Orange Belgium SA

XBRU:OBEL

Earnings Call Transcript 2020-Q3

[Operator]

Ladies and gentlemen, welcome to the Orange Belgium Q3 Results 2020. [Operator Instructions] I would like 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 to our Q3 2020 earnings call. Here with me are Arnaud Castille, our CFO. And I have the honor to introduce to you for the first time Xavier Pichon, our Chief Executive Officer since the 1st of September. As usual, you should have all received our financial communication this morning. It indicates all the relevant information. It's also available on our corporate website. We will start -- we will now start with an executive summary by Xavier on the main achievements of the quarter, followed by an overview of the financial results by Arnaud. A Q&A session will follow right after Xavier's and Arnaud's introductory statements. And now I will leave the floor to Xavier.

[Xavier Pichon, Chief Executive Officer]

Excellent. Good afternoon, ladies and gentlemen. Hope you well in good health and safe. Thanks. Thank you for attending this Q3 earnings call. Of course, my first one as CEO of Orange Belgium. Before I kick off by giving you a flavor of the main achievements of this third quarter, let me first tell you how privilege and honor I am either to take over from Michaël, which has made a tremendous job and, of course, to be given the opportunity to lead Orange Belgium. In the past years, Orange Belgium has successfully in a growth -- been in a growth pattern and is going through an internal ambitious transformation. Nevertheless, we clearly have the ambition to continue to grow in mobile and fixed and, of course, in convergence markets. For now, I would like to highlight some of the main events that have been taken place during the quarter. Of course, we are still impacted by the COVID-19 measures. The shops were back open but not in full capacity. The number of people that could enter the -- visit the shops was limited and a certain time and period spend on shopping also was not possible in Belgium. This partially impacted the commercial performance. Also, the limitation of customer visits impacted our business. In any case, we continue to act in a caring and responsible way towards our customers, society and to our team members as well. The quarter was also characterized with fierce competition that mainly impacted Orange Belgium in the beginning of the period. We regained commercial momentum during the second half of the quarter. One of the reasons why the upgrade of our Go Plus offer by increasing the data allowance from 5 gigabyte to 8. In addition, we also provide an additional discount of EUR 4 on the Go Plus, if it is combined with the Love Duo and Love Trio offer. We also launched a brand-new smart home portfolio to democratize domotics and help customers turn their home to a smarter and friendlier home that makes life easier. Orange Smart Home offer is structured around 3 main types of devices: the connected light bulbs, the smart cameras and smart power plugs from the manufacturer Konyks, distributed for the first time in Belgium. These come up -- these come on top of our already available Google Nest Mini, Nest Hub and Chromecast, for a full smart home experience. To put forward the advantages of connected and smart appliances, Orange Belgium also unveiled these bundled offers, which include price reduction as a loyalty advantage for new and existing customers subscribing for the 12 months period. More -- Orange Belgium announced it has now attracted more than 300,000 Love customers, reaching the 305,000 at the end of the quarter. Even though the Belgium convergence market has been for long massively dominated by incumbent players, we managed to build and offer a strong and relevant alternative with our Love portfolio. It has been built from scratch and thanks to a long-lasting work on improving the regulation for wholesale access to cable networks. Moreover, we have continuously increased the quality of our fixed services by adding new channels, offering an internet boost to reach 400 megabyte per second download speeds and also during the quarter by adding, for the first time, a highly competitive content package for fans of the Belgian football championships. You know that CSR is one of the major issue globally. It's also the case in Belgium. And for the 6th year in a row, Orange Belgium is awarded with a CO2 neutral level for its operations, meaning that every call, text, mobile data package, transmitting through its network is neutral in terms of CO2 emissions. Orange Belgium is committed to further reduce its remaining carbon emission by 30% by 2023. And to go even further, Orange Belgium activates its employees through a series of challenges to reduce everyone's ecological footprint at the office as well and at home. On the 5G side, so you know that we have selected Nokia to progressively renew the existing 2G, 3G, 4G mobile radio network for the rollout of the 5G. Nokia had been selected following a thorough competitive process based on technological, operational and financial criterias. We will fully upgrade our existing 2G/3G/4G radio network by 2023. Orange Belgium will also start rolling out 5G, depending on frequency availability and EMF restrictions in order to offer the best possible connectivity and to avoid saturation on the legacy networks for its customers, but also to allow businesses to fully take advantage of the industrial opportunities offered by the 5G. As a matter of fact yesterday, together with our industrial partners, I think you saw that we unveiled the unique application that were co-created in the port of Antwerp using Orange Belgium 5G network. The 5G network rollout by Orange Belgium is the first stand-alone network of the country, meaning it offers the real game-changing possibilities on 5G such as a very low latency and the possibility to proceed to network slicing. The use case with the Port of Antwerp, Covestro, Borealis and BASF improves security, efficiency and quality in their respective industrial processes. In terms of operational results, so we finished the quarter with positive KPIs. Our mobile contract customer base has increased with 2.6% in comparison to last year. This is 21,000 net adds during the quarter. It accounts now for more than 2.6 million customers. We continue to grow strongly in convergence and added 17,000 customers to our customer base, as said now reaching 305,000 customers with an attach rate of 1.6 mobile cards. Already 19.1%, almost 20% of our mobile customer base is convergent. 1/3 of our convergent gross adds are Love Duo customers and now account for 18% of the total convergent customers. Let me give the floor to Arnaud. Arnaud?

[Arnaud Marie Julien Castille, Chief Financial Officer]

Yes. Thank you, Xavier. Can you hear me?

[Xavier Pichon, Chief Executive Officer]

Yes.

[Arnaud Marie Julien Castille, Chief Financial Officer]

So during the quarter, we continue to work on the speed access of our Bold Inside transformation program, that is simplification, digitalization and empowerment. We continue to migrate our legacy offers to our new offer, mainly our Go offer in the B2C segment. We have launched several RFPs for the review of our IP and network contracts with partners. This quarter, we continue to focus on non-physical sales and to increase our digital interaction. We have adapted our way of working to support remote and hybrid teams. And also our HR organization has been transformed in an agile way to support the transformation and to boost internal mobility. We already bear the fruit of this transformation program during the third quarter. So when we look at the financial performance in terms of overall revenue, we decreased with 0.6% in comparison to last year and reached EUR 235.3 million. This decrease is mainly due to the decrease in wholesale revenues, COVID-19 measures still impacted this quarter and SMS interconnection and roaming decrease, partially offset by the increase of national voice. The impact of SMS interconnection revenue accounting for EUR 9.1 million, but does not impact the EBITDAaL, because we have equivalent in decreasing costs. Visitor roaming decreased by EUR 2.3 million. But for more our retail service revenue, which is a fundamental of our business continue to grow and increase by 2.6% and results in EUR 230.6 million. This is mainly because of our continued success of the convergent services, which boosted the convergent revenues by 27.6% to EUR 56.5 million. Our mobile only service revenues decreased by 3.7% in comparison to last year to EUR 149.7 million. IT & Integration services decreased by EUR 1.3 million following COVID-19 measures impacting this project.Our EBITDAaL are growing by 7.2% on a comparable basis in comparison to last year EUR 89.2 million (sic) [ EUR 89.4 million]. This is increase of retail service revenues together with an efficient cost management. Our eCapEx for the quarter increased with 6.8% to EUR 41.9 million in comparison to last year, mainly due to the increase of number of cable installation. The financial performance of our cable operation continued to improve having a positive EBITDAaL of EUR 5.3 million, an improvement in comparison to last year of EUR 3.1 million. Nevertheless, as you know, we remain cash flow negative for the quarter. Based on this result and the outlook of the last quarter, we can confirm our guidance for 2020. We foresee a slight decrease in revenues versus 2019 on a comparable basis, and EBITDAaL between EUR 310 million and EUR 330 million and a slight decrease of eCapEx, including the beginning of this year.With this, I conclude the introductory statement. We are ready for your questions. Operator, may I ask you to now open the call for Q&A.

[Operator]

[Operator Instructions] First question from Nicolas Cote-Colisson from HSBC.

[Nicolas Cote-Colisson]

Xavier, nice to see you back. I was first interested to find out what's in your CEO mission letter you got from your main shareholders. And linked to this, I'm quite keen to hear more about how you see the balancing act between value and volumes. Clearly, your revenues, our retail revenues are growing double digit. It's all fine. At the same time, you have new offers that are diluting the ARPO and wholesale costs that will increase in the coming years. So your views on that, I would be very interested indeed. And I've got a question on 5G. If we take the port of Antwerp case, it sounds great from a technical point of view, that's for sure. But have you more info to share on the profitability of such a solution could bring?

[Xavier Pichon, Chief Executive Officer]

I'm glad to see you, again, even if it's remote -- on a remote mode, but thanks a lot for your question. On your first one, what about my vision and what about the mission I received from the shareholders. I think -- so first, on the vision, it's a very -- the Belgian market is very, very interesting and promising as well, maybe on the first slide -- with the first slide -- on first slide. It's an interesting market because there are some customer behaviors and some positional market coming from the other that are very interesting from a value point of view. And I said that the customer are very sensitive to CSR aspects. And of course, they need much more data allowances and packages. So that's very interesting to see so and promising as well because, of course, you know that you're part of the Orange Group. And of course, we know how to cope with this kind of customer behaviors and so on. So I think it's a really interesting market. And when I see the peers as well, interesting to see that we are the only one that's be part of a group with a large footprint, so that's very promising. On the mission I have received from the shareholders, I think it's clear. It's first to continue the job that has -- tremendous job that has been done by Michaël and the team, and then to continue to expand the value of the company and then to, of course, look at all the opportunities we might have in the market, maybe to increase the profitability and the cash generation as well. So it's very simple. And on your last question, maybe for the port of Antwerp proof of concept. I think it's a bit early to technically and, of course, precisely answer your question. I think, first, we need to -- you know the 5G context in Europe, broadly speaking, and then in Belgium as well. So what we intend to do with 5G on the B2B market is to say, okay, we do have some technical capabilities, we do have some knowledge of that, and then we'll have and maybe the companies and, of course, the region and the country nationwide to say, okay, guys, we do have some solutions, and 5G could be a real, better solution for that. And we are actually -- have decided to raise this -- to set up this proof of concept, because we want to test everything on that. We want to test the solution, the technical solutions. We want to test how the customers of this company will respond on these new services. And of course, we want to test the business model as well. I think there are 1 or 2 tests and proof of concept that have been built in the past, I think, in Singapore and Hong Kong ports. And I think we aim to do the same at the end and to test what could be our capabilities for the future. What is sure that we see B2B one of the main interesting areas when we will be able or might be able to monetize the 5G at the end.

[Operator]

Next question from David Vagman from ING.

[David Vagman, Research Analyst]

First a question, I think, for Xavier. Welcome to Belgium. Could you come back on your recent press interviews and your ambition to reach a 25% market share in fixed and also the intention to launch a broadband-only offer as I understand it in 2021? What are the commercial, strategic and financial implication? And what could be the time line? Should we expect a big strategic announcement? Would it be through organic external growth or acquiring VOO, for instance? Would it be through fiber? That's my first question. And then second question on the cable profitability. Could you come back on the -- that may be a question more for Arnaud -- on the quarterly evolution of the cable profitability. It dropped in Q3 despite the lower cable rate. Could you explain the dynamic here, the building blocks of the change? And also going forward, how we should think about the development of the profitability of cable in the coming quarters?

[Xavier Pichon, Chief Executive Officer]

Thanks, David. Thanks for your welcome. Your first question is very large, so I will try to give you an answer, a broader one. And then, of course, as you said, Arnaud will take the second one. So on the first one, you're right to say so, I said to the journalist a bit later -- earlier, sorry, this month that what we aim to do is to double first our market share. So depending on the numbers, we do have a single-digit market share right now so far. And then we aim to double it in the coming years, first. And then at the end, just to get the scale effect, we know well within the telco market the goal might be you have maybe the same level of market share between fixed and mobile, of course, to be in a position to play with a larger scale on the convergence. You're right to say so for -- to do this kind of improvement, we might expand a little bit our portfolio on the fixed side. That's why we have been able -- we said -- I think Michaël said that maybe a couple of months ago or some months ago saying that we intend to launch a naked broadband offer. And so we decided to do that. And this offer will be launched, as I said, and as we said this morning in the coming days. We clearly see an opportunity for expanding our footprint first. And also, it is something interesting to have a broader view on the market on the fixed. So we will disclose and reveal this offer in the coming days as I said. And you will see that we do have clear ambition on that part of the market, but also as a whole on the fixed market. What we intend to do for the future, first, we'd like to say, okay, we need to provide the best experience in terms of customer, maybe, yes, in terms of customer point of view. So we'd like to improve our quality of services and our portfolio in terms of product and services on the fixed area. Then the second question is to say, okay, we might, and we would like to improve our financials on the fixed area. So that's why you are asking the second question on the cable EBITDA and cash generation. And last but not least, if it's possible, and depending on the conditions would like to own part of the network or our network on the fixed side. And we have already said that in the past. So that's why to get the scale effect on the fixed side, we would like to expand our market share. And of course, it could be interesting to extend the ratio of convergence. We said this morning and a couple of minutes ago that this ratio is 19%. You know that in some Orange countries, this ratio is raising from 50% to 60% some time. So of course, the goal is not to reach this 50% or 60%, that there is a gap, of course, a room of maneuver between our current 19% and what we can see abroad with this 50%. So in a nutshell, our ambition on the fix is to play with all the ingredients to build the best recipe and to be in a position to be much more than, I would say, follower in this market. On the question number 2, Arnaud?

[Arnaud Marie Julien Castille, Chief Financial Officer]

Yes. Yes, I can take it. So David, on the -- yes, David, on the accountability of the cable and the cash, you are right. The [indiscernible] value, the cash generation in Q2 was slightly negative, about minus EUR 1 million. And for Q3, it's minus EUR 4.5 million. So yes, there is a decrease, explained by different parameters. The EBITDAaL, it's this quarter 5.3. It was last quarter 6.4. It's mainly explained by the one-off due to the new contract -- content contract with Eleven Sports. As you know, we have now the Jupiler on our offer. So we paid a one-off in Q3 compared to Q2. So it's the main explanation for the EBITDA. As you can see, there is a gap about EUR 1 million between Q2 and Q3. In terms of cash, there is a big gap of cash and because it's minus 4.5 compared to minus 1. It's mainly installation, because we started again full speed installation. So there is a cost of acquisition on this minus EUR 4.5 million, plus some stock, some inventory to be ready for the end of year in terms of boxes. So we continue to improve the business case of the cable, as Xavier explained, it's the value business -- I mean the profitability issue, as you know, for a long time. So today, if I give you the math in terms of the profitability, unitary profitability per customer, in terms of EBITDA, it's EUR 2 for -- at the end of Q3, EUR 2 EBITDA per customer per month. So it's is low, and we continue to invest EUR 340 for the cost of acquisition of a new customer. As you know, this CapEx will decrease, thanks to new boxes and new processes. But of course, this is a wholesale impact [Technical Difficulty]. And so for next year, just to give you a flavor on the profitability of our business. We explained we will be maybe cash positive next year. So today, it will maybe be the case, but we -- it depends, of course, on the volume. So if we increase the volume, it could be slightly negative. As an example, if we launch the legal -- the Internet-only offer without mobile, of course, the profitability is lower than a full convergence with mobile offer. But as we have already explained, we need to be very present on this segment. And as you know, I'm not going to stop this business due to profitability. We continue to increase the profitability, and we need to have volume on this -- on the business.

[Operator]

Next question from Roshan Ranjit from Deutsche Bank.

[Roshan Vijay Ranjit, Research Analyst]

Good luck in the new role, Xavier, from me. Two questions from my side, and this maybe going back to the previous question. We've seen a good EBITDAaL trend again, this quarter. And I think, as you mentioned, Arnaud, it was impacted by the expansion of the broadcast rights. I assume that would carry on into Q4 as well. It's probably slightly higher than, I think, the EUR 1 million, which you mentioned impact in this quarter. But on the underlying cost reduction, are you seeing additional savings to kind of mitigate or offset the expense on the football rights? Because I think when you issued that guidance at the beginning of the year, correct me if I'm wrong, there wasn't that component in your cost base for the football rights. And secondly, just moving on to Fluvius. It's possible to get an update on the 15,000 or so fiber home trials, which you are doing, I think, a couple of years ago in Flanders? Clearly, Fluvius seems to be a bit more proactive now. I think you guys continue to have ongoing discussions. Is there anything you can say is that -- if that trial has expanded? Or if you're moving into different areas or if things have stopped?

[Arnaud Marie Julien Castille, Chief Financial Officer]

Maybe I'm going to take the first one. So on EBITDAaL, yes, there is the impact of football, but it's limited when compared to our cost. It's, of course, important when we -- if you look at the cable P&L, that's our fourth P&L, of course, we will mitigate with additional savings. And as we explained in our introduction, we continue to have this guidance, which is quite an impressive growth compared to last year between EUR 310 million and EUR 330 million.To be honest, but it depends, of course, the current situation, the COVID impact and so on, we believe maybe to be more in the high of our guidance than the lower of our guidance. So yes, we continue to have our transformation plan and having quite a positive impact of this transformation plan. So we are very confident in our capacity to deliver our guidance despite the football. And it's an investment for the future, of course.

[Xavier Pichon, Chief Executive Officer]

Thank you, Arnaud. Then on your second question, I think you're right. You say that -- so we've started a proof of concept, another one or first one with Fluvius in Flanders. And you know we do have 4 cities. So we are currently following and very closely following this experience, of course, because it's very important to us to know how the rollout is evolving or the customer behaviors that are evolving as well. We are quite happy with that at the end. Fluvius is a very efficient utility company and they do a great job. And we are currently starting to connect the first client within this proof of concept. I'm not sure that we can disclose any precise figures on that, maybe the offer mix, the ARPO and so on. But we are really closely looking at this proof of concept, and they are very interesting, maybe insight coming from that from the first reaction with the client. You know that we do not have the whole value proposition in this proof of concept. The offer is not exactly the same than the cable one. But it's a very promising so far trial. So of course, we will count on this trial to see how could be our future value proposition for FTTH, of course.

[Roshan Vijay Ranjit, Research Analyst]

Okay. That's clear. If I could just follow up. So you said that you're starting to connect customers now. Is that still within the kind of 15,000 footprint? Or is there scope to expand that 15,000 or has it expanded?

[Xavier Pichon, Chief Executive Officer]

No, no, it is inside this current 15,000 footprint, of course.

[Operator]

Next question from Paul Sidney from Crédit Suisse.

[Paul Sidney, Research Analyst]

Just a couple of questions, please. Firstly, on cable wholesale rates. Given that the rising in tiered cable wholesale rates as we look forward, how do you think about potentially raising your retail prices to compensate and may actually that be an opportunity for you to raise prices and make the whole converge proposition more profitable? And then secondly, just on the Belgian fourth license, the debate seems to have been caught up in the political grid lock. But obviously, this question just doesn't go away. I was just wondering, what are your latest comments and what is Orange Belgium hearing on the 5G spectrum auction in terms of timing and the potential for spectrum to be reserved for a fourth entrant?

[Xavier Pichon, Chief Executive Officer]

On the first one, Paul, I think you're right. Of course, you know the answer. We are in a kind of schizophrenic attitude with that, including potentially, of course, the fact that we don't want actually to want to raise -- we don't want to raise our tariffs. It's a part of our differentiation within the Belgium market. It's part of our DNA. So it's not the solution we would like to enter and play with at the end. So of course, we are -- how can I say that? But a bit disappointed with the glide path we've been -- we see now coming from the regulator in Belgium with the cable, especially and specifically on the fact that the increase will be noted on the 400 megabyte and the high speed, which is not really in favor of the -- what the customer will need in the future or are already needing in the market. So yes, we'll be in that situation to cope with that, to manage this at the end, and Arnaud told you what about the cost structure efforts we will -- we are and we will continue to develop. But at the end, yes, we are not specifically happy with that and the wholesale tariff in the future. And of course, starting 2021, we'll have to cope with that. At the end, that's the reason why we are looking for the FTTH assumption and potential project in Belgium and Flanders, of course, and Wallonia in Brussels. So you know that we are negotiating with Proximus and, of course, Fluvius as well. That's the story at the end. We have -- we do have to cope with the current situation. Of course, we'll have to cope with that in 2021. That's not in our DNA to raise the tariff. I know that the others are doing so, starting in Telenet, I think, in the coming months. But at the end, yes, we will cope with that, and we will try to make the best compromise between being one of the best home and cable provider in the country. And then maybe, of course, to see how we could benefit from a swap, a technological swap from cable to FTTH in the future asset. And sorry, on your second question on the fourth entrant and then the link with the 5G. So you're right to say so as well. So depending -- we are -- first, we are very happy to -- government has been set up recently in Belgium, then this is, of course, the key point for us to get some time line and time frame on the 5G auction. Actually, we don't know when we will -- this option will come up. Maybe -- yes, I saw some article saying we need 9 months to 1 year to organize that -- this, sorry. And then we'll see, okay, the fourth entrant. Our view is that the market is, of course, well animated, I think historically. And yes, what we can see in the market is a lot of promotions on the onset, a lot of tariff and much more allowance on data. So we feel that the market is very animated in Belgium, and there is no space technically and maybe financially for fourth entrant in this market. That's our position.

[Operator]

Next question from Emmanuel Carlier from Kempen.

[Emmanuel Carlier, Research Analyst]

Yes. Three questions, please. The first one is on your commercial momentum. So you mentioned that in the second half of Q3, the momentum was better. Could you give some indication how Q4 has started and what you're kind of expecting? In addition to that, also curious to hear from who you're mainly gaining market share. Secondly, on mobile ARPO. So there, the trend improved somewhat in Q3. Is this something structural in your opinion? And then the last question is on VOO and fiber. So you mentioned that you want to gain market share. But what is your preference? Is it to acquire VOO? Or do you have a preference to buy fiber now that the wholesale rates are known? So happy to hear your views on that.

[Xavier Pichon, Chief Executive Officer]

The question number 1 and 3, and maybe I will let you the ARPO one. So on your question number 1, so for the commercial momentum, of course, we said that related to the COVID situation where shops were partly closed and, of course, there were some restrictions in terms of move. So the second part of the Q3 has provided larger, better conditions than the Q1, so the back-to-school -- I know the back-to-school period in Belgium is very important, but we had a really a very impressive commercial performance in both markets, B2B, B2C starting mid-August from the end of September. So that was very interesting and promising. For Q4, I think we can't disclose, but the Q4 issue will be much more related to COVID as well. So we, of course, the situation in Belgium and then, of course, in Europe, speaking, but in Belgium, particularly. So of course, we have been able to first adapt our policy for customers, of course, and team members. We are carrying, of course, on team members and customers necessarily. And then what I can say to you that we are cautiously optimistic on Q4 with the commercial momentum because, first, we don't know what will happen at the end. There are meetings nationwide and per region. So we don't know what will be the next move and the next policies coming up in the market.And then -- but also even if we do have a tough situation or a tougher situation in the coming weeks, okay, now we do have the experience, okay? We have adapted so far our policies. And we have also already planned the several scenarios from the current one to maybe a lockdown, okay? So we -- the plan are now on table. We know how we are and how we will cope with that. And that's why we are cautiously optimistic for Q4 commercial momentum in any case. On the market share, I think seeing what we've done on the convergence market in Q3 year-on-year and with a continuous trend, I think we are gaining market share on convergent and also on the fixed side, a bit less on the mobile. But as I said to you, we are happy with that, because this is part of our core strategy to grow on the convergence. And of course, as we said, we do have plans as well on the fixed side. On question number 2, ARPO, Arnaud?

[Arnaud Marie Julien Castille, Chief Financial Officer]

Yes. So ARPO mobile, to be honest, for us, it's quite a good result to have only a 3% decrease. You know it's at EUR 0.70. It's exactly the level of our customer roaming. So today, the customer roaming is pretty close to 0. So somewhere in a normal period of time, we struggle, our ARPO would have been stable. So it's quite good, mainly when we are looking at our competitors. We are quite happy with this ARPO mobile. Is it structural? It's always difficult to predict, depending, of course, on the competition. As Xavier said in our introduction, there is a competition adversity in the market today, of course. So we think we can keep a stable ARPO, but it depends the competition. Today, VOO, for example, and to be very clear and even Proximus is quite aggressive with their convergent offer. So we have to keep the rate and to be very cautious. But so far, yes, we're happy today maintaining our ARPO, and we can keep this one at this level. But of course, really, we don't know for next year, depending the COVID condition.

[Emmanuel Carlier, Research Analyst]

Sorry to interrupt, but the fact that Proximus and VOO are quite aggressive. Is that because you believe you're mainly gaining share from them? Or in the past, it was mainly from Telenet?

[Arnaud Marie Julien Castille, Chief Financial Officer]

No. I think VOO [indiscernible] calendar or in the next month, so maybe it's good to have good results in terms of commercial. So we see an aggressivity coming maybe from this point. I don't know exactly. But no, today, it's true, they are -- Proximus and VOO, they are no [indiscernible] the past, as we explained, we attract customers from Telenet, from VOO, from Proximus because our offer being at the high price, returned that offer. As you know, we have returned VOO -- again VOO to Telenet and Proximus, but it's positioning very tight. And so by the past, we haven't seen, experienced a difference between the other operators. Today, right, today, VOO is quite aggressive and Proximus a little bit also. So it's healthier.

[Xavier Pichon, Chief Executive Officer]

And then on your question number 3, so VOO and fiber, what do you prefer? I think as we have said -- so maybe to wrap up. So what we said, the first goal is to improve, expand and differentiate our positioning in terms of customer proposition and benefits. So this is the first goal. The second goal is to improve our P&L and cash generation on the fixed side. Also, of course, on the mobile, but related to the question on the fixed. And then the last one is on our infrastructure to improve our enterprise value and multiples, so related to these ambitions and this levels of ambitions. I think from the moment that the Board of Wallonia takes the decision to start a new process for a transaction of the sale of VOO, and we have already said that, we will look very closely the different conditions for such. And depending on these conditions, could be the best options, but we don't know actually. So what we are currently doing is having all the options on the table and have, of course, a close look on all of them. So we don't know yet what will be the best solution and a choice, but what is sure that we will make the best choice for the Orange Belgium shareholders.

[Emmanuel Carlier, Research Analyst]

And is the fiber expansion in Wallonia not having an impact on the valuation?

[Xavier Pichon, Chief Executive Officer]

I think every parameter has of course an impact, okay? The same in Flanders, of course, in Brussels as well. So we'll put all the parameters in the model at the end. And what I can assure you that we'll choose the best scenario for, of course, the shareholders of our Orange Belgium.

[Operator]

Next question from Ruben Devos from KBC Securities.

[Ruben Devos, Senior Financial Analyst]

I've got 2 questions. First one relates to -- and I have to follow up with the cable wholesale at first. I think in the press release, you mentioned that the wholesale charges may increase over time up to 25%. Can you just talk a bit about how you could potentially compensate for that cost increase? But I was curious whether you could give some insight on what sort of scenario such an increase would pan out? What needs to happen, let's say, for you to pay those tariffs? Or what time frame are we talking? That's the first question. And the second one is a more broader question. Just regarding the 5G rollout and the associated investment spend. I was curious how you're thinking about the road map for the next few years. There are many themes that relate to it today, the emission norms in Brussels, mobile network sharing, selection of 5G vendors, spectrum auction. So yes, could you talk a bit about these various topics and maybe talk a bit more about which one is highest in the agenda?

[Xavier Pichon, Chief Executive Officer]

Yes, thanks a lot. Ruben, so on your first -- sorry, I have made my -- sorry, on the cable -- on your first question, I think we've already answered the question at the end. We have to cope and to manage a bit schizophrenic mood. If we want to increase our market share, of course, we will have some CapEx, installment CapEx in our side in our balance sheet. And of course, if we want to improve the profitability, we should continue to manage the cost structures as we've done in the past, and we will. So we need to cope with that at the same time, and we will cope with that at the same time. On your second question on the 5G rollout, yes, that's -- yes, something very interesting in the Belgium market. Nicolas, at the beginning of the session was asked me about the feeling and the mission, I think 5G is a very, very -- is a very interesting case. And Europe, broadly speaking, is a bit late on that topic compared to other countries. You know that I have traveled a lot before COVID, overseas. And then I have seen -- I saw a lot of 5G launches and first results, very interesting. But in Europe, we are a bit late. And in Belgium, related to what you said, which is EMF spectrum auction time line and time frame, I think we do have time at the end to prepare our rollout technically. You know that we started our network sharing operations with Proximus through the JV. We have freshly selected our supplier on the hand. We need next year to choose our core supplier as well, so we do have a lot of steps in our scaling of time line. What we have done on the B2B side with the port of Antwerp proof of concept is very, very important in our view. First, to position Orange as interesting player and valuable player for 5G, very innovative one. And then to see what could be the market evolutions in terms of offers, portfolio and then positioning from the peers. So we are closely -- it's like the cable, okay? But on the 5G, we are working with the group as well. And you know that within the Orange footprint, some countries are ahead of us in terms of delivery launches starting with Orange Luxembourg. So we will monitor all these topics to make sure that 5G will be a success for our end and a valuable success at the end.

[Ruben Devos, Senior Financial Analyst]

Okay. But just to come back on the first question, maybe I didn't phrase my question too well. But it looks like you're quite specific, right? You say it could increase over time up to 25%, and that makes me curious what would be the parameters, let's say, that would drive that up to that 25%? And over what time frame are we talking about? Is it like within 5 years or even more? It's quite sizable that's why I'll just follow up with you.

[Xavier Pichon, Chief Executive Officer]

So what we get -- what we aim to do in terms of market share is to double first our market share in the coming years. So depending on the numbers you have in your model, I don't know what it is, but first, we aim to double our market share. And there at the end, in terms of financial and business modeling, we aim to get the same market share either on mobile and on fixed. That's why I'm talking about 25%. So 25% is not in a short time view. It's not a short-term view. It's a much more long-term view. But in the coming years, we aim to double our market share on the fixed side. And we'll be helped by what we are doing right now. You know that we have launched some Smart Home products. We are signed with very positive outcomes the football rights. As I said this morning, we will launch in the coming days our naked offer on cable. And then, of course, there are some FTTH projects, we've talked a lot during this call, coming up. So that's why we intend to double first our market share in the coming years. And then at the end, goal is to have the same market share level on both sides, but it's not a short-term issue.

[Arnaud Marie Julien Castille, Chief Financial Officer]

Maybe Xavier, if I may, Ruben, when we speak about a 25% increase in retail price, it's not for tomorrow. Today, the wholesale price is about on average at 18%, and 25% is for 400 megabyte per second. So we are far towards all our customers based on this level of speed. So don't worry for next year. It's not in next year. We will have on average this type of customers. So it's long term, yes, long term. The cost can increase by 25%, but it's a long-term view. It's not for the coming year, not for next year and to next year.

[Xavier Pichon, Chief Executive Officer]

And sorry, Ruben, because I think 25%, I thought that your question on 25% was related to the market share, so sorry for that. But I haven't said for the market share and then Arnaud has just answered for the wholesale tariff. So we provided both answers to the [indiscernible] and the same 25%.

[Operator]

Next question from Ulrich Rathe from Jefferies.

[Ulrich Rathe, Senior European Telecommunications Analyst]

I have 3 quick ones, please, if that's all right. The first one is, could you say how much the unit cost, the unitary cost for cable? And then maybe, the wholesale cost paid to the network operator has changed between the second quarter and the third quarter under the new regulation?Second question is, when you link your -- in the discussion, the FTTH interest that you might have to the cable wholesale prices, aren't you just confirming the regulatory agenda? My understanding is the regulator did raise the prices ultimately on the argument that this would sort of make -- remove room for arbitrages in the market and force operators to sort of monitor the investment. Now you're essentially doing that. So what's your argument to the regulator then when you discuss cable wholesale price? Because it seems to me that we're just doing exactly what they intended you to do. And the last question is the comparable cost in the third quarter were down, I think, overall cost down 3% year-on-year versus minus 13% in the second quarter. What would you say is sort of the sustainable rate? Are you willing to give us some sense of what a normal number could look like there?

[Xavier Pichon, Chief Executive Officer]

Maybe, Arnaud -- sorry, maybe Arnaud, you should take the first one on the wholesale cost change? Could you do?

[Arnaud Marie Julien Castille, Chief Financial Officer]

Yes. Yes, of course, and this is for third one. On the retail cost is quite simple, we disclosed the Q2 price. It was about EUR 21 per month per customer on average. And in Q3, it's about EUR 19 per month per customer. So it's a new regulation. So on average, it's EUR 19 per month.

[Xavier Pichon, Chief Executive Officer]

Thanks, Arnaud.

[Arnaud Marie Julien Castille, Chief Financial Officer]

Yes, the second one, Xavier?

[Xavier Pichon, Chief Executive Officer]

Okay. So on the -- on your point number 2, I think, yes, that's the story at the end, okay? That's why we're not really happy with the regulation we've been provided by the regulator. As Arnaud said, as we said previously, the glide path is increasing, first, starting 2021. And then there is a second effect, which is the speed. And what we would like to get, as I told you, is the best experience and the best customer benefits within our fixed portfolio. So that's why we have to manage this situation, a bit schizophrenic between both because, of course, we aim to gross -- to grow, sorry, in terms of market penetration, in terms of net debt and market share. And at the same time, okay, we need to compensate part of this raise on the wholesale tariff by a very huge and precise cost management. That's why I said that we will do both at the same time. It's not easy, specifically if we are gaining market share and our offer -- portfolio of offers is meeting the customer demand at the end, but we'll do so, okay? It's hard to play, and it will be hard to play if we are successful, commercially speaking. But we'll do so. And on the other hand, it's a kind of chicken and egg issue because, of course, that's why we are looking for improvement in our P&L cash generation and also, of course, technical areas. That's why we're looking for moving or, I would say, having both technical networks, cable, HFC and FTTH, NBN with the best mix in terms of value proposition and then, of course, on the financial side. So we'll manage both situations. And that's why we are closely looking at FTTH development for the future.

[Arnaud Marie Julien Castille, Chief Financial Officer]

On the cost and the decrease of 3%, yes, I think it's sustainable. I told you just before we think we will be without new COVID bad conditions and maybe in the high of our guidance. So at this stage, it's an EBITDA growing by 7%. So if we have the same growth at the end of the year, it is, yes, we can continue to decrease our OpEx. It's a little bit early to speak about the next year. But we think, yes, we can again increase our margin a little bit. Of course, the business case of the cable doesn't help because it's just cash positive. But far, the margin in cable is far from the margin on mobile. But yes, thanks to transformation plan, we can still increase our margins looking forward. But it's a little bit too early to give you more precise figures. But yes, till the end of the year, we're going to continue to increase our margin.

[Ulrich Rathe, Senior European Telecommunications Analyst]

That's great. Can I just follow up on your second question please -- your second answer, please, to the second question. Maybe I didn't frame it quite clearly. But my main point was that by looking at FTTH, essentially giving the regulator what they wanted when they made the glide path works for you than initially, right, than initially planned. So what's your argument to the regulator then about the wholesale prices and cable? I mean, how can you go back and tell them this is the wrong decision because they essentially get what they want, which is more fiber investment and to a player like Orange, looking more seriously into fine investments rather than just using existing network for wholesale. I'm just wondering how you pitch that to the regulator.

[Xavier Pichon, Chief Executive Officer]

Yes. Honestly, I think I'm so sorry, but I think you're right. You had the question. That's a very, very interesting question, of course. But I think the mood we do have now is say, okay, we do have the glide path. There are some things remarkable in this glide path, and I talked about the fact that the price will increase starting 2021, that the speed will be less considered or with a less valuable point of view from the customers because, of course, if the speed of 400 megawatts and more are increasing much more than the basic one, of course, it's naturally customer-centric view, so okay, fair enough. So we'll see that. Of course, we have discussions with the regulator. But I think the -- there is yes, there is no -- we need to fight on both fronts. It's something interesting to discuss with the regulator, of course, but there is another thing which is interesting as well, which is to say, okay, guys, we'll have to cope with that. How to do all the things at the same time? We have room for improvement in our side, of course. And then we try to do so. We'll try to improve our cost structure on the fixed OpEx and CapEx as well. Could be something interested in saying with -- not only with the regulator on the OpEx side, but also with the other peers, the network suppliers, the cable one, saying, "Hey, guys, we do some work for you, so what could be the next business model to discuss with you?" So -- and of course, as Arnaud said, we are through our transformation program managing the cost structure. So everything is not 100% on the regulatory side, okay? So maybe there are some things on that side, and we'll cope with that. But on the other hand, there are work to do in our hands. And of course, we are doing so, and we will continue to do so. We are very, very, very sensible to the cost and to the cash out at Orange Belgium for years. And we'll continue to be very, very sensitive and sensible with that. So -- but that's the situation. That's a tricky situation, but we will manage it.

[Operator]

We don't have any more question or comment [Operator Instructions] Looks like we don't have any more question. Back to you for the conclusion.

[Koen Van Mol, Investor Relations Officer]

Thank you, operator. I would like to thank you for your participation in this analyst call. If you would have any more further questions, please do not hesitate to contact the IR team, and we will come back to you. Thank you very much, and have a nice day.

[Operator]

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