Orange Belgium SA

XBRU:OBEL

Earnings Call Transcript 2020-Q2

[Operator]

Ladies and gentlemen, welcome to the Orange Belgium Q2 and Half Year 2020 Results. [Operator Instructions]I would like now to hand the call over to 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 for our Q2 2020 earnings call. Here with me are Michaël Trabbia, our CEO; and Arnaud Castille, our CFO. And as usual, you should have all received our financial communication this morning. In any case, all the relevant information is also available on our corporate website. A Q&A session will follow right after Michaël's and Arnaud's introductory statements. I will now leave the floor to Michaël.

[Michaël Trabbia, CEO & Executive Director]

Thank you, Koen, and good afternoon, ladies and gentlemen. I would like to start, as usual, with the main events that have been taking place during the quarter and go directly to Slide 4 to the -- in the presentation, to start, obviously, with the COVID. We have been impacted by the COVID-19 pandemic as most companies, obviously. Nevertheless, we deployed continued efforts to ensure our customer could rely on Orange Belgium as a trustworthy connectivity provider, as connectivity is and has been even more critical for Belgium consumers, businesses, hospitals and administration in this period of time. We also maximized our efforts to ensure our employees received the necessary protection equipment in line with the decision of the competent authorities and even beyond. Following the COVID-19 measures, our shops remain closed from mid-March until 11 of May, which temporarily slowed down our commercial performance. Thanks to our operational resilience and the continued effort of our teams, we came back at the end of the quarter to more normal performance levels. Our employees also came back to the office since May 18 to -- on a limited basis, and we rearranged the office space to ensure social distancing and providing protective equipment. On Slide 5, you see that the closure of our shops resulted in lower net adds than usual, but still positive of both our convergent and mobile customers. Handset sales also dropped as a consequence of the closures. The decrease in handset sales impacts mainly revenues as margins are low in this business. The travel ban resulted in an important decrease in roaming, both visitor roaming and roaming by our customers. The loss of roaming revenues was partially compensated by the decrease in roaming costs. During the lockdown, our customers also have sent significantly less SMS. And in Belgium, the interconnection rates are quite high, which impacts quite substantially our wholesale revenues, however, with no margin impact as it is a balanced traffic and we decreased the cost to the same extent. All in all, the COVID impact on our revenues was EUR 38 million in Q2. The EBITDAaL impact was much more limited, and we managed to mitigate it, thanks to our efforts on the cost. Let's go further on Slide 7 to review the operational highlights of the second quarter. In order to better address the customer demand for higher speed, we upgraded our Internet boost option to an ultra-fast download speed of 400 megabits per second. Our B2B customers can also benefit from this 400 megabit per second Internet connection. In addition, we updated our Love Duo offer to allow our so customers to benefit from the multi-product advantage that was already available for our residential customers. You can see on the next slide that just after the end of the quarter, we were able to sign an agreement with Eleven Sports providing the possibility to our customers to access the Jupiler Pro League. So that's the Belgium National League. Orange Belgium was the first one to sign this agreement, and it's an agreement valid for 5 coming years. And in line with our bold positioning, our Bold Challenger positioning. We just announced that we would provide those channels and this offer at a very reasonable pricing of EUR 10.99 for all our Love Duo customers, meaning that we don't force our customers to enter into a larger pack and more expensive pack of content, knowing that the international football is already included in our basic TV offer. Slide 9, in terms of key achievement of the quarter, we can see that, obviously, as I mentioned earlier, the commercial activity was impacted by the COVID measures. So we had 8,000 convergent net adds in the quarter, resulting in a customer base of 288,000, an increase of almost 34% year-on-year. So we continue on our dynamic. On the mobile side, we had 7,000 net adds during the quarter, reaching 2.6 million customers, an increase of 3.1% year-on-year. At the end of the quarter, almost 18% of our postpaid customer, our are now also convergent customers compared to 13.6% 1 year ago. Arnaud will detail more the financial results. But from an overall perspective, as you can see, we can put forward positive results, in particular, with a sustained and strong EBITDAaL growth that was up by 9.7% to EUR 86 million during the quarter. On Slide 14, you will notice the continuous increase of the usage of mobile data by our customers has paused a little bit during the continent period. Our smartphone customers have an average of almost 5 gigabytes per month. And the total usage of data traffic has increased by 27% year-on-year. On Slide 15, our convergent ARPO has slightly decreased by 1.5%. About 1/3 of our convergent gross adds are Love Duo customers, so without TV. As a consequence, they now represent about 15% in our customer base, lowering the overall ARPO, but it is not an issue, as you know, those customers and the profitability of those customers are -- is similar, not to say a little bit better than Love Trio customers. Our mobile-only ARPO has decreased by 4.6% to EUR 19.7. This is mainly the impact of the COVID-19 on roaming that has lowered the out-of-bundle revenues. Going to Slide 16. You know the regulators have made their decision for the new cable wholesale pricing that is now applicable since beginning of July, leading to a further reduction in the wholesale rates to be paid to the cable operators. So this decision was important and it was indeed important to have this. Nevertheless, we consider, you know that the rates are still above fair charges to the detriment of the customers and that the increases planned over the next years are not justified, and that's why we call upon the regulators to review those prices in the current of 2021 to avoid and justify further increase. The 1st of April, the employees of Proximus and Orange Belgium that are concerned were transferred to the newly created joint venture called MWings to manage the radio access and the joint radio access network, and they are currently working hard to prepare the consolidation of the 2 networks for the radio access network sharing. We proceed now to Slide 17. Our Bold Inside transformation program also continued to deliver during this quarter. We continue to work on our 3 principles: simplification, digitalization and empowerment. In order to simplify our offers, we are in the process of migrating our customers to the new GO portfolio. And already 1 customer out of 5 has already migrated to this new portfolio after only a few months. We also renegotiate our contracts on IT and network with partners, leading to savings. We focus also to boost our nonphysical channel, our web, digital, but also telesales channels. This has been boosted by the confinement. And we focus and work to maintain and even increase this trend after the lockdown. This was also supported by the launch of our new e-shop in March. Finally, in terms of empowerment, we provided more end-to-end responsibility, in particular, to improve first call resolution at customer service level, which is key to manage our customer service costs. And we see that we are able to decrease those costs per customer. And we also took initiatives to develop agile way of working within the organization. Before handing over to Arnaud for this quarter's financial review, I'd like just to say a few words. As you know, this is my last result presentation here at Orange Belgium. After 4 intense and passionate years, I will step down as Orange Belgium CEO in a few weeks to take a new and exciting challenge as Chief Technology and Innovation Officer at Orange Group. I am very proud of the commitment and efforts of our team that allowed us to successfully position Orange Belgium as the customer-centric Bold Challenger of the Belgian market, become a credible conversion player and deliver a solid and sustained commercial and financial growth. As from 1st of September, Xavier Pichon will take over the lead of Orange Belgium. And I am convinced that Xavier together with the teams will bring Orange Belgium to further successes. Arnaud, the floor is yours.

[Arnaud Marie Julien Castille, Chief Financial Officer]

Thank you, Michaël. So I will go quickly through financial to keep more time for Q&A. So let's go to Slide 20, where you will notice that despite the decrease in overall revenues, our retail service revenues have been increasing with 2.1% year-on-year to EUR 221 million. If you go to Slide 21, you see that the growth in retail revenues has been mainly supported by the strong increase in convergent service revenues. These revenues have grown with 33.2% year-on-year to EUR 54.6 million. In Slide 24, you see the waterfall of our revenues in comparison to last year. On a comparable basis, we had a revenue of EUR 328.7 million in Q2 2019 by adding BKM revenues to the reported revenues. Our retail service revenues have increased with EUR 4.6 million, mainly because of increase in convenience revenues, compensating in the mobile-only services. The wholesale revenues, as explained by Michaël, were mainly impacted by the COVID crisis with an important decrease in SMS termination, which has no impact on margin because of the balance in traffic. Roaming has also been impacted by the crisis, but is also compensated from a margins perspective because of the decrease in roaming out. Equipment sales dropped significantly because of the closure of the shops. But again, impacting only slightly the margin. In Slide 25, you will see the buildup of the EBITDAaL. You notice immediately that the loss in revenues, mainly on wholesale and equipment sales is compensated by the improvement of the direct costs. These direct costs were impacted by the decrease in SMS, the decline in roaming out, the drop of onset equipment and the decrease in commissions because of the slowdown in commercial performance. Together, with an improvement of labor cost and stable indirect costs during the period. This had led to an EBITDAaL of EUR 86 million, an improvement of 9.7%, [indiscernible] 10% in comparison to last year. Also in eCapEx, we had a decrease during this quarter. We are on Slide 26. So lockdown meant that our commercial performance was lower, which led to less cable installation and thus, a decrease in cable eCapEx. Also, our network deployment was slowdown, which all decreased our eCapEx by more than 30% for the quarter. In Slide 27, we show you that our cable P&L continues to improve and reach a positive EBITDAaL at EUR 6.4 million for the quarter, while for the quarter of last year, it accounting for EUR 2.4 million. In terms of cash flow, the quarter was still negative for an amount of almost EUR 1 million. So Slide 29, following the COVID-19 crisis, which has led to lower commercial activity, we already mentioned during the announcement of our results of the first quarter that we would reevaluate our guidance for this year. You can find the outcome of this change. We see an impact on our revenues, mainly due to the closure of our shops, which has led to a lower acquisition of new customers, but also a drop in our onset sale. In addition, traffic decreased mainly in SMS and roaming, while typically, SMS and roaming and handset sales are low-margin activities. We have been able and continue to control our costs. And as a consequence, our EBITDAaL is less impacted. eCapEx will, however, decrease because of a decrease in cable installation and a slowdown in network deployment. Therefore, we will adapt our guidance for revenues from low single-digit growth to slight decrease in revenues on a comparable basis. We maintain our EBITDAaL to the range between EUR 310 million and EUR 330 million. While we initially foresaw stable eCapEx, we now foresee a slight decrease, including CapEx following the implementation of the RAN sharing agreement. With this, I conclude the presentation. We are ready for your questions. Operator, may I ask you to now open the call for Q&A?

[Operator]

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

[Nicolas Cote-Colisson]

Two questions, please. The first one is just coming back on your very strong performance on cable EBITDAaL. Can you take us through the math? Because I'm just trying to understand what is linked to the lower acquisition costs linked to the low volumes? And what is linked to the cost savings or efficiency gains. And my second question, given the growing pattern of the wholesale tariffs from next year, should you start engaging in talks now regarding fiber co-investment? This is the kind of schemes that works well, but takes some time to establish. So any views from you on this would be greatly appreciated.

[Michaël Trabbia, CEO & Executive Director]

Nicolas, I will let Arnaud answer the first question on the cable EBITDAaL, and I will then answer on the wholesale tariff and the fiber topic.

[Arnaud Marie Julien Castille, Chief Financial Officer]

So it's quite easy to share the part of the acquisition cost and the run rate for cable. And you know the acquisition cost is CapEx. The reason why the CapEx were very low this quarter, minus 34%. So directly linked with the low level of acquisition. But in terms of EBITDAaL, it's mainly the improvement of our process and of course, the improvement of the wholesale price compared to last year because remember, last year, the wholesale price was quite higher than the current one. So both together, improvement of wholesale and improvement of mainly customer service, increased EBITDA. And so if we do now the calculation in terms of unitary EBITDA, as you know, the revenue is close to EUR 41 per month. We have a wholesale cost of now EUR 20, EUR 21. And now the customer service cost and other cost are about EUR 9. So all in all, it's a unitary price EBITDA of EUR 5 per customer. So it's an improvement of EUR 4 comparing to last year.

[Michaël Trabbia, CEO & Executive Director]

Yes. Just before answering the question on wholesale tariff, just to add, we have always mentioned that we wanted to reach profitability on this cable business, and that's what we are doing. Wholesale charge are only one part of the element. And Arnaud mentioned that we continue our efforts also on the operations and on the remaining cost. So this is clearly, we are in the good execution of our plan and in line with our ambition to be cash flow positive as of 2021. On the question on the fiber, so just to remind that we -- our strategy on fiber and on, I would say, the fixed infrastructure, more generally speaking, is not changing with the wholesale tariff. We have always been, and we have mentioned -- I would like to remember that since 2017, that we were ready to participate or even co-invest in the rollout of fiber in Belgium. You know that we are present in the proof-of-concept by [indiscernible] in the part of the Flanders. So it's something that we always we have always been pushy and we continue to be. So we will explore and continue to explore the opportunities here following the new announcement by some of our competitors, but not only we will look at all opportunities that are available on this fixed strategy. I would like also to remind that there is the latest topic that will also be probably reopened in the coming months. So we work on the 2 in an independent way. And we continue, and we will continue to fight on the wholesale tariff because we believe the increase that our forecasts are not justified and that we will have evidences next year that there is no significant increase in the cost by the cable players. So there is no justification to increase the wholesale price. And at the same time, we continue to be open and to work actively on fiber opportunities or order alternative to gain control on our fixed or at least part of the fixed infrastructure in Belgium.

[Operator]

Next question from David Vagman from ING.

[David Vagman, Research Analyst]

First question on the -- still -- again, the topic of the cost and the cost reduction in Q2. Could you please break down or give us a rough idea of the rough -- the cost reduction you had in Q2, making a split between, let's say, the COVID part and the non-COVID-related cost reduction? And then related to this, what kind of cost reduction should we expect in the, let's say, in the coming quarters? And I guess also related to that, how should we extrapolate the profitability of the cable business in -- that we saw in Q2, so in H2?

[Michaël Trabbia, CEO & Executive Director]

I will let Arnaud answer this question. Just to be clear on the fact that what you see on the EBITDAaL performance is the result of the trend and the good trend in our business in the company. So I will let Arnaud explain a little bit more the detail or give you more indication about this. But more or less, what the result we had in Q2, you can see, are in line with the initial ambition we announced at EBITDAaL level.

[Arnaud Marie Julien Castille, Chief Financial Officer]

Yes. Yes, exactly. The best view, our margin is our guidance for the end of the year. So we haven't changed this guidance. And so we continue, as Michaël explained, our Bold internal transformation. So maybe to focus a little bit on the COVID -- positive COVID saving of -- we use the economical unemployment, but it is limited compare to other savings coming from our efficiency. So if we can give some figures, we can say today LIBOR, as you can see, is stable compared to 2019. And half coming from economical employment and half coming from other initiatives like the top of temps, the top of consultant and the stop of recruitment. But for the rest, mainly the other indirect costs, which are stable compared to 2019, it's exactly what we forecasted in our guidance. So I don't want to repeat what Michaël said, it's about improvement of our customer service, saving on networks -- maintenance networks. It's also a better digital sales. It's also a limitation of our advertising and promotion. So all in all, I think the best view on our margin is our guidance, and it's a huge improvement compared to 2019. So we are quite confident to achieve such an improvement.

[David Vagman, Research Analyst]

Very quick follow-up on the guidance. So the guidance remains between EUR 310 million and EUR 330 million. What are the, let's say, the big elements that would, let's say, tip the balance towards the EUR 310 million or rather the EUR 330 million, given that we are now, let's say, at midyear, end of July?

[Arnaud Marie Julien Castille, Chief Financial Officer]

Of course, it's the revenues. In terms of costs, we master. We have a very good monitoring of our revenues in terms of our cost. In terms of revenue, we don't know what will be the competition. So there is always uncertainty about the competition. It's maybe the main parameter, which can change the result for the end of the year.

[Michaël Trabbia, CEO & Executive Director]

An additional comment, David, on this topic. So you see that more or less what is impacting us is part of the roaming. Not all the roaming because we can mitigate part of it with the cost that we avoid. And we also include in our overview and in our forecast. That we might have some impact on the B2B market, in particular, with the economic crisis that might impact the overall economy and so our customers. So this is something we include in our overview now. We also include the new wholesale tariff. So all this is taken into account. And we more or less managed to mitigate those effects. That's why we are -- with our cost efforts, that's why we are able to maintain the guidance unchanged.

[Operator]

Next question from Roshan Ranjit from Deutsche Bank.

[Roshan Vijay Ranjit, Research Analyst]

Two questions from me, please. Just going back to the point on digital sales. And we saw a, I guess, slowdown in the convergent net adds number, clearly, the shops being closed. Is it possible to get a sense of what percentage of your sales are coming from the digital channels and perhaps how that compares to your peers? And where you see the investment which will put into digital channels, driving the kind of target split to, please? And secondly, is it possible to get an update on the MWings JV. I think you started operational metrics a couple of months ago. Is that going to plan? And are we still on track for those kind of OpEx and CapEx savings? Again, I appreciate it's early days, but any update would be good.

[Michaël Trabbia, CEO & Executive Director]

Thank you. So maybe I will give some comments on the digital and let Arnaud comment on the financial -- on the RAN sharing. So on the first topic on digital sales, we are not the best-in-class in digital sales. So that is why this is a focus for our transformation plan. And we believe we can certainly improve the ratio here that is probably a little bit below average and below competition. So we believe, and that's one of the focus that we can increase this level of digital sales. We have launched a new e-shop for the moment, and we continue to invest in this digital channel. We also initiate an omnichannel strategy. So for us, this is an opportunity to continue, optimize our channels and our acquisition costs. Now on MWings, I'll let Arnaud answer you on the OpEx and CapEx savings.

[Arnaud Marie Julien Castille, Chief Financial Officer]

So on MWings, we keep exactly the same figures as announced 1 year ago in terms of savings, but also in terms of enablement, in terms of one-off cost at the beginning. So I repeat those figures. It's a savings over 10 years of EUR 300 million. It's a step-by-step processes. So it will be a run rate of EUR 40 million per year. After the consolidation. And this consolidation will finish -- we will finish in 2024. So a run rate after that of EUR 40 million a year, 50% CapEx, 50% OpEx. But before that, before the full consolidation, we will be -- we will have to enable our network to support the 2 operators and that has a cost of EUR 130 million starting mainly from the beginning of 2021. There is a small delay compared to the timing of last year, mainly due to the COVID. So we will be -- we'll start the full consolidation, end of this year, beginning of next year. So the enablement will start end of this year or beginning of next year. It's EUR 130 million. Maybe first year, EUR 40 million -- EUR 50 million and EUR 40 million, EUR 40 million for the next 2 years.

[Roshan Vijay Ranjit, Research Analyst]

Okay. That's very clear. Can I just follow-up on the digitalization? What splits are we talking about? No, I don't know, is it 10% is based over a digital channel, is it 20%. Any deal you could give there would be good.

[Michaël Trabbia, CEO & Executive Director]

No in the 10% range than in the 20% range for the digital channel.

[Operator]

Next question from Emmanuel Carlier from Kempen.

[Emmanuel Carlier, Research Analyst]

Three questions. One is on the CapEx line. So if I look at 2021 CapEx, consensus is expecting a quite steep increase. Could you provide your guidance on how you look at long term CapEx? Because I have the feeling that you rather target to keep CapEx flattish also because 5G investments are quite delayed in Belgium. So it looks like it will be a more gradual investment. Then secondly, on working capital, could you clarify why working capital was quite a bit lower in H1? And then thirdly is on commercial momentum. So on the one hand, you mentioned that -- yes, that when the shops reopened, that you were back as the momentum pre the closure of the shops. On the other hand, you just announced to increase the data allowance again. So could you provide a bit more color on your thinking on these 2 elements?

[Michaël Trabbia, CEO & Executive Director]

Okay. Thank you. A few comments on the CapEx, and Arnaud may complement, and Arnaud will also answer on the working capital question. And I will then take your question on the commercial momentum. On the CapEx, it is obviously a little bit early to give guidance for 2021. So this will be done later. What we can say, obviously, is that Arnaud mentioned that the RAN sharing will impact the CapEx for 2021. Arnaud mentioned, and this is what we already announced that we would have EUR 130 million to set the RAN sharing that will be spread over the 3 coming years. So Arnaud mentioned more or less EUR 50 million in 2021 and EUR 40 million for the next 2 years. So this will obviously impact our CapEx for next year, but it is too early to give a guidance because there are also other elements that can enter into account. And then on the commercial momentum, and I will let Arnaud answer the working capital. Actually, what we said is what we said, meaning that we have been impacted quite significantly during the closure of the shops. And this also in line with the fact that our digital sales are probably not fully at the level where we would like to put them. And when the shop reopened, we saw clearly a recovery on our sales. The announcement of the data increase is not linked to any issue on commercial performance. It's something that we have planned, and that is in line also with the regular increase of the data consumption by our customer. And we believe it's the right moment to do it. I would like also to highlight the fact that, indeed, what we feel is we see the competition is also quite pushy and aggressive, and we have seen the moves by some of our competitors also that we need to take into account. But this move is not at all, something that is in reaction to the Q2 commercial momentum because once again, the recovery happened after shop reopening. Arnaud, you want to comment on working capital? Or if you want to answer...

[Emmanuel Carlier, Research Analyst]

May I interrupt on the commercial momentum question? So can you confirm then that since the shops reopens, momentum on mobile postpaid and converge the Love bundle is back at previous level? And...

[Michaël Trabbia, CEO & Executive Director]

Yes, indeed. On mobile postpaid, it is the case. On the convergent, you -- there is a small delay because you need them to have the installation and the customer there is accounted for after the installation, but we see indeed an increase again also on the convergence. Even if it has probably 1 month of delay due to the installation period. But we see that the acquisition is indeed recovering also.

[Arnaud Marie Julien Castille, Chief Financial Officer]

So yes, if I can add some information on CapEx. So we are quite confident to have a flat CapEx without the impact of the sharing at this stage. We are in -- at the end of our tender for our new -- of our supplier for our network. And we are confident the rollout of the 5G will not impact strongly our CapEx. The reason why? We can say, will be flat on CapEx without the impact of the network sharing. And this impact, as I explained, it's a one-off. For next year, plus the beginning of the savings. So it's too early to give you the right figures, but you can see, it will be, yes, a light increase of our CapEx due to the enablement of our network, but we will start also some savings, thanks to the sharing. And again, we are confident not to have a big impact of the rollout of the 5G on our CapEx -- on the full CapEx. On the working...

[Emmanuel Carlier, Research Analyst]

Do you intend to see -- yes, sorry, do you intend to see any savings already in 2021? Maybe not from the RAN sharing, but maybe from other buckets?

[Arnaud Marie Julien Castille, Chief Financial Officer]

You know the main buckets of our CapEx are IT and network. And within this network, there is a 5G. So yes, we will be able to have flat network on RAN on access, our network, but we have the rollout of the 5G. So all in all, no, we don't see savings on CapEx, but we see despite the rollout, flat CapEx. So it's quite positive. And IT, we see about the same level of CapEx it due to our current transformation, which is not finished. On working cap, the main impact on positive impact is the increase of our trade payables. And it's mainly due to a big project of reverse factoring with most of our suppliers. We put in place this restructuring end of last year, and we continue to implement this reverse factoring. So that has a big impact on our trade payable. And we continue also to improve our trade receivable and to decrease our trade receivable thanks to an improving collections of this spread receivable. As Michaël said, in our vision for the end of the year, we forecast an impact in terms of bad debt in the figures we forecasted, but it's not so significant in terms of trade receivables. So mainly an impact of our payable. We increased our payables, the delay, thanks to the reverse factoring.

[Operator]

Next question from Bart Jooris from Degroof Petercam.

[Bart Jooris, Analyst]

First on, can you give us an update on where the lawsuit regarding the VOO acquisition is now when do you expect the case on the merits to take place and a verdict on that? And then what is your ultimate goal here? Do you hope to still be able to acquire VOO? And then secondly, sorry, you already made some comments on the BIPT decision, but there was some disturbance on the line. So maybe you answered this already. But how big do you estimate the probability that the BIPT will launch a review of the wholesale tariffs next year? And at the time that the decision was announced, there were some comments in the press that you feared that you needed to increase pricing on the Love offer? What are your thoughts on this now?

[Michaël Trabbia, CEO & Executive Director]

Okay. Thank you. And the -- it's good because we also had a question on the chat on VOO, so I will answer both at the same time. So indeed, as you saw, we had full positive result on our claim and our lawsuit on the VOO acquisition by providence following the process that was followed by Nethys at that time. And the judge and the court consider that this process showed a lot of fraud signs and decided to suspend it following this. Nethys announced that they would not appeal the judgment, and they would launch a new sale process of VOO. So what I can say is that we obviously are going to look at it very carefully. As you know, last year, we have put an offer and a very good offer on the table because we believe there are a lot of complementarity between VOO and us. But it is a little bit early to comment further because we don't know yet what will be the process, what would be the scope. So we will wait for -- to understand and see how this will be done. But for sure, we will look at this very carefully, and this will be topic for Xavier and the team together with the Board to consider this new sale process. On BIPT decision, well, we clearly -- we are convinced that there is absolutely no justification to further price increase and that the evolution of cost of the cable player will only confirm this. And it's only have to look on what they say to you on their cost evolution to understand that this is probably not going to happen. So we believe that there is a solid ground for the regulators to review their decision next year. Obviously, it will be up to them to decide and to act upon this, but we believe there is a solid ground on this topic. On the price increase, clearly, our intention and our customer promise is not to do price increase, but if we are forced to do it, we will need to consider. So it's not what we would like to do. But I would say if there is unjustified price increase on the wholesale side, we will certainly consider price increase because you see that even if we are improving our financial on the cable, we are still negative. And I don't even talk about the recuperation of the past investments that we have done on this topic.

[Operator]

Next question from Ulrich Rathe from Jefferies.

[Ulrich Rathe, Senior European Telecommunications Analyst]

I have 3 questions, please. The first one is on the lower travel so impact on roaming. So far, the only figure that I've actually seen is that the wholesale revenue impact was, I think, EUR 5.8 million on 1 slide. Would you be able to break this out for the total revenue impact? Are you also the roaming out outside of Europe and also the roaming cost? Or if that's not possible, just give us the net impact on EBITDA in the quarter from the roaming in fact that would be helpful. The second question is, when you discuss this wholesale cost issue, you sort of talk about the price increase, almost like a threat to the regulator, but there is a commercial element to this as well. I mean to what extent do you think you have pricing power and continue the commercial momentum you have towards what probably you think is relevant for fixed mobile conversions in your base? I mean you almost self discussed it if this is an independent in pricing as an independent quantity. And related to that, maybe picking up an earlier question, what cable margin ultimately is possible or targeted for that matter? I mean where do you actually aim with this in the long term? And when you think about pricing, sort of your thinking around that would be pretty interesting. And my last one would be, the GO launch in over March or February. Could you comment on the take-up that you're seeing so far from that product?

[Michaël Trabbia, CEO & Executive Director]

Okay. Thank you. I will maybe let Arnaud answer first on the traffic -- the travel impact on roaming, and I will take the other questions.

[Arnaud Marie Julien Castille, Chief Financial Officer]

Okay. On roaming, you are right, to impact visitor roaming and customer roaming. On visitor roaming, as explained in our slide, it's an impact for this quarter of EUR 6 million. But of course, we have about the same savings for our customer outside Belgium, the roaming out. So the impact of this visitor roaming and roaming out, it's about 0 on our EBITDA. But we have an impact of our customer roaming, mainly the out-of-bundle because sometimes this roaming is out-of-bundle. This impact is about EUR 5 million. And of course, it is an impact directly to our EBITDA. So Q2 was without travel, maybe Q3 and Q4, we will see some troubles. But of course, we forecast a decrease of the customer roaming compared with last year.

[Michaël Trabbia, CEO & Executive Director]

Then on the other question. So do we have pricing power? And what do we want to do on the commercial? Okay. So here, once again, I would like to highlight the fact that the positioning we took on the market was one of the main reasons of our success. So it's, for us, important to keep this promise to the customer and not to do price increase if they are not justified. And we believe clearly that these are not necessary. What I want to add is that even if we have only a limited margin on the cable due to due to high wholesale price, we still have a lot of value and -- thanks to the mobile part, because in the convergence, we have the cable part, which is -- which will be difficult anyhow with the cable wholesale. But we also have the mobile value, which is very positive because we own our network. So that's the first topic. The second topic is that our strategy was to build customer base -- a strong convergent customer base. That's what we are getting to. And we are now not so far to our objective to reach 10% market share in the broadband. Having built this, we now look, and we will now have an opportunity to work on the infrastructure side. So either with acquisition of VOO with fiber investment to improve our business case on the fixed part so this will be something that will be for the coming months. And that we will -- might be also a combination of several elements. And so it's important because having built this customer base now open us a number of opportunities, and we will look at them very, very closely because this is an important topic now to further improve the margin by somehow having some ownership, even partial ownership on our fixed infrastructure. And then on the GO launch, well, I am happy to say that we have now close to 1 customer out of 5 that is already a GO customer, meaning that this portfolio was very attractive, and we managed to attract new customers as well as to migrate a number of our existing customers to these new tariffs. And we believe that thanks to the multi mobile approach, we are going to be able, even if it's a little bit early to see this for the moment because it's only the first month. We will be able to decrease the churn because what we see is that customers would take -- we have several mobile cards with us. Have a lower churn. So it's a little bit a similar effect to the convergence that we see with the multi mobile. And that's why also, we push this multi mobile approach with our GO portfolio.

[Operator]

Next question from Ruben Devos from KBC Securities.

[Ruben Devos, Senior Financial Analyst]

Yes. I've had 3 left. The first one relates to Eleven Sports and the fact that you've reached the deal with them for the build and soccer rights. You've also just issued a press release through a commercial proposition at a lower price point than the market, I believe. And I was curious whether you could share anything on the overall cost of securing these soccer rights. Considering that it's a contract for 5 seasons. And yes, it can be quite substantial. Also, if you could give any flavor on the financing and recognition of the related costs, that would be helpful as well. Secondly relates to the regulated cable wholesale tariff. I was wondering whether you could share some comments on how that may or may not affect the business case of Love Duo versus Love Trio. And more specifically, whether it makes you we think selling make it broadband services, which was, at some point, high on the agenda? And lastly, just a short one is related to cable EBITDA economics -- sorry, the cable economics. So typically, you give the EBITDAaL, but also you give the operating cash flow. I was curious whether you could disclose that figure again.

[Michaël Trabbia, CEO & Executive Director]

Okay. I will take the first question, and I will let Arnaud comment on the cable economics. So on Eleven Sports, I will not disclose, obviously, the deal we have with Eleven. It's a fair deal. And all I can say is that we don't plan to subsidize this deal. So we clearly plan to cover our costs on this deal. What I can add on the price that is indeed, at a lower price than some competition. Actually, this price is aligned with Eleven sports OTT offer, which will, by the way, will also be able to distribute to our own customers. So we will not only sell the linear TV, but we will also distribute, especially for the Love Duo customers and for our mobile customers, and this is important because, as you know, we push also for the Love Duo. So we are in a position to sell and to offer the the soccer, not only to the Los Trio customer base, but also the Love Duo and even the mobile-only customers at an attractive price. Why do -- are we able to get to this lower price it's because once again, we take an approach that is avoiding to put other channels that are maybe not as interesting and that maybe the customers are not willing to pay for. So we only -- and that's not what our competitors are doing because they include larger bundles. So that's not what we do, which allow us to have an attractive price on the Belgium soccer. Then on the wholesale and the impact on the Duo versus Trio, actually, we have been quite cautious in our impact in our assumption on the wholesale difference between Duo and Trio. So we have no issue on this topic. I would like just to highlight that 1 big part of the savings we do on Duo is linked to the TV rights that we pay around EUR 8 per month. So excluding VAT. So that's an important savings that we do here. We also saved the set of box, which is also an important saving. So that's even if we have only a limited decrease on the wholesale price from the cable operator, but still it is a decrease. We are still happy and convinced that the profitability of the Duo is at least as good and even probably better than the Trio. On the broadband only, well, this indeed is more challenging, yes, it's true because the wholesale costs then is -- cannot be recuperated with some mobile parts. So we will see and we will adapt in the coming months to see what we do. It's a little bit early to comment on this topic, but it will certainly not this -- we will certainly not be able to launch as planned. This kind of offer with this wholesale tariff. So we will adapt our marketing plan on this topic. And then on the cable economics, Arnaud?

[Arnaud Marie Julien Castille, Chief Financial Officer]

And just on financing. As you know, the cost of our financing is very limited, about EUR 2 million for S1, and we benefit, of course, from the conditions of the Orange group. So very good condition for our financing. On the cable business model, as Michaël explained, yes, Duo you is more profitable than the Trio. As you can see, end of S1, the profitability of our cable business is 18%. The EBITDA margin is 18%. So we will have, on average, with again, some improvement margin of 20%, a little bit better on Duo than on Trio, but around 20% for financing the CapEx and for the CapEx as we disclosed already, the CapEx for the do because there is no box, as Michaël explained for the Duo, the CapEx is about EUR 170 million. And for the 3 years, the CapEx is about EUR 320 million for the Board, for the acquisition and so on. So you can see is this business case is, of course, again, more profitable with the mobile part of Trio and Duo.

[Operator]

Next question from Benjamin Lyons from Crédit Suisse.

[Benjamin Lyons, Research Analyst]

I just had a quick question on the fiber build by one of your competitors that announced earlier in the year. And when can we expect a regulatory decision on the wholesale fiber pricing? And what price point would that product become a good idea for Orange Belgium to resell. And also perhaps if you could give a few comments on the bigger picture. Does Orange Belgium sort of see the telecom industry changing due to lockdown measures, more work from home, for example? And does that give you more pricing power?

[Michaël Trabbia, CEO & Executive Director]

Okay. Thank you. So on the fiber question and the regulatory decision on the fiber actually makes it not viable for the B2C to resell. We still can use it for B2B, but it's not something that we can leverage for B2C. So that's why we don't consider it for the moment. But as you know, there are some discussion on the fiber deployment and co-investment scheme or similar schemes. So that's things we are looking at. On the -- so your second question was on the unworking. And can you just repeat your second question. I'm not sure to capture everything?

[Unknown Analyst]

Yes. So just based on the whole lockdown we've seen across the world, really, more working from home, more digital usage. Do you think that's going to benefit the Belgian telecoms industry? Is going to give you more pricing power?

[Michaël Trabbia, CEO & Executive Director]

So what we see indeed is that customers have been heavily relying on their connectivity during this period. What we anticipate also is an increase in the level of unworking in Belgium globally and probably in many countries. So this is indeed an opportunity in the midterm because the customers will probably have higher needs. We, for instance, launched data boost option to -- in order to our customers to have access to higher speed, which might be probably something even more important following in this period of time. But so you can also have some impact in the security domain, in the unified -- in the communication tool for enterprises. So this is also -- this can be interesting for the business, in particular with the BKM that we acquired last year. Even if this is to be balanced by the fact that overall, the economy, the Belgian economy and probably in other countries will be affected in the short term. So we might have a small contraction of the overall economy at the same time. So it will be maybe something that that can -- that may mitigate a little bit the contraction of the economy in the short term, but that may be also positive in longer term, in the midterm and long term. This is a trend that can be helpful for our business.

[Operator]

We don't have any more questions for the moment. [Operator Instructions] We have 1 new question from Nayab Amjad from Citi.

[Nayab Amjad, Vice President]

So just 1 on the implications of the ban on Chinese vendors on Orange Belgium. Do you have Chinese vendors in your core or in other part of your network? And what will be the cost of replacing that?

[Michaël Trabbia, CEO & Executive Director]

Okay. So actually, we don't have a Chinese vendor or very, very marginally on the core network. So for us, it's not an issue. And then on the RAN and the radio access network. So we are in the process to select our vendor jointly with Proximus in order to implement the RAN sharing agreement. So, but we are confident with the current answer that we have that we will be -- we will have serious alternatives and options to be able to do this consolidation of network and be prepared for 5G without degrading our economic perspective on this topic. So just to add that as as a company as an industrial company, we have no concern on the security of the Chinese vendors. I would like to make it clear. We have worked with them for years, and we are they are trusted partners, and we have no concern about security. Now obviously, we will comply with the political and the government decision that can be taken for reasons that are not industrial and not for other topics, and that's their role to take this kind of decision. And their power to do it, and we will fully respect and comply with the decision.

[Operator]

We don't have any more question. So as we don't have any more question, I'll give you -- the word to Van Mol for the conclusion.

[Koen Van Mol, Investor Relations Officer]

Thank you very much. I would like to thank you for the participation on this conference call. Please do not hesitate to contact the IR team would there be any follow-up questions that you may have. Thank you very much for your participation, and have a nice day. Thank you.

[Operator]

Thank you ladies and gentlemen. This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.