Cogeco Communications (OTCPK:CGEA.F) Conference Transcript

Cogeco Communications Conference Summary Company Overview - Company: Cogeco Communications (OTCPK:CGEA.F) - Date: November 24, 2025 - Speaker: Patrice Ouimet, CFO Key Points Industry and Strategic Positioning - Wireless Deployment: Cogeco has launched a wireless service in Canada as an MVNO, offering 4G and 5G services bundled with internet subscriptions, which is a significant strategic shift for the company [2][4][5] - Bundling Strategy: The company aims to achieve a bundling rate of 15%-20% over several years, similar to large US players, with initial projections indicating a slow start [4][5] - Churn Reduction: The bundling of services is expected to reduce customer churn, although the benefits are still being evaluated [5] Fiber Competition - Market Stabilization: Recent observations indicate that fiber competition in Canada is stabilizing, with less aggressive promotions from major competitors like Bell and TELUS [6][7] Brand Strategy - Cogeco Brand Expansion: The company has launched its Cogeco branded internet service in Montreal and acquired Axio to target a younger demographic with a digital-only brand [8][9] U.S. Market Dynamics - Subscriber Trends: There are signs of improvement in subscriber trends in the U.S., particularly in Ohio, where the company has invested in network capacity and stability [11][12] - Competitive Strategies: Different strategies are employed based on regional competition, with a focus on high-speed internet offerings [13][14] Network Evolution - Selective Fiber Conversion: Cogeco is converting coax lines to fiber selectively, targeting areas with higher market penetration to optimize costs [16][17][18] Operational Efficiency - Streamlining Plan: The company is in the second year of a three-year transformation plan aimed at improving operational efficiencies and decision-making [19][20] - Cost Reduction Initiatives: Implementation of AI and chatbots has improved customer service efficiency and satisfaction [21][22] Capital Expenditure and Growth - Reduced CapEx Expectations: The company anticipates a return to lower capital intensity, which may impact future growth slightly, but ongoing builds in new neighborhoods will continue to drive growth [23][24][25] - Free Cash Flow Guidance: The company is on track to achieve CAD 600 million in free cash flow by fiscal 2027, aided by reduced CapEx and lower interest costs [27][28] Spectrum Assets - Spectrum Utilization: Cogeco owns valuable C-band spectrum and plans to use it for MVNO access and potential monetization strategies, although current regulations limit certain actions [29][32][33] Capital Allocation Strategy - Leverage and Buyback Plans: The company aims to maintain a long-term leverage target of three times EBITDA and is considering reactivating buyback programs once leverage is reduced [34][35] Additional Insights - Customer Satisfaction: The focus on preventative maintenance and customer service improvements has led to increased customer satisfaction metrics [22] - Future Discussions: Internal discussions regarding long-term capital allocation strategies and leverage targets are ongoing, influenced by economic conditions [35]