hasn’t come up yet is, I mean, churn, this is the highest churn we’ve seen in a long time. You seem to have managed around it with gross adds and ARPU and EBITDA all in good shape. But does this level of 1.67% concern you, is there something going on with competition in the industry that will keep churn this high or is there a way you can work to try to get it back down? And I’m wondering if you can help us link the cost of churn. It doesn’t show up in EBITDA seemingly, but your equipment receivables were up quite significantly at 433 versus 300 and something in the fourth quarter of last year. Is that where you see the pain of having to subsidize more gross adds a bit with the receivables? Thanks.
Tony Staffieri: Thanks for that follow-up, Vince. It’s important to unpack the churn. I’ll jump to the punchline, which is we’re not concerned about what we’re seeing on churn, and it’s for a few different reasons. It’s helpful to sort of unpack what you’re seeing. What we saw in the fourth quarter was a heightened level of what I would call promotional activity in the bottom end of the market, largely around flanker. We chose to focus and not that we neglected that segment, but our focus was on the premium. So when you look at gross adds for us, they’re up significantly year-on-year. The vast majority of those came in on the Rogers brand. And if we were to look at churn, there’s really two things there, one is most of it for us came on the Fido brand.
But equally, the other part you’re seeing, because we do extremely well in new to Canada and in particular, foreign students and temporary workers, what you’re seeing is a phenomenon as they come in and out of the country that’s driving a healthier gross add, but you’re seeing those churn numbers come through as well. And so that’s equally an impact. And so net-net, we sort of look at it and say, as long as we continue to lead on net, we’ve got the right balance across our various brands to ensure we’ve got robust ARPU as well. The second piece of it, Vince, that you’ve highlighted, the cost of switching has come way down for us. Cost of acquisition has become much more efficient. If you were to look at margin on equipment, for example, in the fourth quarter it was slightly positive in terms of margin compared to a $12 million cost to us in the Q4 of 2022.
So handset subsidy and cost ends up being neutral to slightly more positive. And as I said, the cost of transaction on acquisitions continue to come down — continues to come down. And you see that notwithstanding the substantially higher volumes year-on-year a nice margin improvement in our Wireless business of 70 basis points.
Vince Valentini: That’s excellent, Tony. So just to make sure I’m clear, you — the 1.67 is not a level that you think was undisciplined behavior by Freedom or any other flanker brand, something you’d need to retaliate against you’re comfortable that this as a manageable figure that you can work around?
Tony Staffieri: We’re not concerned about it. I’ll add as the final point, as we look to Q1 and we’re a month into it, I would say we do see — continue to see heightened churn on a year-on-year basis, but much less in terms of year-on-year as you would expect. And so again, not concerning for us.
Vince Valentini: Thank you.
Paul Carpino: Thanks Vince. Next question Ariel.
Operator: Our next question comes from Maher Yaghi of Scotiabank. Please go ahead.
Maher Yaghi: Great, thank you for taking my question. And if you can permit me with two clarifications like Vince had and a real question. So just on the clarification question on can you provide, Glenn, if you can, the pro forma growth rates on EBITDA for Cable and Wireless, excluding the acquisition of Shaw, I know it’s going to start to become less and less relevant going forward, but we’re still transfixed on that, I guess, the Street? Also, if you can maybe clarify the reporting dynamics over the 182,000 Internet subscribers that you took out from your reporting related to the Internet subscribers, how do these changes affect ARPA and the net adds, are they showing up somewhere else now, or they’re just not being reported? And I’ll wait and ask my real question after that. Thank you.
Tony Staffieri: Okay. Maher, I’ll start with the second question relating to Fido because it aligns with the strategy we’ve talked about of consolidating to the Rogers brand. So in Internet, in our base, roughly 4% of our total base. So we’re talking a real small number of Fido customers. What we’ve done because we discontinued that brand, the accounting is to take it out of the base. It doesn’t mean we are writing off those customers or ignoring those customers. We will actively look to migrate those customers to the Rogers premium brand, and we’ll account for those as base adjustments. So it has an immaterial impact on ARPA, and it has a new — it had an immaterial impact on our Internet net adds. What you saw in the Internet net adds was not impacted by what I would call that disclosure change.
