Shaw Communications Inc
TSX:SJR.B
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Shaw Communications Inc
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Welcome to Shaw Communications First Quarter Fiscal 2019 Conference Call and Webcast. Today's call will be hosted by Mr. Brad Shaw, CEO of Shaw Communications. [Operator Instructions] The conference is being recorded. [Operator Instructions] Before we begin, management would like me to remind listeners that comments made during today's call will include forward-looking information, and there are risks that actual results could differ materially. Please refer to the company's publicly filed documents for more details on assumptions and risks. Mr. Shaw, I will now turn the call over to you.
Thank you, operator. Good morning, and happy New Year to everyone. With me today are members of our senior management team, including Jay, Trevor and Paul.This morning, we released our first quarter operating and financial results for fiscal 2019, and we are pleased with the performance of all our divisions. The results reflect the team's collective effort and commitment to stabilizing our wireline business and capitalizing on the growth opportunities within our Wireless operations.As we discussed last quarter, our entire organization is focused on improving execution and delivering our F '19 operating plans while making appropriate strategic investments that will yield significant benefits for all of our stakeholders going forward. Our Wireless division continues to thrive as we added over 86,000 postpaid customers in the quarter and delivered significant revenue and EBITDA growth. The success we are achieving in postpaid customer growth is a direct result of our strategy to enhance the network experience and reposition Freedom Mobile as a strong and differentiated competitor in the Canadian wireless landscape. Our efforts and focus over the quarter were aligned with our strategy as we continued to move upmarket in that higher value customers. Since our entry into wireless, we have invested capital and resources to improve both the reality and perception that Freedom's network was inferior. Today we disclosed postpaid churn results that importantly show what our customers think of the Freedom exercise -- Freedom experience, oops, sorry, about that. Postpaid churn of 1.28% improved significantly by 36 basis points over the last year. We have deployed spectrum, introduced innovative data-centric plans, expanded our handset lineup with the latest and most popular devices and significantly added to our retail distribution. These investments are all supportive of an improved customer experience, leading to better churn and average billing per user growth, which is up 12% in the quarter.In readiness for Black Friday and the critical holiday selling season, we launched our innovative Big Binge Bonus program in late October, which provided new Freedom customers up to an additional 100 Gb of data to use at their discretion. This strategy helped Freedom continue to attract high-value postpaid customers. Overall, our sales activity remained strong throughout the holidays, however, I would characterize that the overall wireless environment as being less active than a year ago.From a network perspective, our priority continues to be the role of the 700 megahertz spectrum, which includes our initial launch in all of our major markets in Q1. As at the end of November, the 700 rollout was approximately 25% complete, and we will continue to deploy this spectrum across our footprint over F '19. We have also made VoLTE available to approximately 35 different devices, representing over 800,000 phones on our Freedom network. Considering the recent events and securities concerns around Huawei, we want to confirm that our wireless network does not contain any Huawei equipment. We have partnered with Nokia on our wireless technology supplier, and we'll continue to build and expand our network to be compatible with future technologies, such as 5G.We are pleased to report that we launched the remaining national retail stores in all 140 Walmart locations. Combined with our corporate and dealer network, we now have over 600 locations selling Freedom services. We will continue to expand our corporate and dealer store footprint throughout fiscal 2019 as we launch in new Western markets, including Victoria and Red Deer, which are expected to be operational next month.In our wireline business, we have made some important steps in the right direction as we added Internet subscribers this quarter, double the speeds of our top Internet tiers and stabilized revenue through a renewed approach to base management, which includes a balanced and digital focus on acquisition and retention. We delivered a 46% wireline margin in the quarter, up significantly from Q1 last year as we focused on optimizing our consumer business, including deploying resources that are aligned with our profitability focus, removing cost where possible and leveraging our network and strategic partnership advantages. Our recent speed increases implemented in December, which included taking Internet 150 and 300 customers to Internet 300 and 600, respectively, impacted approximately half of our Internet base. These customers received an improved Internet experience, showcasing the strength of our network, which supports long-term pricing power of our broadband service. While we're still early days regarding our journey towards a modern Shaw, I am encouraged by the progress we have made as we improve upon the fundamentals of our business and focus on delivering an exciting broadband road map in fiscal 2019 that includes anchoring the home with the XB6 modems, introducing a superior managed WiFi experience with xFi and home extenders, followed by the availability of IPTV, including cloud DVR, for our customers later in the year.Now I'll turn it over to Trevor to go through the Q1 results in a bit more detail.
Thank you, Brad, and good morning, everyone. Fiscal '19 is off to a great start with positive financial contributions from all business divisions. And before getting into the numbers, I do want to confirm that all reported and comparative figures reflect the accounting policy changes related to IFRS 15, which of course primarily impacts our Wireless division.On a consolidation basis, revenue grew 8.8% to $1.36 billion, and EBITDA increased 13.5% to $545 million compared to the prior year. From a divisional perspective and on Wireless, supported by strong subscriber growth over the last year, including our first quarter additions, consolidated Wireless revenue increased 60% year-over-year to $273 million. This includes service revenue growth of over 30% in Q1, which was driven by ARPU growth of 12% to almost $42. Wireless EBITDA grew over 36% to $45 million this quarter. As a reminder, the change in accounting under IFRS 15 is primarily related to our treatment of Wireless subsidies. In the past, we would amortize the subsidy over the life of the contract against equipment revenue only. We now allocate the subsidy proportionately between equipment revenue, which is expensed in the period, and service revenue, which is amortized over the contract period. The net result in the near term is a decrease in revenue and EBITDA, although EBITDA to a lesser extent as we now amortize commissions over the contract period compared to pre-IFRS accounting where we expensed them on day 1. While accounting changes created some noise in the results and from a comparative perspective, it's important to remind investors there's no actual change in overall revenue or cash flow from the customer. You can see from our disclosure that the impact of IFRS on Q1 F '18 results was immaterial, reducing Wireless revenue by $4 million and EBITDA by approximately $1 million. As you would expect, the impact is more meaningful through Q2 and Q3, when last year, we significantly increased device sales and corresponding subsidies related to customer growth. As disclosed in our annual report, the full year impact in F '18 due to the accounting policy change was a reduction of approximately $50 million in wireless revenue and approximately $30 million in wireless EBITDA.In wireline, Q1 consumer revenue was essentially flat at $936 million compared to the prior year, while business revenue increased 5%. Wireline EBITDA growth of 12% to $500 million, includes approximately $25 million in VDP-related cost reductions. First quarter wireline margin of 46% represents a 460 basis points improvement compared to a year ago and includes savings related to VDP, lower marketing expenses and our overall focus on profitability. In the quarter, we did incur a retroactive cost of approximately $7 million related to higher rates than expected from the Copyright Board of Canada for retransmission tariffs covering the 2014 to '18 period. However, we also have a number of smaller favorable onetime adjustments and provision releases that essentially offset this retroactive tariff charge this quarter. In the quarter, our reinvestments to enable VDP were slightly behind our internal plan with more spend shifting into Q2 and throughout F '19. However, overall, we remain on track to deliver $140 million of VDP combined net operating and capital savings this year. Capital spending of $271 million in the quarter was largely on plan with reductions in wireline expenditures, our network infrastructure and customer prem equipment. Wireless investments in the quarter include deployment of the 700 spectrum, which will continue to ramp over the coming quarters. Our Q4 F '18 spend included delivery of wireless equipment, whereby, there is a timing difference between delivery and deployment and, therefore, Q1 F '19 wireless capital was below Street expectations. However, in aggregate, we continue to expect F '19 Wireless investments to be approximately $400 million. With Q1 behind us, we remain on track with respect to our F '19 guidance of consolidated EBITDA growth of 4% to 6%, capital investments of approximately $1.2 billion and free cash flow in excess of $500 million. Before turning the call back to Brad for closing remarks, I wanted to briefly discuss our recent capital markets activity. Our balance sheet continues to be strong with leverage remaining at approximately 2x. And in November, we accessed the debt capital markets and were successful in raising $1 billion in senior notes at attractive rates and tenors. Considering market volatility, we viewed this as a prudent proactive approach regarding our $1.25 billion maturity that is due in October 2019. Brad, back to you.
Thank you, Trevor. I'm pleased with our quarter -- first quarter results and the progress that we have made. Our focus in fiscal 2019 is on execution, while we managed through a significant period of change. During the year, we're making investments required to enable VDP exits and transition to a digital-first organization. We will launch new IP products that focus on growing our broadband business, and we will continue with our network and retail expansion, supporting further Wireless growth. I'm confident in our ability to deliver on all these key strategic initiatives and look forward to providing updates throughout the year. Thank you. And we'll now turn it back to the operator for questions.
[Operator Instructions] Our first question comes from Drew McReynolds of RBC Capital Markets.
Just want to hone in here on wireline, maybe for you, Jay. Obviously, very good margin expansion in the quarter. I think in the past, you alluded to seeing more of kind of that margin improvement in the back half of '19. So just wondering if you could kind of provide an update on what kind of investment in automation you made in the quarter as well as perhaps how programming costs are expected to trend for the rest of the fiscal year?
Great. Thanks, Drew. Well -- it is Jay. I'll start with that, and Trevor can fill in on some of the timing of the second half investment. I mean, we're very happy with the first quarter in terms of wireline. We -- the team was all in its new roles and largely aligned as we went through the summer, so we brought our -- this was the first quarter of our transformed organization, and we liked the results that we got. We see opportunities for improvement and continue to want to grow broadband and to grow revenue through our focus on transformation. I think on the investment side, to your comment, our net investments, where we achieved our gross savings in terms of investments, we didn't really reinvest that much in Q1, and the timing of our net investments in the second half. Trevor, do you want to...
Yes. Drew, I think, it's true and maybe there was some confusion about absolute EBITDA growth versus growth rates. Clearly, there were very strong growth rates this quarter, but just caution going forward. We're lapping some pretty strong quarters in the second half of '18. In terms of reinvestments, there wasn't as much as planned this year. We certainly are -- still being cautious about VDP and just managing through the exits. We -- there was about 200 folks that exited the business this year. There's another 900 to go in F '19 with majority of that back half weighted in the second half. Roughly 700 of those 900 will come out, we're leaving them. Majority of those folks that are leaving later in the year are certainly more on the operational, technical -- technician staff, so that's more CapEx related. But some of the investments related to automation of processes, self-install, field force optimization and some of the digital initiatives that we're tackling, we're -- we are sort of being very dynamic as the leadership team and looking at these on a weekly, monthly basis. We expect those to come, but it'll come later in '19 than originally planned.
Okay, that's great. And one final one. Also on wireline, we saw a bunch of pricing, packaging, speed changes to what you're offering out there in the market. I know you talked about in your opening remarks but maybe if you could provide little bit of the impact that you've seen on RGUs or whatever traction you've got as a result? Just any color there would be helpful.
Yes. Drew, it's Jay here, and I think you've alluded to we made a couple changes. We made a Internet speed change right at the end of the quarter, which really had no impact on Q1. It was literally in the last 2 days and will impact Q2. Basically, we really wanted to reinforce our position in fiber to the home and fiber to the node as we lead in to our broadband strategy, giving us what we believe we can market as absolute parity in the fiber to the home areas and 4x faster than fiber to the node. It affected almost half of our Internet customers a little less than half about -- approximately 900,000 residential Internet customers, and response has been extremely positive on the double down, both in terms of the reaction from our base and increased activity into our inbound digital and call center channels. In the following week, we also made our planned moves on video, which is really, as we've talked to the markets about in the past, we're really focused on managing video for profitability, eliminating the reprice for us and improving cost predictability for videos. So the focus is on $60, $80, $95 plans. And again, we were pleased with the early response for December. So that's kind of an exciting time for our wireline team, very much the first chapter of the book, but it's great to see the business responding as we planned for it to respond.
Our next question comes from Vince Valentini of TD Securities.
Let's stay with that wireline pricing theme for a sec, Jay. I assume you've seen some notices going out by Telus for rate increases in Internet primarily and a little bit of video for the end of February. Any thoughts about that? Does that strike you as a nice reaction to what you've been doing the past couple of months? And can you give us any update on what your rate increase upgrade cycle might be this year?
Yes. Thanks, Vince. I think we continue to have a nice competitive pricing for every -- pricing for the business and then decent price discipline in the marketplace. In terms of rate increases, you'll recall, we did a -- what we used to call the cable segment, the consumer broadband segment we call it now, did a rate increase last spring, and probably you'll see something along that regard this coming up spring. Because we don't rate increase within a value plan, it's only a portion of the base that gets rate increase, and I think Telus is making similar moves. As we did last year, we did our consumer satellite rate increase last year in the winter, and we did this December 1 as well. It went well. On average, it's a $3.40 increase effective December 1, and it'll probably contribute about $20 million in F '19 revenue. So that's where we're headed on pricing. I think what you've seen is all of our pricing is focused on broadband. If we need video to get a broadband customer, we're going to add video absolutely in a profitable way, and it’s an important part of our business. But we're pleased with where both we are in the market as right now from a pricing perspective.
Great. Two other ones if I can throw out, one for Paul, one for Trevor. Paul first maybe. The churn improvement year-over-year is obviously pretty substantial. At 1.28%, you're almost down to the level where some of the incumbents are, but Telus is below 1% consistently. T-Mobile in the States is below 1%. Do you think 1.28% is sort of as good as it gets? Or you expect continued gains from this level in future quarters? And then for Trevor, just you can think about it while Paul's answering that, is -- I mean, 15.5% is not just slightly above your guidance. I understand the timing on some of these [indiscernible], but is it fair to say 13.5% is trending towards the higher end of that 4% to 6% guidance range for the year on EBITDA? Or do you still think that the midpoint of that range is most realistic?
Vince, Paul. Thank you. Yes, we're obviously thrilled with the performance of the team, the infrastructure, all of our customer contact points that got that 1.28% figure in place for us over the last 90 days. I would expect to see some volatility, simply, mainly 2 reasons. We've got a smaller base, so it's a little bit easier to affect that with small movements, and we've got a higher percentage of BYOD on our rolls than the incumbents do. So I'd expect to see a little bit of movement, but I'd categorize that range as something we look to aspire to for the rest of the year. And I'd like a kind of 30-year head start to get to sub-1%. I don't think you're going to see that any time soon given the composition of our base. But these are really significant improvements we've seen. And it's full credit to the network and engineering teams that have so drastically improved the network experience over the course of last year. You'll continue to see our churn level be in that range, I think, over the next couple quarters.
And yes, Vince, I would say, based on the delivery of the Q1 results and where we sit, that yes, we are trending towards the high end of the guidance range.
Our next question comes from Jeff Fan of Scotiabank.
Few questions. First let's just clarify with Trevor. With respect to the IFRS, there seems to be some confusion on that, so I just want to clarify that. In this quarter, there were some margin decline, I guess, on a year-over-year basis. But that seems like from your explanation is just due to the fact that you didn't have a lot of subsidies in your base in Q1 last year. So as we look out the rest of the year, should we start to see margin improvement on the Wireless side as you start to lap, I guess, the iPhone handset and the subsidy model that started late last year? And then, again, the $30 million adjustment in 2018, only $1 million in Q1. How does that roughly split out for the rest of the year from Q2 to Q4? And where do you think the number ends up roughly in 2019?
Sure. A lot there, Jeff, and I understand there is some confusion with the policy changes on IFRS 15 that makes it difficult to do comparatives. So on the margin question, you're absolutely right. There wasn't as much sub loading in Q1 of last year, so that's why there was a stronger margin than this year. I would say, where we're looking at sort of trending through the balance of the year is somewhere in that 16% to 20% with the sub volume that we're expecting. However, that trend changed significantly based on higher sub volume and more subsidy upfront on the equipment side of things. As far as this split on the $50 million and the $30 million, you're absolutely right. Again, Q1, there wasn't as much activity. Really this, I would say, roughly half of the $50 million impact on revenue and half of the $30 million impact on EBITDA occurred in Q2 when we really started to ramp up the volume and the device sales and the subsidy related to the activity a year ago. So hopefully that helps from a modeling perspective that you can do your adjustments on IFRS 15 for '18 on a quarterly basis based on Q1 disclosure we gave today and the Q2 is roughly half and then Q3 and Q4 is about the remainder split evenly over both of those quarters.
Okay, great. Question for Paul on the Wireless side. If we look at your postpaid adds for this quarter, the last 12 months, you're adding almost close to 320,000 subscribers. You're growing ARPU at double digit now. How do you feel about that level of pacing and growth and the balance that you're seeing on both of those metrics? And just wondering how things may kind of shift as we look at the rest of the year.
Yes. Obviously, a very strong 12 months. Difficult to predict, Jeff, going forward. As Brad indicated, the -- we had somewhat measured and somewhat quieter holiday selling season relative to last year, so a bit early to predict. Of course, there has been some speculation in the media that there's been sort of a flattening out of smartphone replacement cycles and things, so that may impact sort of our forward-looking 2019 numbers. We're continuing to see strong growth, particularly in that mid- to upper segment for us, so we're continuing to pursue sort of a higher quality subscriber than we were even at this time last year. That may moderate some of the growth figures that you talked about. But as you saw in the last 90 days, we've been able to kind of continue to power through that. I'd say at this point, we're comfortable with our growth. We've got 2 new markets coming on that should help. We've also got some things pushing in the other direction, a little more disciplined and a little more thoughtful inoculation from the incumbents to some of the more at-risk subscribers that they have. So that's making for a little bit less available market. On the other side of that, we'll be opening up more than 1 million new PoPs this year as well. So I think the next 90 days will be a strong indicator of how the year will play out, but we continue to think we're going to have a good, solid growth pattern for '19.
Okay, great. And just one final question on the wireline cable side for Jay. There was a mention in the MD&A about subscribers migrating downward the video packages, so that's sounds like cord shaving. I'm wondering, are these subscribers seeing their content costs go down as well, i.e., are you able to maintain, I guess, the gross margin or gross margin dollars from these customers even as they migrate down or whether there's some flexibility that you don't need on the content side to try to drive that or maintain that profitability?
Yes. Thanks for the question, Jeff. I think as you've seen what we've done on video pricing, it's designed to really provide great value for our customers almost on a cost-plus basis to our cost structure. One of the challenges as you've watched over the last 2 years with our BlueSky entry into the marketplace is we really emphasize choice beyond the flexibility that we had in our programming agreements. And we saw over the past 2 years, a significant degradation in our video margin and also in our video revenue. Q1 was a very positive turnaround quarter for us in cable and video. Where we still had some much more modest declines in revenue and margin, we started to move forward. And the beginning of December looks extremely positive with video as we bring pricing back in line with our cost structure and providing value to our pay TV customers.
Our next question comes from Aravinda Galappatthige from Canaccord Genuity.
A couple questions on the Wireless side. Number one, just wondering if you can sort of revisit the geographic mix. I know you've in the past been alluding to sort of still being heavy on the Ontario side, perhaps 2/3. I wanted to see if that changed materially? And secondly, I think in the past call you alluded to some initial assets around cross-selling in the West. I wanted to see if there's -- if that program has commenced or if there's any early feedback. I'll leave it there.
Aravinda, it's Paul. The split between East and West continues to be 70-30, where it's remained for quite some time. I do expect to see some changes in that as soon as in the coming months on a modest basis as we open up the -- some of the Western markets, including Victoria, which will light up in the coming weeks. And we'll see about 1 million of the 1.3 million PoPs that we add this year with a bias to the West, so that will start to have a bit of an impact on that split. But I wouldn't imagine that that's going to move in a meaningful way for other while yet. On cross-selling, we began -- really our first effort on that was just to sell Freedom products within a Shaw store here in Calgary at Chinook mall. Very, very pleased with the first 60 days or so of that. We'll look to continue to expand the availability of Freedom product within Shaw's retail footprint over the coming months.
Our next question comes from Maher Yaghi of Desjardins.
Guys, I wanted to -- as you continue to drive Internet into your overall mix higher, and as you alluded to trying to work out the profitability on the video side, can you talk about your expectations for revenues on the consumer side for the rest of the year? We saw results holding steady on the top line consumer in the first quarter. Can you maybe just tell us how it's shaping up for the rest of the year? And on the business side, what are the improvements or the potential upside we should see in that growth that we saw a nice uptick in the quarter. Can you talk about what's to come maybe for the rest of the year?
Sure, Maher. It's Trevor. Maybe I'll start and then Mr. Jay will add some things here. But on the wireline segment, our focus really remains on stabilizing the business, improving execution and growing broadband. And certainly this quarter, we delivered on that. From a top line perspective, I would say, we continue to expect consumer be roughly flat and business will contribute mid- to high single-digit growth. And frankly, Maher, we've done that on the top line for the last several quarters. So I'd say that will continue to be the focus and what you can expect from us over the remainder of F '19.
Okay. And in terms of Wireless, you talked about the split 70-30 from Ontario. Do you see a difference in customer mix in terms of ARPU levels in Ontario versus Western Canada?
Very modest. There's a slight increase in ARPU in the Alberta market relative to the rest of the Canadian market. But on balance, it's all within pretty much striking distance of each other.
Okay. And in terms of the retail strategy, you -- how long you think it's going to take before we see an uptick in the retail segment in Western Canada from the investments you've made so far?
Well, they're relatively early. So the new markets that we're opening are really just starting in the coming weeks, and you'll see that continue through the course of F '19 into F '20. Our retail investments there, I think we've indicated in the past that we'll be opening around 30 to 35 corporate stores. About 2/3 of those are in the West, and again, those are all in front of us at this point. So you'll start to see some modest shifts in the retail percentage of contribution over the coming couple of months.
And the focus there, I guess, is mostly on the postpaid because it seems like you were ready to lose some prepaid customers in the quarter to focus on postpaid. What do you think we should be expecting on the prepaid side in the next couple of quarters? It seems like the competition is trying to impact your low end, which is a bit weird for me to understand, but what's your expectations on prepaid?
Yes. You have to ask them about their intentions. As far as our strategy, we are -- I've spoken previously on this call about how pleased we are with the evolution of our corporate stores and our distribution partners on the pursuit of higher-value postpaid subscribers. So I think it's consistent with our strategy. We've asked our distribution to remain focused on that higher value segment. We'll continue to welcome customers of all preferences for payment mechanism over the next number of quarters. As you know, Maher, we launched in July some entry-level price points for data-only subscribers. We're seeing some of those come in on a higher basis of prepay. But overall, we want to continue to focus on the highest value subscriber that we can secure, which is a customer that comes in on a 2-year device financing arrangement on a Big Gig rate plan and signs on to a high-value device. So that's really been our sweet spot. I like the way we're moving up into the higher-quality subscriber profile. But we will always make sure that we've got an entry point for prepay lower revenue subscribers as well.
Okay. And just last 2 quick questions here. On the prepaid losses, the 20,000, how would you say the split was versus the conversion to postpaid and lost to competition? And on the ARPU growth rate, now that you lap some of the entry points on iPhone, how we should look at or expect to see ARPU growth in the future quarters?
Yes. The split was of the losses we incurred this year -- this quarter on prepay, a little more than half were attributable to customer migrations to higher-value postpaid plans. A lot of that was attributable to the incentive that we provided customers to move up and to commit to a higher monthly recurring revenue with us through things like the Big Binge Bonus. So we made it appealing for customers to move up and spend more with us this quarter, and we were grateful that they had the confidence to do so. We saw about roughly 10,000 of those 20,000 losses would've been attributable to competitive losses. On ARPU growth, I don't think we're guiding at this point on that. We're obviously continuing to see our focus be on sort of $50 and $60 subscribers, so you can build your own model on that, but we'll -- you'll continue to see us focus on the Big Gig pricing. And as I said, I think, a couple calls ago, I'm not going to get bored of that anytime soon. It's working for us. Customers are finding it appealing. We're continuing to hear from customers that they love the option of being able to get out of a scenario where they have excess overage charges, and we're going to continue to poke at that. We believe that that's an aspect of the competitive environment that we just find unconscionable, and we're going to continue to leverage that. So customers are voting with their feet and with their wallets. They're staying in record numbers. Now you can probably build your model to support that.
[Operator Instructions] Our next question comes from David McFadden (sic) [ David McFadgen ] of Cormark Securities
I have 2 questions on Wireless. First of all, do you know when you would be done say 80% or maybe 100% of the deployment of the 700 megahertz spectrum? And then secondly, just following along the APPU growth, can you give us an idea what the APPU is on your postpaid growth adds because obviously that would have implications for growth in the future.
Yes. I'll take those in reverse order and then, Trevor, do you want to take the second one? So on APPU growth, the inbound cohort continues to be in the low to mid-50s over the course of the last quarter, so we're seeing new subscribers come on, on those Big Gig rate plans at well above the reported APPU so like the trend that that's putting in place for us.
Yes. On the 700 roll, David, I mean, obviously, that's the focus for F '19. We get a big chunk of it done this year, but just to be clear, it will spill into F '20 as well in terms of the investments.
Do you think you would have 80% of the deployment done by the end of say...
That's a little bit high in terms of by the end of this year, David.
Okay, okay. And then maybe if I can just follow up with another one. So when you're colocating Wireless and wireline in, say, a Shaw retail location, how -- like how does that benefit wireline at all or wireless? Like can you give us any more details there? They're not on the same bill, right. They're just colocating.
Yes, they're not on the same bill, and you're selling Freedom and Shaw services. They're not on the same bill thing I'm not sure is a totally modern thought. I think that may be a little how the marketplace used to operate. It's a simple conversation. It's an opportunity to have a conversation with customers in Western Canada on what their monthly spend is on both broadband and wireless and take the asset to the organization to save the customer money. We're doing it in small baby steps. We're doing it at moments of truth as you onboard customers and as you say customers reduce churn, but it's very helpful for the conversation, David.
And David, it's Paul. Things like being able to profile hundreds of thousands of WiFi hotspots available to our Wireless customers, attributable thanks to the investments we've made on the wireline side of the business. It's a nice cross-sell there, and customers are reacting well to that.
Mr. Shaw, there are no more questions at this time. This concludes...
Great. Thank you, operator, and thank you, everyone, and we'll talk to you soon. Have a good day.
This concludes the time allocated for today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.