Good day, and welcome to Cogeco Inc. and Cogeco Communications Inc. Q4 2022 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Patrice Ouimet, Senior Vice President and Chief Financial Officer of Cogeco Inc. and Cogeco Communications Inc. Please go ahead, Mr. Ouimet. Thank you. Good morning, everybody, and welcome to this quarterly conference call which Philippe Jetté and I will present as usual. Before we begin this call, I'd like to remind listeners that the call is subject to forward-looking statements, which can be found in the press releases issued yesterday. I'll turn the call over to Philippe. Merci, Patrice, and good morning. Welcome to this discussion of the fourth quarter results for Cogeco Communications and Cogeco Inc. We're glad you could join us as we present both our fourth quarter and the 2022 fiscal year results. We're happy to report that we met the targets we set out in our financial guidelines for fiscal 2022. In the fourth quarter, Cogeco's overall performance was in line with our expectations. Performance in our US operations was as expected, except for the PSUs, and we will talk more about this later. In Canada, our broadband operations perform as expected, even as things got more challenging in our business environment and the economy in general. The radio market, for one, remains soft, but our stations continue to rank at the top of the ratings, and 98.5 is again the most listened to station in Canada. All those results put us in a good position to start 2023, a year that promises more geopolitical and economic instability. What did we do in 2022? On organic growth, excluding the impact of acquisitions, we increased by 2% our internet service customers in both the US and Canada, which helped drive organic revenue growth. We pursued our broadband network expansion projects in both countries, where we added in fiscal 2022 a total of about 70,000 homes passed. This represents an increase of 4% in the US and 2% in Canada. These network expansions are anticipated to begin contributing to growth in our internet customer base in fiscal 2023, with benefits to EBITDA and free cash flow flowing through in fiscal 2024 and beyond. We also continued to make progress on our move into mobile markets in Canada. The CRTC has finally released its terms and conditions for the MVNO regulatory framework, and we are glad that the CRTC has denied many unreasonable terms and conditions that would have otherwise rendered the MVNO regulatory regime totally ineffective. However, the CRTC has introduced a new eligibility requirement, which is to be already commercially offering a mobile service, and Cogeco has, over the past two years, started developing its mobile wireless network capabilities. However, this new requirement will need to be carefully factored into our planning. We also have strengthened our Cogeco brands. Rebranding Atlantic Broadband as Breezeline in the US reflects the fact that we're no longer just on the Atlantic seaboard, the breadth of our product offering, and our commitment to convenient customer service. In Canada, our branding effort positions us as the local brand champion, reflecting the proximity and trust with our customers. We also further enhanced our products for our customers. We increased internet speeds once more, invested in digital tools, enabling more personalized services and improve operational efficiencies, and we launched Breezeline Stream TV, a modern IPTV service. In the U.S., we completed the acquisition of broadband assets in Cleveland and Columbus, and we are well advanced with the various integration steps there. The transition of the Ohio customer base onto Breezeline's customer management and billing platform was more challenging than expected, which unfortunately has led to higher customer disconnections than planned. For the transition, we had a higher than usual call volumes, which have been significantly reduced since then. Short-term service-related issues are now restored. All of this occurred in a high-inflation environment, which has some customers reviewing their discretionary spending, and while telecommunications providers are becoming more competitive in general across the United States. We are now focusing our marketing efforts to enhance service and product offering in that market, which has a strong growth potential. During the first quarter of this year, we should still see some customer reductions in Ohio, which we expect to stabilize afterwards. You already know Cogeco takes its ESG commitment seriously, and during the year we were gratified to have our efforts recognized by leading voice in ESG practices and reporting. More recently, Imagine Canada awarded Cogeco its Caring Company Certification for outstanding leadership and community investment and social responsibility in Canada again this year. Cogeco will remain committed to its environmental, social, and governance agenda. As we work to keep growing our business in the years to come, it is also important to note that this year we increased dividends and continued share buybacks. Now, let me share with you our priorities for fiscal 2023. As I said, Cogeco intends to stay focused on growing its business. At Breezeline, we will pursue our fiber to the home edge outs into areas where growth potential looks attractive. The plan is to increase homes passed by about 5% over the year. As we aim to achieve our targeted penetration rate of 36% over the next few years in our U.S. network expansions, we believe this will be an important growth driver for our business. This expansion excludes potential further edge outs of our network into future years under the Broadband Equity, Access, and Deployment program, BEAD, that will provide $43 billion in grants for high-speed internet access. We also expect to complete the integration of the Ohio broadband assets by further interconnecting this network with the Breezeline network and launching our IPTV platform in that market by the end of this calendar year. Turning to Canada, Cogeco Connexion will pursue market expansion opportunities through its FTTH program in underserved and unserved regions of Quebec and Ontario. We expect that to increase homes passed by approximately 3% by fiscal year-end, or 5% including fiscal 2022. Within these areas, we are targeting a customer penetration rate of 50% over the next few years, and similar to the U.S., this will also be an important growth driver for our business. For mobile, we are determined to launch a service in Canada if we can meet our financial return objectives. At Cogeco Media, we continue to build on our strong network of radio stations and expand our multi-platform audio content options. We'll also stay focused on the execution of our ESG strategy, including some key initiatives aimed at reducing our emissions to achieve our goals, maintaining our push for workforce diversity and inclusion, and pursuing our digital inclusion efforts. Now Patrice will discuss our financial results. Thank you, Philippe. During the fourth quarter, revenue at Cogeco Communications was up 12.7% and adjusted EBITDA up 17.7% in constant currency when compared to the same quarter last year, which reflects the impact of the Ohio broadband systems acquisition and organic growth. Capital intensity reached 30.8% compared to 27.7% last year due to increased activity related to network expansions in both countries. Excluding network expansion projects, capital intensity was 22.3% in the quarter. Free cash flow decreased by 49.2% to CAD 36.3 million in constant currency due to higher capital expenditures related to the network expansion investments, higher interest costs, higher restructuring costs, and current income taxes as well. Excluding network expansions, free cash flow during the quarter would've been CAD 96.1 million. In total, we have invested CAD 156 million in network expansions in fiscal 2022. In fiscal 2023, we do expect to invest a further CAD 180 million-CAD 230 million in network expansion projects. We target unlevered returns in the mid-teens for such projects, and this can be an important contributor to our EBITDA in the medium term. We therefore have the financial flexibility to drive shareholder value in a combination of ways, including growth in our operations and additional network expansion projects, notably under government-subsidized programs. We have accretive acquisitions, mobility services, as Philippe mentioned, in a capital efficient manner, and returning capital to shareholders. On that topic, Cogeco Communications continued to be active in its share buyback program at a faster pace than the first 3 quarters of the year due to the low stock price value. With the repurchase of 391,000 shares in the quarter for CAD 35 million. Under the current environment, we do expect to continue to actively buy back our stock in the coming quarters. We announced an increase of 10% in the quarterly dividend from CAD 0.705 to CAD 0.776 per share. In line with the rate of increases of the past years, and which reflects our confidence in the growth of free cash flow in future years. On future network expansions, we don't have sufficient clarity right now in the US on how the government subsidized broadband expansion projects will end up, and that's under the $43 billion BEAD program. It is still early to discuss this as we will have to see how the program is extended. Although we are very interested in participating. Now let's look at the performance at the end of the individual segments. In the United States, Breezeline's revenue and EBITDA in constant currency increased by 27.6% and 30.7% respectively in the fourth quarter. Mainly as a result of the Ohio broadband systems acquisition. On an organic basis, revenue and constant currency increased by 4.9%, mainly driven by a 2% increase in our internet service customer base and a higher value product mix. EBITDA, excluding the Ohio acquisition in constant currency, increased organically by 11.6% in the quarter. As for internet service customers and overall PSUs, we had an elevated number of disconnections amounting to 14,700 internet customers during the transition of Ohio, and as Philippe mentioned earlier. However, excluding those net losses in Ohio, we added 4,700 internet customers in the rest of the footprint in the fourth quarter. This is due to our Internet-first strategy and ongoing interest for wireline high-speed offerings, despite a generally slow environment. The product mix has also improved, with a greater proportion of new connections taking faster speed internet, resulting in a higher average revenue per unit. The larger loss in video and phone customers in the fourth quarter relative to last year is mainly due to losses in the Ohio system and our internet-led strategy. Turning to our Canadian operations, Cogeco Connexion revenue increased by 1.1% in constant currency relative to the same quarter last year, mainly due to a higher revenue per customer and growth in the commercial sector. EBITDA increased by 6.7% in constant currency, mainly from lower marketing expenses and some year-end adjustments. The internet customer statistics are now presented excluding wholesale customers in line with the presentation adopted by industry peers. Internet customer additions, which stood at approximately 3,200 additions in the fourth quarter, were lower compared to a very strong quarter last year in the context of the pandemic. However, similar to the US, the Canadian business is also improving ARPU for the internet product by having an improved customer product mix. The video and phone customer losses reflect higher cord-cutting for some customers who are more impacted by the current high inflation environment. Now let's discuss Cogeco Inc. In the fourth quarter, consolidated revenue increased by 12.1%, and EBITDA increased by 16.9% in constant currency. Revenue related to the radio operations slightly decreased as the advertising market remained soft. As for shareholder distributions, Cogeco acquired during the fourth quarter 32,000 shares for CAD 2.2 million, and we announced an increase of 17% in the quarterly dividend from CAD 0.625 per share to CAD 0.73 per share. Moving on to the fiscal 2023 financial guidelines. Both corporations have maintained their guidelines as issued in July. Although the general economic prospects for fiscal 2023 have deteriorated since then, we have initiated measures to offset potential impacts on revenue and EBITDA. As the year unfolds, we will continue to assess market conditions and the impact they have on operations. At Breezeline, we expect low double-digit revenue growth and low to mid-single digit EBITDA growth, reflecting a higher value product mix, growth in the commercial sector, and to a lesser extent, new customers coming from the network expansions we have undertook. We expect quarterly results at Breezeline to improve sequentially during the year. This is different from what happened in fiscal 2022 when we had lower marketing costs and less staff in our Ohio assets last year as the assets were still operated under the previous owner's brand for a portion of the year. For this reason, we expect the first quarter EBITDA results this year to be lower than last year, which is normal because last year was an exceptionally high EBITDA number. Excluding Ohio, internet net additions are expected to be soft in the first quarter and then grow stronger throughout the year from our traditional operations as well as from the network expansion projects. In Ohio, even though the customer and billing systems transition is behind us. We still expect a certain number of disconnections in the first quarter, but not to the same extent as in the fourth quarter of fiscal 2022. As for Canadian operations, Cogeco Connexion still expects low single-digit growth in both revenue and EBITDA, reflecting stability in our traditional operations and growth in newly built expansions in Quebec and Ontario. Cogeco Connexion EBITDA growth in the first half of the year should be higher than the second half, mostly driven by a rate increase implemented in September this year versus several increases on different services throughout the year of last year. I'll turn the call over to Philippe for concluding remarks. Thank you, Patrice. All in all, as you heard, 2023 looks promising, even if the business climate will be challenging. In 2022, Cogeco celebrated the 65th anniversary of its founding. Over the years, it's been an impressive growth story that we can be proud of. I would say that at 65 years young, Cogeco is still in the dynamic prime time of its life, and there is still more to come for our communities, our customers, our colleagues, and our shareholders. At this point, Patrice and I will be happy to answer your questions. Thank you. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will hear a 3-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by two. If using a speakerphone, you will need to lift the handset before pressing any keys. Please go ahead and press star one now if you have a question. Your first question will be from Drew McReynolds at RBC. Please go ahead. Yeah, thanks very much. Good morning. A couple for me here. Just on the wireless side, thanks for the update and obviously with the new eligibility requirement, presumably requires you to launch before, I guess, benefiting or getting into the framework. Philippe, are you able just to give us a sense of what that looks like at the moment, and if you're still working through it, when do you think we'll get an update in terms of, you know, what that kinda capital requirement looks like and what that kind of startup roadmap looks like? Yes. Thank you, Drew. We've said it many times over and over, we are looking for a capital light model. Now, the definition, it's unfortunate that the CRTC had to insert a new eligibility factor in the mix. We are going to understand exactly what they mean by being operating somewhere in Canada. It's kind of a loose definition, but I'm expecting pretty soon we will have more clarity on what they meant there. Obviously, other players are already in operations. For our case, we've been working on this plan for the last two years. We need a visibility, understanding, and clear understanding of every parameter of this business case before launching, and we're gonna be working with the CRTC and as well as the governments with ISED to clarify that very soon. Okay. Okay, great. Thank you for that. Just two others for me. I think first from the economic headwinds that you point to, obviously others are pointing to it as well. You got a very interesting lens into any differences in economic headwinds between Canada and the US if there are any. Could you give us a sense of any differentiation between the two markets on that front from your perspective at least? Yeah. I would also add to your question that as a regional operator, we have a different perspective because most of our operations are not influenced by what's happening in dense urban center, which is another dynamic. Where we operate, competition I would say is reasonable, more predictable. All the set of headwinds that are coming to the consumer market in terms of wage pressure, interest rising and inflation, they're simply causing consumers to revisit their discretionary spending at this time. In the end, I think we're well-positioned with the best customer service and the best products. You need to connect to the Internet for entertainment, but also for work, for most of our consumers in our region. I feel that we're going to weather the storm, we're gonna go through, and customer will still enjoy the good products that we have. Maybe they will temporarily reduce or drop a PSU, but they will come back after the storm. Okay, thanks. Just a follow-up there. Are you seeing any major differences between the US and Canada within your respective footprints in terms of those economic headwinds, or is it just thematically all generally the same? Generally speaking, it's aligned. It's the same. One last one for me. Good to see the positive internet net adds outside of Ohio, and I think you've been certainly flagging the dynamic in Ohio and integration for a quarter or two. Just big picture question. Relative to your initial assumptions when you made the acquisition in this market where there's obviously three players. The competitive dynamics in that market, not including everything you're dealing with the migration and integration, but just the underlying dynamic, how is it comparing to your initial expectations when you looked at this asset? I think it's pretty much in line with how we've modeled this acquisition. Of course, competitors had some time to prepare themselves and to welcome us in the two cities of Cleveland and Columbus. There was a little bit more intensity for some areas where, for example, AT&T converted some DSL neighborhoods to fiber. The general intensity did not increase that much. If we would have been a little bit luckier with some outages and more careful with some of the steps in our transition, we would have lost less PSUs for sure. Okay. Got it. Okay. Thank you very much. Thank you. Next question will be from Maher Yaghi at Scotiabank. Please go ahead. Yes. Thank you for taking my questions, guys. Maybe I just want to follow up on the discussion of broadband connections in the U.S. and definitely it's top of mind for investors and looking at cable companies in the U.S. having to deal with more competition. I wanted to ask you about your reference that in Q1, you expect internet net adds in the U.S. outside of the Ohio area to see some weakness. Can you explain what is driving that comment and how long you think it will take before we can reestablish growth in your broadband connections outside of Ohio? And in terms of Ohio, you mentioned that you do expect an improvement, sequential improvement in the losses, but any comment as to when we will turn into growth in Ohio? Great morning, Maher. Outside of Ohio, as you pointed out during Q4, we did have growth, actually. We are expecting Q1 to be softer, partially due to seasonal disconnections. They will vary by state and by quarter, obviously. We're now operating in 12 states and soon in 13 through our expansion. It's mainly due to this. The market is also, I would say, slower at the moment. At the same time, we always have to decide if we're gonna go after all the PSUs. For entry-level packages, if sometimes competition is more aggressive on pricing and discounts, we always have a choice to go for it or not. These are the choices we make on a quarterly basis. We try to balance the financials and deliver on our guidance first before delivering you know salvage of the PSUs. We do expect that past Q1, though, we'll have strength. Obviously, this will evolve throughout the year, but we do expect more strength. A portion will come also from the network expansions we've done in the U.S. But you'll remember that these are. We're expecting to ramp up over time, a bit slower than what we're expecting in Canada because they're not subsidized networks in the areas where there's no high-speed internet. For Ohio, what happened is, during the transition, we were more flexible with some customers in the payment terms. Partially because there is a technical aspect to it, where sometimes when you change the name of the company, the platform, sometimes actually the invoices will not get paid through the credit card or the banking information. We still have some customers to go through in the quarter. Afterwards, we do expect stability. That's our plan. From there, planning to grow. Last thing I could add on this is, from the initial thesis on Ohio, obviously we did lose some customers we were not planning to lose, but we were mainly banking on growing ARPU over time. As we're densifying the network, we're gonna introduce an IPTV product, and this is coming. The IPTV actually is coming before the end of the year. We're gonna start to introduce it at this point to new customers. Okay. Okay, great. Thanks for that. In terms of the transition in Ohio, what% of your subscriber base is now under the new billing? How much of your network has switched to the new broadcasting telecommunication signal? i.e., are there any other, you know, additional reconnections that you need to do that could cause some issues with outages, et cetera? The whole base is now on. It's 100% now transferred to the new platform. What we have left to do is more in the background. We're investing in infrastructure as we had planned to do. We don't expect at this point more issues coming from it. When you make a change of systems, you change the invoice, you change the rate codes and the brand name as well. It's a lot of change for customers, and it gives them an opportunity to rethink their telecom spending and their providers. This is clearly behind us now 'cause 100% of the base has transited to our systems and name. Okay, great. I have a question on margins in Canada. If you may, help us understand how much more upside can we see in your Canadian cable service margins, given the strength we've seen in this quarter. What's driving that margin increase? Are there any one-time lower cost that is accounting for that 6% EBITDA growth in the quarter year-on-year? A portion is due to the organic growth year-over-year, which we were expecting. We did have some year-end adjustments. They're not very large, but when you focus on one business unit in one quarter, it adds up a little bit. If you look at the margins for CCX for the full year, we did 63.8%. You could assume that next year we'll be in a similar place. A bit lower than what we did in Q4, but very similar to what we did during fiscal 2022. From there, as we typically with the various activities that we have and also the network expansions we're doing now and as we're gonna load customers, I could see that in fiscal 2024 and on that this will expand as well. We'll wait a little bit to talk more about this as the year unfolds. Okay. Thank you, guys. Yep. Next question will be with from Vince Valentini at TD Securities. Please go ahead. Thanks very much. First, the hurricane in Florida. Can you just confirm, is there any impact on your Miami systems or were they far enough away to not really have any damage or disrupted customers? No. We were, I would say with the path of the hurricane, it actually did not hit our network, so we had very little impact from it. Thank you. Second, correct me if I'm wrong. I I think you said Breezeline EBITDA growth in the first quarter will be negative on a year-over-year basis. I assume you're talking on a constant currency basis when you say that. If we factor in FX now versus FX rates in Q1 last year, I assume there's the reported number would still be higher, or you're actually saying reported is down even with the FX change? No, you're right. It's in constant currency. Last year we had CAD 140 million of EBITDA in Q1, which was much higher than the other quarters. We do expect in current currency to be lower. I must say I have not converted it in FX. It's gonna be a lot closer if not the same number. I'm sorry, I haven't done the number, but it's in constant currency. Thank you. One more clarification, and then a bigger picture question. The rural expansions, I believe, I mean, you're getting new stuff in the U.S., you're getting new stuff in Ontario, but I believe you've already built out a fair number of new homes in Quebec. I think you said 2% expansion in your total homes. Should we start to see some internet sub adds from those new territories as early as the first quarter of 2023? Yes. We added in Canada 37,000 home spots. A lot of them were delivered in the past quarter and two quarters. Yes, we should start seeing because they were expanding in areas where there's no high-speed internet, typically, the subscriber loading is faster. We do expect a penetration rate over three years of 50%, but normally we do expect the first year to be a more important one than the other two. Yes, it's gonna be gradual. Now, we do have a number of home spots that we're gonna add throughout the year, so these will count as well. As we go throughout the year, we should see this number grow. Great. Last, I'm not sure if Drew tried to ask this before, but I just wanna ask more specifically. Is it even possible to buy a wireless core network from a vendor that's just like a mini core that only covers, you know, one town, as opposed to most people have core networks that cover entire countries? Can you get us a pared down version that you can buy from somebody? If so, any idea. I think investors are scrambling to figure out if there's some sort of massive CapEx to try to get a radio access network and a core network up in at least some small area to qualify for the MVNO rules. Can you give us any sense of if it's possible and how much CapEx we're talking about? Yeah. Well, I will repeat again that we're working on a capital light model. In terms of the RAN, yes, you can scale it from very small to very large. But you have other components than the RAN. You have the billing system, you have the customer relationship management. The new systems, as opposed to the ones that were rolled out 20 years ago or 10 years ago, you can scale them because they're cloud-based. You can pay per capacity as you scale up. I hope that directionally answer your question. Philippe, you can basically have an outsourced core and basically just buy it on a cloud-based basis from somebody who already has one, as opposed to actually have to invest in your own large physical core. Is that a fair way to interpret what you're saying? Well, these options exist right now, and that's why we've been working on our planning to see is the new technology ready enough to launch an operation or do we want a hybrid? All these things, we will disclose them later with our commercial when we're closer to a commercial launch. At this point in time, we have many options. Vince, just on this, though, we're not necessarily planning to change our guidance based on this in the future. It's not as if we'll come back next quarter. At least that's not the plan with a big change based on this. We did factor this into account when we reconfirmed our guidance for next year. Good. Thank you. I'll pass the line. Thank you. Next question will be from Stephanie Price at CIBC. Please go ahead. Hi. Good morning. Inflation was mentioned a few times in your prepared remarks. I'm hoping you can talk a bit about the impact of inflation in the quarter and how Cogeco is offsetting the impact. Yeah. Often when we talk about inflation, people think about their costs, so they are impacted. I would say overall, we're able to manage every year through the various procurement activities that we do, we're able to decrease costs. I would say we're able to manage this on our cost side. It's a bit more impactful on the consumer side because inflation, especially when you look at grocery prices, gas prices and now interest rates are impacting the personal budgets of customers. That's why we have seen actually more cord-cutting in the quarter. I think it's happening with other operators in the space as well, looking at the recent releases. This is something that's happening. A bit more cord-cutting on video and phone, not necessarily on HSI, but I would say this is where we see it. Okay, thank you. In terms of wireless, just curious if you had any updated thoughts on a wireless rollout in the U.S. Yes. Wireless in the U.S. is different, as the MVNO framework that we're talking about in Canada here. There's no such need in the U.S. The MVNO commercial environment exists already. It wasn't at the top of our priority. We had many other profitable initiatives we should be executing before going into wireless. It's on our list. It's possible. We don't need to purchase Spectrum to enter the MVNO arena in the United States, so we'll do it when and if it makes sense to help our business. In the very short term, it's not in our immediate plans. Okay, thanks. Just finally from me, just curious if there's any major differences that you're seeing in the competitive environment in Ohio versus the rest of the U.S.? Ohio being an overbuilder, we have a very similar footprint in Florida, where there's actually more competitive intensity. We've been operating in Florida for some time. We're not afraid of competition, and it's working rather well for us down there. We see certainly AT&T upgrading some DSL neighborhoods to fiber. Charter is already there. They're quite competitive, but I don't see any fundamental things changing going forward. We are going to continue to invest in our customer promise, our customer care, as well as network product. Maybe in addition to what was said earlier, there is more network investment coming, so we can keep on improving the speeds of internet, for example, and make our products better in Ohio, including the Breezeline Stream TV, IPTV product that is coming. Great. Thank you. Next question will be from Jérôme Dubreuil at Desjardins. Please go ahead. Thanks for taking my question. My first question is on the U.S. broadband. Thanks for the color you provided already there. Is it possible to share what percentage of your U.S. footprint is currently actively seeing overbuilding by some of your competitors? I know you already have some of your footprint overbuilt, and you also have the condo towers and gated communities, which are possibly not affected by this trend. Just overall, the proportion of your U.S. footprint that is facing active overbuilding right now. Yeah, I would say there's not necessarily active overbuilding at the moment. We're not seeing any new activities or any material new activities. We have obviously Ohio, which is competitive, Florida and some other states where there's been some overbuilding done about two years ago. Overall, when you look at our competition in the U.S., we're facing fiber in about 15% of the network, and about 55% is still DSL, and the balance is a mix of different products, including coax overbuilds. I would say those statistics have not changed recently except for the pro forma for Ohio. Okay, great. Second, a bit similar to Vince's question, but in terms of the FX impact, I mean, it's easy to calculate the impact on the top line. However, I wonder if you can help us a bit in terms of the margin. How does this behave when you're seeing maybe an FX tailwind of 7% or 8% in the coming quarters? Should we be expecting some sort of margin lift on that front? And if so, of what magnitude approximately? Thanks. Well, if you're talking about the U.S. only, because it's the top line and the costs are in US dollars, then it will not really impact the margin in percentage. If you look at it on a consolidated basis with a higher FX rate, it means that the U.S. business will be more significant. And because the margins are a bit lower in the U.S., it would reduce the consolidated margin to a certain extent, probably not any meaningful number. And the reason why our margins are lower in the U.S. is primarily due to the video content costs. The video packages that consumers have in the U.S. are much larger than what we sell in Canada and cost more as well. That's the main reason why the margins are different. I hope that answers your question. Great. Yeah, yeah. That's helpful. Thank you. Great. Once again, as a reminder, ladies and gentlemen, if you would like to ask a question, please press Star followed by one on your touchtone phone. Your next question will be from Matthew Griffiths at the Bank of America. Please go ahead. Oh, thank you for taking the question. I just wanted to touch on wireless again. Sorry. In the prepared remarks, Philippe, I think you mentioned that you've already started developing a mobile network. I mean, obviously you've been purchasing some spectrum. Was that all you're referring to there? Or, you know, besides that, what have you done? Maybe, you know, if there is anything beyond spectrum, like how much have you spent on that? Preparing such an operation requires, of course, skill and talent inside our business. We do have a team that is dedicated to wireless with a strong wireless expertise. By the way, the whole senior leadership team at Cogeco is versed in mobile, as we all have mobility somewhere on our CVs. We are looking for an operation over our existing wireline footprint. That's about a coverage of 4 million Canadians. It's a small scale operations compared to the major MNOs that are covering coast-to-coast countries. It requires a lot of skill to balance the quality with a light expenditure using of. The usage of new technology and also planning how we will work in this MVNO framework with MNOs that are really looking for every opportunity to delay things and make interconnections difficult, if I could simplify it with just such a statement. We've been working on this for two years. There was more of a regulatory hurdle. Now with the Ts and Cs, the terms and conditions, we have more clarity. The next step will be to get going on negotiating the rates with the MNO, and then we will have all the variables to decide if we can launch a profitable business or not. Okay. It's mostly on. You're referring to, like, the kind of intellectual investment rather than already being underway on some sort of physical investment. Is that a good way to sum it up? Well, of course, we have labs, and we're playing with the real stuff as well, so it's not just conceptual. We are testing many, many things. Okay. Thanks for that. And just another clarification. In the 2023 priorities that you laid out, you mentioned in the US, homes passed growth of 5% and in Canada of 3%. I just wanted to, you know, double check that you're basically referring to, like, an incremental 1% in the US and an incremental 1% in homes passed year over year. Do I have that right? Or is it actually in 2023, a new 5% increase from 2022 in the number of homes passed? Yeah, it's the latter. Actually, no, we're planning to add another 5% in the US. Okay. Another 3% in Canada. Yeah. Okay, good. Thank you for that. Then just, you know, in the U.S. and Canada also, but I think particularly in the U.S., where I think everyone has been noting the increase in competition just generally, it affects some markets more than others, obviously, you pointed that out. You know, can you talk a little bit about, you know, your intentions around marketing spend and what if you think that, I think you mentioned already in Q4, it was elevated. Going into the next year, is this something we should assume is gonna have to stay elevated given that net adds generally in the U.S. seem to be quite low, and so the competition for each one of them has to be much more intense? Just kind of related to that, you know, if you could also talk about your confidence since, you know, PSU growth outside of the new territories might be a little limited, what kind of confidence do you have in your ability to pass on or pass through price increases in each of the markets? Thanks. Okay. On the marketing costs, they do vary by quarter, obviously, and by year as well, especially when we just came out of a COVID period. The pattern of expenses was different than what we would normally do. I would say we're closer to what we normally do now. Difficult to get more granular, necessarily on this. On your second question, we are really pro-consumers all the time. We pass on what we must pass on. We have even noticed in the last several years, our price increase are not set at, a given date every year. We try to stretch it the longest possible. We were under the very big numbers you've seen for inflation rates. We try to control a lot of cost on our side and really pass to the consumer markets, which we need to. In the end, it is working well. We are maintaining good customer relationships, so the experience is something that is really important to us. Good products, good customer service, but also good price. Okay. Maybe if I could just squeeze in maybe one last one to get your thoughts on. You mentioned since the initial guidance was given, conditions have deteriorated. I was just wondering, and this is a hard thing to speak to because you don't lay out exactly all of the assumptions that go into the guidance, but is there a way to frame, kind of, the magnitude of how things have shifted since the initial guidance was given? You, in this, you know, you also mentioned you're working to counter those. You know, if there's anything you could highlight initiatives that you're working on to, you know, counteract some of that deterioration, that would be helpful. Thanks. Sure. In our guidance, we do provide a range, but when you look at the range as a percentage of the overall business, it's not very large. I would not say that things have changed dramatically since then. The more impact from the current environment and also the losses of some customers we've had in Ohio have an impact on revenue. I would say that's the line that bears more of the impact of these changes. On the cost side, we have a number of things that we are doing. For example, we did have some restructuring during the quarter that will provide some financial benefits in fiscal 2023. That was just done recently. We have a number of other elements we're working on to alleviate potential weakness in some level of revenue. Again, we did maintain the guidance with a range that is not very large in the first place. All right. Thanks a lot. That's very helpful. It's a whole set of pluses and minuses. For example, yes, the inflation is not even every month. We've seen it going up, and then coming down for some products. We can think of people coming back with teleworking because the commute is really long and expensive. It's benefiting internet connection services. There are pluses and minuses in that. That's why we continue to see some challenges, but we'll be able to weather the storms. Thanks very much for taking the questions. Thank you. At this time, gentlemen, we have no further questions. Please proceed with your closing remarks. Okay. Well, thank you, everybody. We're gonna be meeting back in January, in mid-January for the first quarter results. In the interim, we're very happy to take questions. Have a good day. Thank you. Thank you, sir. Bye now. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have a good weekend.