Orange Belgium SA

XBRU:OBEL

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, welcome to the Orange Financial Results Q1 2021. [Operator Instructions] I will now turn the call over to Mr. Koen Van Mol, Head of IR. Sir, please go ahead.

[Koen Van Mol, Investor Relations Officer]

Thank you, operator. Good afternoon, everyone. My name is Koen Van Mol, Head of Investor Relations at Orange Belgium.I would like to welcome you to our Q1 2021 earnings call. I hope you are all well. Here with me are Xavier Pichon, our CEO, and I have the honor to introduce to you for the first time Antoine Chouc, our CFO since the beginning of March. As usual, you should have received our financial communication this morning. In any case, you can also find all the relevant information on our corporate website. A Q&A session will follow right after Xavier and Antoine's introductory statement. And I will now leave the floor to Xavier.

[Xavier Pichon, Chief Executive Officer]

Thank you, Koen. Hi there. I hope you're well. Very pleased to welcome you, and thanks for joining our Q1 earnings call. I'm also pleased to welcoming Antoine for his new role. It's great to have you on the field here in Belgium. So the first quarter of the year was, again, of course, impacted by an ever straining competitive environment, together with the extension of the COVID-19 policies. In line with the recommendation of the competent authorities, we have been able to keep our shops open. However, of course, with limited capacity. Nevertheless, we have been able to attract new customers with net adds that are in line with the pre-pandemic levels. Orange Belgium shown strong resilience and delivered solid commercial and financial results for this Q1. The success is thanks to the commitment of our team members and Orange Belgium had the honor to be reelected as top employer during the quarter. We also continued to be an innovative and responsible operator and amongst others in partnership, we introduced smart parking in Waasland Shopping Center, a major shopping center in [ Belgium ]. Also, the Belgium Railways gave us the recognition by renewing contracts with Orange Belgium, providing them connectivity to 13,000 employees and 1,100 (sic) [ 11,000 ] connected devices. In terms of operational results, we continue to grow in cable, and we had 23,000 net adds during the quarter, which is 24.8% higher in comparison to last year. We are now almost at 350,000 customers. Each convergent customer now has an average of 1.7 SIM card. And as a consequence, 21.3% of our mobile postpaid customers are convergent. Last year, this was 17.4% and last quarter, 20.3%, such an increase of respectively, 3.9 points in a year and then 1 point during the quarter. Our GO portfolio continues to be successful as well, enhancing our convergence strategy, we were able to have 23,000 mobile postpaid net adds, reaching then a customer base of 2.7 million clients, which is a growth of 3% in comparison to last year. During this quarter, we have also extended our GO Unlimited promotion, providing then our customers unlimited data for the price of EUR 30 per month. The convergent ARPO declined slightly by 2.8% to EUR 73.8 in comparison to last year, mainly due to the discounts provided on mobile tariff plan in convergence, enhanced by the increase of Love Duo in our customer base. Our mobile-only ARPO decreased also by 3.4% to EUR 19.6, which is mainly because of the drop of -- in the out-of-bundle with lower roaming and mobile data, typical effect of the COVID restrictions. And now I would like to hand over the floor to Antoine for this quarter's financial review.

[Antoine Chouc]

Thank you, Xavier. As mentioned by Koen, I've joined Orange Belgium since the beginning of March as Chief Financial Officer. I've made the acquaintance with a dynamic company, including engaged team members, and I'm very honored that I can present to you for the first time the results for the Q1 of this year. Again, we had a quarter that has been impacted by the COVID measures, limiting our commercial capacity, mainly in the shops. In terms of revenue, we were impacted most importantly by SMS in comparison to last year. We had a decrease of more than EUR 12 million in revenues in comparison to last year for incoming SMS. These revenues are offset to a similar amount in our direct cost as this traffic is very balanced. Because of the travel restriction, both customer and digital roaming were impacted importantly, decreasing, respectively, by 2.5% and by EUR 1.8 million year-on-year. People were also more at home, which made that there was more usage on the WiFi connection instead of mobile data. Therefore, domestic data decreased by EUR 1.3 million in comparison to the same quarter last year. While our revenues were impacted by a total of almost EUR 80 million because of COVID-related measures, our EBITDAaL decreased by EUR 3.5 million. Consequently, our total revenues decreased by 1% to EUR 330.4 million. Nevertheless, our retail service revenue grew by 1.9% to EUR 229 million. The success of our convergent offers and the related revenues is the main reason for growth. Convergent service revenue grew by almost 17%, reaching EUR 60.4 million. The mobile-only services revenues decreased by 4.8% to EUR 141 million. Our EBITDAaL reached EUR 70.1 million, thanks to increase in retail service revenues, but also thanks to seasonal and one-off effects. The seasonal effect is linked to advertising and promotion. Indeed, last year, we had an important campaign following the launch of the GO portfolio. Therefore, we made this quarter around EUR 3.6 million less costs. In addition, following a specific agreement we've made with our roaming partners, we had a one-off effect of EUR 1.5 million on the EBITDAaL. Without this seasonality effect and this one-off effect, we would have reached an EBITDAaL of EUR 65 million, an increase of 4.6% in comparison to last year. Our eCapex was comparable to the one of last years, with only an increase of 2.6%, reaching EUR 36 million. This eCapex doesn't include license spectrum fees as usual. In view of this solid financial performances and despite of COVID impact, we are confident to reach our targets, and we confirm the guidance of low single-digit growth in revenues, an EBITDAaL between EUR 320 million and EUR 340 million and eCapEx between EUR 200 million and EUR 220 million. With this, I conclude this presentation, and we are now ready for your questions. May I ask you operator to now open the call for the Q&A session.

[Operator]

[Operator Instructions] We have one first question from Mr. Nicolas Cote-Colisson from HSBC.

[Nicolas Cote-Colisson]

My first question will be on KPIs. And I've got a second one on your business plan. On the KPIs, the ARPU dilution for convergent offers, you explained that it is also due to the Duo offers. And I wonder if you could elaborate on this, do you see any Trio clients spinning down to Duo? And how does it impact the gross margin? And also, can you tell us more about the home Internet product? And how large is the market opportunity for such a product? On the business plan, referring to what has been published as per the prospectus. Can you explain why the EBITDA in the business plan for 2021 is much higher than the guidance? And on the depreciation side of things, same thing. The business plan is indicating a big drop in depreciation in 2022. I was wondering if you could explain this?

[Antoine Chouc]

So regarding your question on the ARPU dilution. Today, we have around 1/4 of our clients on cables that are on Duo offer. So it means an ARPU per client, around EUR 15 less compared to Trio customers. But as you know, the impact on the margin because of quite high content cost it's almost neutral. So there is a dilution on the ARPU side, of course. But in terms of profitability, it's more or less neutral. And as you know, we increased this quarter by almost EUR 6 million year-on-year, our profitability at EBITDAaL level of our cable. So it's also proof that the increasingly converged Duo in our customer base doesn't impact the profitability on cable. So that's maybe the first question. You also had a question on our -- on the success of our home offers. For the moment, it's not -- it's still quite low. We have less than -- probably less than 10% of our gross adds on the Internet-only users as our main focus remains on convergence offers, both Duo and Trio. And we clearly aim at providing the home clients with mobile tariff plans, and we have a dedicated marketing plan for that. So I think I answered your question on cable, and I'll let Xavier maybe answer your question regarding the guidance and the business plan prospects.

[Xavier Pichon, Chief Executive Officer]

Nicolas, just maybe to complete what has been said by Antoine on the last point, which is home -- making broadband offer. So what we said during the launch session was we were, I would say, reaching a kind of market, which represents around 10% of the fixed market as a whole. So that's why it could be considered as a kind of a niche market. But last but not least, okay, we've seen some interesting -- we see interesting numbers at D&A, even if it's quite small compared to the whole convergent cable access, okay? So it's promising in a way. So we will, of course, continue and pursue to work on this considering that we need to tackle all the segments within the fixed market. So related to your question #2, I guess that maybe you will be the first one, but I guess that there will be other people in the room asking the same question. So what we have said on this. So as indicated in its fairness opinion, so we have provided the Degroof Petercam, a trajectory update, which is not a business plan. And this business plan -- this trajectory update, has been presented by the management to the Board in November 2020 for information-purpose only. This trajectory update is a top-down exercise that does not incorporate several negative scenarios that may impact the short and the long-term results for OBE. For instance, it does not incorporate the loss of the Mobile Viking MVNO contract. You know that, of course, this asset has been bought by Proximus. And this loss has been adjusted by Degroof Petercam. Though considering the likelihood of the closing of this transaction. So the guidance that was communicated is much more our guidance. The one we communicated is much more balanced figures, which takes into account risk and opportunities for the company. And of course, to us, this is the most relevant indicators to guide the market on the future financial performance of the company.

[Nicolas Cote-Colisson]

Okay. Okay. No, I get that. Just on the D&A, I accept the trajectories, but there was a big drop in the D&A from '21 to '22. So this one, I don't know exactly what was the reason in your top-down exercise. The amount being EUR 70 million down.

[Xavier Pichon, Chief Executive Officer]

Okay. It was not something...

[Antoine Chouc]

I think the main explanation is because we have to book in 2021 quite high level of discounting provisions because of the RAN sharing implementation and all the sites will have to decommissions in the coming years. We have to book quite a high level of [indiscernible] provision in 2021 and that explains part of the decrease of the D&A in '22 compared with 2021.

[Operator]

Our next question is from Mr. David Vagman from ING.

[David Vagman, Research Analyst]

Yes. So first, and apologies coming back on the EBITDAaL guidance. I understand that it's a top-down exercise. Now you say that the independent expert has adjusted this top-down exercise for the loss of the MVNO contract. So I would say, when you compare yourself to the independent expert EBITDAaL. What is in your view, the key headwinds that you prefer to factor in in your guidance? So the EUR 320 million to EUR 340 million that will not have been modeled by the expert. So that's my first question. And then on the building side transformation plan, could you comment and come back on the expected savings for this year? I think you previously mentioned a figure of EUR 30 million. So what is ongoing exactly and what are the results? And then last question, if you could come back on the big increase in the cable EBITDA profitability, so up EUR 6.2 million to EUR 8.8 million and explain the operation and financial metrics dynamic there. And how much actually is thanks to the -- maybe the seasonal advertising pattern related to GO?

[Xavier Pichon, Chief Executive Officer]

Thanks, David. So for your question number one, what we have said during the -- I think it was during the Q4 full year results earnings call. So we said that we were, I would say, carefully monitoring what could be our first -- the COVID situation. And I think that related to what happened during the Q1, I think we were right at the end. And I guess it will be the same maybe momentum for Q2. Of course, depending on the sanitary and the health sanitary evolution, so we don't know, of course, all the things related to this. But at the end, we've seen the shops, as we said, open, but with limited capacities. We are mandatory working from home till last November, and then is it will be -- it's going to be the case also by June. So we are, of course, careful about this. The point number 2 maybe could be the market dynamics. And I think that you have observed that during the Q1, we had, of course, several promotions and new offers and discounts above and below the line among the market. So this is something, of course, maybe that will be continued for Q2 and maybe for the whole year as well, of course. And then maybe last but not least, that we are monitoring our cost base. There is also something related to subsidies and as the market dynamic we observed some increased subsidies announced among the market, which is not really the case within Orange, but we observe coming from others that the market dynamic also on the handset is huge. So this is all the things that we have monitored within our guidance, and that's it. And that's why we said that we had a range. And the good thing and that related to the Q1 exercise. We -- of course, we are reiterating the fact that we will reach this guidance in this bracket for 2021. And that's it. For your question #2, Antoine?

[Antoine Chouc]

What I can say is that we still target around EUR 30 million savings for 2021 as we were able to achieve in 2020. So we have a number of actions that we -- that we monitor, especially to monitor our labor costs, our cable cost. I'll come back to that in 1 minute to answer your question on cable profitability. So yes, what I can tell you is that we still target at least EUR 30 million savings in -- for 2021 has -- yes, as we guide in the last quarters. Maybe to answer your question on the cable profitability. As I told you, year-on-year, we have an increase of our profitability at EBITDAaL level of around EUR 6 million. And we are also cash positive this quarter, even if it's probably a temporary effect in view of both the evolution of the Wall Street tariffs and the strong commercial momentum on the cable. It will be a great challenge to keep on being cash flow positive for the whole year. But let's maybe -- let me share with you some improvements on the operating efficiency of our cable operations. First, we improved the, the customer onboarding process. We upgraded the set-top box firmware and the user interface in the past few months, and this has clearly resolved many performance issues and has reduced call to our call centers. We have a huge drop in the past few months in the call to our call centers. So of course, it means great savings on customer management. We have also implemented virtual assistance where our call agents can do diagnostics remotely. So once again, it's a source of very significant savings. And maybe last, but not least, the single installer process has reduced the number of repairs. It started in July 2019, but it's still ongoing, and we're still benefiting from concrete improvements in our operation, thanks to this single-installer process. So that's the main triggers in terms of operational efficiencies that enabled us to increase our profitability on our cable operation in the last -- over the last year.

[David Vagman, Research Analyst]

That's super interesting. And on the single-installer, so you say it has reduced the number of repairs. What do you exactly mean that there to come back and repairable?

[Antoine Chouc]

That's it, or people that are calling our customers' services because they face -- they have problem with their connection and that then we have to send someone to intervene at their home, and we can avoid such intervention thanks to all the actions that I just described. So that's exactly my point.

[Operator]

Next question is from Mr. Roshan Ranjit from Deutsche Bank.

[Roshan Vijay Ranjit, Research Analyst]

Just 2 quick ones for me, please. Just going back to the advertising and promotion tailwind. I think, Xavier, you mentioned upfront still the competitive environment in the market. Yet you still delivered very good KPIs. Should we think about that tailwind or that spend maybe being deployed later in the year? Or is that still potentially a saving that can be booked given the maybe easing of the competitive dynamics in the market? And secondly, on the convergent product, is it possible to get a sense of how receptive the customer base is now to the Internet boost, the 400 meg product. I guess we've now essentially been a year at home, maybe people feel the need or the ability to upgrade to the 400 meg. I think we saw one of your competitors launched 1 gig, up from the 400 meg. So I just want to get a sense, are you seeing customers now more willing to take those faster speeds?

[Xavier Pichon, Chief Executive Officer]

Roshan, thanks a lot for your questions. Maybe for the first one, you're right to say so. It's a bit interesting to see the market evolution for Q1. In one hand, so we had less customer flows within our shops. On the other hand, we had some -- as I said, maybe the others will say so as well. So we had some intensive environment in terms of emotion. So what we decided just to postpone from Q1 to all the quarters, part of the A&P spending we were monitoring at the beginning. And then for the quarters to come, including the Q2, we'll see if we need some A&P spending among to sustain and straighten the commercial flows. Honestly, it was not really the case for Q1. As you can see, we've had pretty good commercial results on both sides. Of course, on the convergent, which is one of our main value generation pillar, but at the end, we'll see for the future. It will depend either on the COVID situation and then on the commercial situation as well. For your point number two, your question point -- question, sorry, number two, it's a really, really, I would say, good question. So we've seen that yesterday or maybe the day before. So -- but of course, we heard about it coming from others in the north of the country where of course, we could think about the battle to come between fiber and high speed cable, [indiscernible] cable. But the question -- your question is tricky because we don't know right now so far if there will be some appetite coming from the customers. Related to the other European market, we think -- we believe it would be the case. But we'll see at the end, it will depend also on the retail price. And to us, if this is maybe the question that will come to an end, that the question, of course, will be to follow the market. We do have only a few part -- very, very few parts of our customers having the speed boost option. It's -- to me, it's less than 5% of our customer base. But of course, we're ready for following the trend and then related to the wholesale price will adapt or not, we will see that, even if it's not the question today, but we'll see in the future, in the long-term future or medium-term future, if we will adapt or not our range of offers. And of course, we are monitoring the willingness of the customers and the appetite of the customer on that side. But it's a really interesting question. And to us, the question is, will the market -- will the Belgium market follow the others in a way.

[Roshan Vijay Ranjit, Research Analyst]

Great. That's very helpful. And if I could just quick follow-up. On the 400 meg, if a customer does want to take that product, is that just simply a remote upgrade, there's no need for any new router equipment that's all done on the existing equipment and just fix switch, 400 meg delivered?

[Xavier Pichon, Chief Executive Officer]

Honestly, personally, if you double check, it's rather if the website or the app is able to do so. But I think, yes, okay. We can do that remotely.

[Operator]

Next question is from Mr. Emmanuel Carlier from Kempen.

[Emmanuel Carlier, Research Analyst]

Yes. I have 3 questions. First of all, on subscriber growth. So this was a very strong quarter despite the restrictions in the shops. Just wondering if you could kind of filter out what the effect in your opinion was because of the restrictions in the shops. Main reason why I'm asking is that if I look at the Q1 trend and I look at what consensus is expecting for 2021, it looks like the market is rather expecting a substantial slowdown, more than acceleration. That's question one. Question two, yes, I'm still surprised I have to say, with the delta between the guidance of Orange Belgium, the official one and the business plan. I heard your comments, but -- yes even taking into account these comments, I just think that the gap between both remains surprisingly high. So yes, if you could just maybe highlight a little bit better the magnitude of all these elements you expect? Or maybe you've forgot some elements, I don't know. But yes, I think it's very hard to reconcile for investors. And then the final question is just a small question on the churn levels at cable. So they used to be pretty high. I would love to hear how this trend is evolving and what current churn rates are today?

[Xavier Pichon, Chief Executive Officer]

Thank you, Emmanuel, for your question. So for your question number one. I guess we suffered on the flows -- on the customer flows within our shops. But of course, we had the chance to get, as we said, very involved team members and then even the other channels like the call centers and then also the -- of course, the website, and we've been able to compensate the flows we lost, I would say, in some weeks -- for some weeks in the shops. So we are happy with what we've done commercially speaking. Of course, the trend was maybe a bit better than the consensus as it has been shown. But at the end, it has been made also with promotions within the market. As we said, we have extended our GO Unlimited promotion. So it's -- and then even if we have not really increased our level of subsidies, okay? We've been there for part of the quarter. So this is something we've done. We're happy with that. But it's not done for Q2. As I said, the market continues to be tensed. And we do believe that related to the maybe COVID situation, and there may be all the topics within the market. We know that there are some that has been -- that would be proceeded in the coming months, maybe. We do believe that and we foresee some quite animated market for Q2 and then for the -- for H2 as well. And this is something of course, we've taken in account. For your point number 2, I can understand that you are surprised. But at the end, this is something maybe when you see what has been done, what we've been able to do for the Q1, okay? And the situation we have here in Belgium, not alone, of course, a lot of countries are experiencing such issues. But in Belgium, it's pretty tough. And then related to the kind of uncertainty we do have for the future of this year, 2021. I think we've been -- we did right, okay? We did the right thing to give this bracket. And at the end, we will see. That's it. And for your question on cable...

[Emmanuel Carlier, Research Analyst]

Yes, sorry to interrupt, but I'm not only referring to 2021, but also the years thereafter. So I think it's just quite surprising to see that the gap is so high between all the years. Same with the first question I asked, I hear your point. On the other hand, I would expect that as the main challenger in the market, you should benefit the most from the shops going fully open again.

[Xavier Pichon, Chief Executive Officer]

Okay. It could be seen like this, but at the end, we don't know, okay? And the other, they have the same issue. So of course, they will push the market dynamics on their side as well. So we don't know, okay? It's quite, of course, optimistic guidance but related to a market where we do have a lot of uncertainties. And that's why we gave you the bracket. Sorry for your question related to 2022 and the other degree. We haven't given any guidance. So okay, to us, there is no issue on that side. Maybe you've seen a gap for 2021, and then we gave some explanation and precise explanation on this, but that's it. For the other years, it's not, I would say, an issue for us. And then...

[Emmanuel Carlier, Research Analyst]

Yes, but the gap between the independent valuation and consensus remains quite high after 2021 as well. That's more the point I made.

[Xavier Pichon, Chief Executive Officer]

But this is the answer we gave you, okay?Okay. And for the point number 3, the churn level on cable.So regarding the churn level on cable, what I can tell you is that the -- our cable churn is well oriented this quarter. It may be thanks to the COVID period, but I do think it's also thanks to all the operational improvement I described earlier in answering to David's question. So -- and what I can tell you also is that cable monitoring is absolutely key in our plan to consolidate our ability to be cash flow positive on cable. So that's clearly something we are very and on a weekly basis monitoring. That's what I can tell you.

[Emmanuel Carlier, Research Analyst]

Yes. And I guess you don't want to disclose any churn number?

[Xavier Pichon, Chief Executive Officer]

No, we don't disclose such figures.

[Operator]

Your next question is from Mr. Ulrich Rathe from Jefferies.

[Ulrich Rathe, Senior European Telecommunications Analyst]

My first question is, you mentioned earlier the promotions on the GO Unlimited. Could you comment a little bit how -- what do you see that sort of thing -- of that sort of promotion and how do you see the rationale in the market? And how you would address the question that once you GO Unlimited, that sort of caps the ability to upsell in the future. It's a bit of a watershed. So why is it the right thing to do to promote a relatively aggressive price point, the unlimited offer which essentially then gets customers in that are hard to upsell. The first question. Second question is, would you have any updates on discussions that you might have in Flanders, your partners in fiber?

[Xavier Pichon, Chief Executive Officer]

Thank you, on your point number one, of course, you can easily understand that we can't disclose any precise issues with that because our details on that because there is some competitive tactics. Just to make it clear, okay, of course, we have clearly and precisely monitored the net effect of such promotions, which was not something, I would say, done so far in Belgium. Maybe just to say that all in all, taking in account all the growth net effects and then ARPU and then, of course, long-term value duration and so on, okay, to us, that's something that will create value at the end. And then that's why we've decided to extend the promotion another time during the Q1. But I don't want to give much more details on this. Point number two, there is, I would say, no heads up, no breaking news on that side, okay? As we said, we are closely monitoring the situation on FTTH and cable per region, which is the case, of course, for Flanders, but there is no news on that. The studies are still continuing.

[Ulrich Rathe, Senior European Telecommunications Analyst]

Can I maybe follow up -- can I follow up on your first answer. Would it be possible to just outline where that intake ultimately comes from? Is it -- and whatever you're willing to disclose there, whether it's a geographic issue or existing customers, whether it's returning customers, whether it's completely new customers to Orange or whether it's -- anything about sort of segmentation or sources or ultimately target segments here when you push that product into the market?

[Xavier Pichon, Chief Executive Officer]

I will ask Koen to handle it, okay?

[Operator]

So we have the next question from Mr. Santos Palacios from Polygon.

[Santos Palacios]

And welcome Antoine to the company. Looking forward to collaborating with you, hopefully for many periods in the future to come. I wanted to ask a couple of questions. I wanted to ask you about your ambitions for the fixed market share in the country. You guys had said at some point even in the press that you would, over the medium term, long term, looked for 25% market share in the -- in fixed. I was wondering whether you are still looking for that sort of market share eventually in the country? I had a second question, which is management told Degroof Petercam. but you may need to spend money in building fiber-to-the-home in the future? As a result of which the Degroof Petercam has actually increased their CapEx needs for the company in the long term. Can you please explain to me exactly how that would work? I mean, I assume that given that you would build fiber-to-the-home, you would actually be saving hell of a lot of wholesale cost. So I just wanted to understand that obviously, such investment would actually imply a big EBITDA margin improvement for your fixed business all else been equal. So I just wanted to understand that point maybe a bit more precisely. If you ever decide to make such an investment. And my third question would be on Mobile Vikings, have you made allegations yourself to the competition authority against the approval of the sale to Proximus? Do you think that there's a serious competition concern from such a move? Those are my 3 questions.

[Xavier Pichon, Chief Executive Officer]

Thank you, Santos. So for your question number 1, so you're right you say so, of course, So our long-term goal is to reach, I would say, the same market share in both markets, in both segments, fixed and mobile. So the 25% are related to this goal. And of course, the major goal, which is to increase dramatically the ratio, the convergence ratio. You may notice that we've been able to increase, as we said, this ratio by 4 point, around 4 points on a year-to-year basis, reaching then 20% -- above 20%. So that's, of course, our long-term goal, and you can see that related to the market the commercial results we continuously have quarters after quarters, okay? We are on this way, I would say. And then the first step, of course, will be to reach the 20% in the medium term. For your point number two, so the CapEx. So as we've said, and it was part of the previous questions coming from your colleague. I don't know what has been put in the Degroof Petercam CapEx figures or model. I don't know, do you know, okay. I don't know what kind of assumption this guys have taken. But what we aim to do, as we said, is to look at -- and I would say that the best solution for Orange Belgium in terms of either fixed and mobile network, premium network policy. So the fact that, of course, we are looking for the best solution could be, as we said, and we've already said that, either to continue to be a whole buyer guy, okay, within the market and/or to do some co-investment. So that's it. But at the end, as I said, we don't know what has been put by the Degroof Petercam in this model related to CapEx. And then maybe last but not least, on your point number three, we don't have anything to say on that. It's something related to the market, and we can't answer your questions on this.

[Santos Palacios]

Okay. Sorry, just to add up to the CapEx assumption. If you were to invest in fiber. I would think that you would save the wholesale cost and as a result of which the EBITDA margin of your fixed division would mathematically increase? Is that correct?

[Xavier Pichon, Chief Executive Officer]

If we coinvest in a way in networks, I would say, in gigabit networks. Of course, we'll have maybe share the impact benefit to either EBITDAaL and then maybe eCapEx at the end. But as I don't know anything about even the possibility and then the business model, I can't answer your questions. That's it. It's too early.

[Santos Palacios]

Sorry, one follow-on. So on Mobile Vikings, when are you expecting to have the decision by the competition authority? And by the sound of it, you are giving it as 100% probability, this will happen?

[Xavier Pichon, Chief Executive Officer]

I have no clue on this. I don't know. It's not in our hands. It's a bit deceptive, I can't answer your questions. Please ask either the competition [ watchdogs for opportunities ].

[Santos Palacios]

Are you taking any measures to counteract the impact from Mobile Viking's loss at this stage?

[Xavier Pichon, Chief Executive Officer]

As we said, we are using promotions, and we use promotion for the Q1. That's it. Nothing more.

[Operator]

Our next question is from Mr. Ben Lyons from Crédit Suisse.

[Benjamin Lyons, Research Analyst]

Just a quick one on the SMS revenues. Is -- how much do you think of that is permanently gone? And how much do you sort of expect to come back once traveling begins? And the second one on cable. You mentioned that you want the cable business to become cash positive. But we're seeing cable pricing, wholesale pricing go up over the next few years. At what point do you think you'll have to move up your price points in the market?

[Xavier Pichon, Chief Executive Officer]

Thanks, Ben, for your question. As I told you, we lost year-on-year around EUR 12 million of revenue from incoming SMS without any impact on our profitability. And we expect that in a post-COVID era, SMS traffic will hopefully come back to normal, and we -- if it is so, we should get this EUR 12 million back in our revenues. But once again, there is no impact on our EBITDA as it's explanation of such significant revenue, I would say, it's only because we -- the wholesale SMS tariffs in Belgium are very, very high and maybe one of the highest in Europe, but as the SMS traffic is very well balanced between all the operators, there is no profitability impact. On your second question regarding our ability to become cash positive and if we will have, at the end of the day to move our price point. What I can tell you is that up until now, we've not increased our prices. We have a lot of actions, ongoing actions, and I talk earlier on -- of the churn monitoring. And so we have a lot of actions that are ongoing so that we will be able to improve our profitability in terms of cash without having increasing our prices, but there is obviously no taboo, and we may consider to increase our retail tariffs in the future if we have to face an increase of the cable wholesale tariffs. So that's the way it goes. It's not -- it would obviously not be our first best. But it could be an option if we all see tariffs go up.

[Operator]

We have one last question from Mr. Nicolas Cote-Colisson from HSBC.

[Nicolas Cote-Colisson]

Yes. Sorry, a quick one. You just mentioned you were keeping all options open regarding your fixed network strategy mentioning wholesale and/or co-investment. So I just wanted to check the status on your appetite for VOO?

[Antoine Chouc]

So yes, as I told you or as Xavier told you, all the options are, are open on the fixed market. And regarding VOO, we understood that the sales process will -- should be launched in May from -- for the moment that the Board of [indiscernible] takes the decision to start a new process for the sale of VOO. We will obviously look very closely to the different conditions for such a transaction. We'll look at the evolution of the market and the model that will be on the table. So we will obviously pay strong attention to this process. That's what I can tell you, and it's, I think, very current with what Orange Belgium has always told on this issue.

[Xavier Pichon, Chief Executive Officer]

No change.

[Operator]

Thank you, sir. We have no other questions.

[Koen Van Mol, Investor Relations Officer]

Okay. Thank you very much for your participation in this call. Would you have any further questions, please do not hesitate to contact the IR team for further answer. Thank you very much, and have a good day.

[Operator]

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.