Rogers Communications Inc Q4 FY2024 Earnings Call

Thank you for your patience. This is the conference operator. Welcome to the Rogers Communications, Inc. Fourth Quarter 2024 Results Conference Call. Please note that all participants are in listen-only mode and the conference is being recorded. After the presentation, we will have a question-and-answer session. I will now hand the conference over to Paul Carpino, Vice President of Investor Relations at Rogers Communications. Please proceed, Mr. Carpino.

Thank you, Galeene and good morning everyone and thank you for joining us. Today I'm here with President and Chief Executive Officer, Tony Staffieri; and our Chief Financial Officer, Glenn Brandt. Today's discussion will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2023 annual report regarding the various factors, assumptions and risks that could cause our actual results to differ. With that let me turn the call over to Tony.

Thank you, Paul and good morning, everyone. I'm pleased to report that we continued to deliver industry-leading results in a highly competitive fourth quarter. Q4 caps our third straight year of delivering results that lead the industry. In 2024, we attracted more subscribers than any of our competitors, adding a combined 623,000 wireless and Internet net additions. More Canadians continue to choose Rogers over any other carrier. We delivered the highest wireless margins, the highest cable margins, and stable ARPU. We also delivered the best service revenue and adjusted EBITDA growth in the industry and grew free cash flow by 26%. As it relates to the fourth quarter, the environment remained very competitive and we continue to execute with discipline. It's clear, our team has led the industry by balancing subscriber growth with financial performance. Wireless service revenue was up 2%. Adjusted EBITDA grew by 6% and we added 95,000 net postpaid and prepaid phone subscribers. While this is down year-on-year, this was due to a much smaller market size as a result of government policies to reduce the new to Canada category. Nonetheless, strong market share performance with the majority of our loading once again on our premium 5G brand. Our margin profile remained very healthy at 66% and blended ARPU remained stable at $58. Despite the competitive intensity, postpaid mobile phone churn improved to 1.53%, a good improvement over last year. In Cable, we delivered on our commitment to return to growth in the fourth quarter. And although it is only marginally positive, this is a significant milestone in our drive to grow our market share and revenue in this business. We continued to deliver strong EBITDA growth in cable and we continue to benefit from ongoing efficiency gains in retail Internet net adds, which were up 30%. Importantly, our focus on disciplined loading is evident and reflected in record margins of 59%. In Media, revenue was up 10% and adjusted EBITDA was a healthy $53 million. While the advertising market was a bit softer than anticipated in the quarter, our overall business was strong this year. This is a strong foundation for when we close on the acquisition of our competitor's stake in MLSE. Overall, I'm very pleased with our operating and financial performance in the fourth quarter and throughout 2024. We are operating in a highly competitive environment and we led our competitors in wireless and cable loading and delivered financial results that led the industry. Our strong results are underpinned by our network leadership and our innovative investments. In 2024, we were awarded Canada's most reliable networks by independent testing agencies OOMA and OpenSignal. We have made significant investments to remain Canada's largest and most reliable 5G network. And I'm pleased to report that we are now also Canada's most reliable Internet. At the same time, we advanced several industry firsts in 2024. We delivered four gigabit download and one gigabit upload speeds in an ongoing trial with DOCSIS 4.0 technology. We partnered with SenseNet to introduce wildfire detection technology to Canadian communities. We completed Canada's first national live trial of 5G network slicing and we're making meaningful progress on the launch of satellite to mobile technology. 2025 marks 40 years since Rogers launched wireless in Canada and we continue to build on this innovation leadership. We started to roll out the Rogers Xfinity suite of services to Canadians, beginning with Canada's first home Internet backup solution Rogers Xfinity Storm-Ready. And yesterday we launched Rogers Xfinity app TV, bringing together live TV and streaming services together on one platform. Overall in 2024, we delivered strong results while making meaningful progress on our long-term growth strategy. Before I turn the call over to Glenn, I want to touch on two transactions announced previously. First, we announced an agreement with Bell to purchase its 37.5% stake in Maple Leaf Sports and Entertainment. This will take our current minority interest in MLSE to a majority 75%. Expanding our ownership of MLSE is an important step to deliver long-term growth and surface additional value from our world-class sports and media assets. In December, we received clearance from the Competition Bureau and we are now awaiting league and CRTC approvals. Second, we announced an innovative first-of-its-kind transaction to Canada to raise $7 billion through a structured equity investment for the sale of a minority stake in part of our wireless backhaul infrastructure. This transaction is reflective of our focus to delever and further strengthen our investment-grade balance sheet. We continue to work on definitive agreements and we will provide a more fulsome update at the appropriate time. Finally, let me touch on our 2025 outlook. In 2025, we expect markets to remain competitive and expect growth in wireless to continue to be impacted by the number of newcomers to Canada. With this backdrop, we will remain disciplined in the market and balance growth to ensure steady financial results. Our 2025 outlook reflects continued growth in service revenue, adjusted EBITDA, and free cash flow. This growth will be underpinned by approximately $4 billion in capital investments to grow our core businesses. We delivered strong operating and financial results in 2024 and remain focused on continuing this disciplined leadership in 2025. In closing, I want to thank our team for delivering these results in a competitive environment. The team's consistent disciplined execution over the past three years has set the standard for our industry. Over to you Glenn.

Thank you, Tony and good morning, everyone. Thank you for joining us. I'm pleased to report that Rogers ended 2024 with another strong quarter. Our results reflected healthy service revenue and EBITDA growth, continued strong margins and stable ARPU, all of which are characteristic of the disciplined pricing and balanced approach we have maintained in the marketplace for wireless and cable loading. Wireless service revenue was up 2% and adjusted EBITDA was up 6%. Our wireless margin was up by 250 basis points year-over-year at industry-leading levels of 66%. Through 2024, we have added 512,000 net postpaid and prepaid phone additions, leading the Canadian wireless sector for a third consecutive year. As expected, the wireless market remained highly competitive through the fourth quarter reflecting the holiday season and the lower growth environment. In the fourth quarter, Rogers delivered on its disciplined approach with 95,000 net postpaid and prepaid phone additions, down from 111,000 last year, reflecting the smaller market size. Postpaid mobile phone churn was 1.53%, a 14 basis point improvement over last year. As reflected in our prepaid loading, we used our flanker brands to effectively compete with very aggressive promotions in the marketplace. Importantly, our strong aggregate net phone additions throughout 2024 combined with our solid financial results, stable ARPU, and increased wireless margin demonstrates Rogers' emphasis to balance subscriber growth without compromising financial performance. Moving to our cable business. I am pleased to report, we met our target and returned cable revenue back to slight year-over-year growth in the fourth quarter. This is no small feat, given that we started the year at an organic revenue decline of negative 4% year-over-year. Cable adjusted EBITDA was up a healthy 5% year-over-year and our cable margin continues to reflect our focus on cost efficiency, reaching 59% for the fourth quarter, which is up 290 basis points from one year ago. Internet net additions were up by 30% year-over-year reaching 26,000 in the fourth quarter, reflecting the strength of Canada's most reliable Internet combined with the scale of our national footprint, both of which we will continue to leverage in 2025. Sustained growth in our Internet subscriber base remains critical and will continue to be underpinned by leading technology and disciplined pricing in the market. The ongoing trend for customers to adjust their video viewing preferences was reflected in our year-over-year decline of video subscribers, which was down 35,000 year-over-year. We continue to focus on efficiency initiatives to offset the impacts of this decline, which has driven a 7% decrease in operating costs this quarter compared to the prior year. This focus combined with the stabilized revenue for cable, has driven our 5% increase in cable EBITDA versus the prior year. Additionally, we are investing in the video experience for our customers, with enhanced content and capabilities. These initiatives include broader content with NBCUniversal and Warner Bros. Discovery, bringing the most watched lifestyle and entertainment content to Canadians. This along with rolling out the Rogers Xfinity suite of services will ensure our customers experience the best in entertainment today and for years to come. Finally, our sports and media revenue was up 10% and adjusted EBITDA was $53 million compared to $4 million last year. This improvement was driven by higher sports and entertainment-related revenue, including higher subscriber and other revenue, as well as some benefit from the Taylor Swift Eras Tour, Toronto concerts hosted at Rogers Center. In Q4, advertising revenue was softer than originally anticipated, which contributed to our updating of full-year consolidated service revenue growth to 7% versus the 8% low end of our guidance range, which we first provided back in February of last year. Notwithstanding the lighter advertising revenue, our media business delivered strong results in Q4 and for the full year, with full-year revenue and adjusted EBITDA growth of 6% and 9%, respectively. As we look to 2025, we enter the year with a very strong underlying media and sports business even before completing the purchase of the additional 37.5% stake in MLSE. On a consolidated level, total service revenue was up 2% in Q4 and adjusted EBITDA was up 9%. These results reflect the strong performance and efficiency efforts across all three of our businesses. As a result, Rogers delivered consolidated margins of 46% in the fourth quarter, which is up 250 basis points from the prior year. Capital expenditures for the quarter were $1 billion, reflecting our ongoing investment coast-to-coast in our Canadian wireless and wireline networks. Free cash flow was also very strong at $0.9 billion, reflecting a 7% increase year-over-year. Turning to the balance sheet at year-end. We had $4.8 billion of available liquidity, comprised of $900 million in cash and short-term deposits on hand and $3.5 billion available under our bank credit facilities. Our weighted average cost of all borrowings was 4.6% and our weighted average term to maturity was 10 years. We ended the year with a debt leverage ratio of 4.5 times. This is below our previously targeted level of achieving 4.2 times by year-end, which was primarily impacted by lower service revenue and adjusted EBITDA, as well as slower-than-expected progress on asset sales originally anticipated in the 2024 outlook. As you recall last quarter, we announced that we entered into a non-binding term sheet with a leading global financial investor for a proposed $7 billion structured equity investment. The equity investment, if completed, would result in the investor acquiring a minority stake in a subsidiary that will own a portion of our wireless backhaul transport infrastructure with Rogers continuing to maintain operational control. Substantially all of the net proceeds are expected to be used to reduce debt and further strengthen our balance sheet. As an update, we continue to consider, evaluate, and work on definitive agreements with respect to the proposed equity investment. Completion remains subject to entering into binding definitive documentation with the investor. Please note that, as we are in the midst of this process, I won't be providing any further commentary nor update on this transaction during this call. And finally, we continue to move forward on our agreement to buy the 37.5% additional ownership stake in MLSE for $4.7 billion. Rogers will pursue the appropriate funding options for this transaction, aligned with maintaining our investment-grade balance sheet, including among other options raising an equity investment in our Sports and Media holdings. Importantly, and just to be clear, we are not considering issuing RCI common shares to fund this purchase. For our 2025 outlook based on our current economic assumptions, we anticipate single-digit growth for total service revenue and adjusted EBITDA, strong free cash flow, and continued investment in our networks coast-to-coast across Canada. We anticipate the environment for our businesses to remain competitive in the coming year with continued moderating wireless subscriber growth versus 2024 as Canada's immigration and foreign student levels decline. We anticipate total service revenue and adjusted EBITDA growth both in the range of 0% to 3%, capital expenditures of $3.8 billion to $4.0 billion, and free cash flow of $3.0 billion to $3.2 billion. I will also highlight that this guidance excludes any impacts associated with our pending MLSE transaction. 2024 has been a very busy and competitive year and Rogers outperformed its peers in terms of financial performance and disciplined wireless and cable subscriber growth. Our teams have worked tirelessly to execute effectively on our core businesses while also moving forward on our longer-term priorities. This has included integrating the Rogers and Shaw operations and driving growth in Canada across all of our core assets, while remaining focused on driving down leverage. These are the priorities Rogers has consistently executed against and remains committed to. Tony and I are very proud of the dedication and commitment of our entire team of Rogers' employees. Together against the backdrop of a highly competitive marketplace, we have once again delivered sector-leading operating and financial performance in 2024 for the third consecutive year. And we have done so while investing in bringing industry-leading technology, innovation, and world-class entertainment to Canadians, and the best is yet to come. Thank you for your time this morning. And with that, Galene, may we please commence with questions and answers. Thank you.

Thank you. We will now begin the question-and-answer session. Our first question is from Drew McReynolds with RBC. Please go ahead.

Thank you very much, and good morning. I have two questions. First, regarding the service revenue growth guidance for 2025, could you elaborate on the assumptions related to the volume aspect for that year? We recognize that population growth is slowing. I'm interested in your expectations for this and how it may affect both wireless and cable. Second, Glenn, regarding the balance sheet, while I understand you won’t go into detail about the structured equity financing proposal, could you share what alternatives you might consider if that doesn't happen, particularly in terms of managing the balance sheet to meet investment-grade ratings and targeted leverage by the end of the year? Thank you.

Good morning, Drew, and thanks for the questions. I'll start with the volume one, and then Glenn will touch on your balance sheet question. In terms of size of market as we look to 2025, it would be helpful to give you our perspective on 2024 and in particular exiting the market in the fourth quarter. What we saw in terms of net adds, market size was probably down our estimate between 25% and 30% year-on-year, notwithstanding the market continues to grow through penetration and a little bit of population growth. For the full year 2024, size of market, we estimate grew just over 4%, down from over 5% the year before. And we saw a progressive steady decline throughout each of the quarters. As we look to 2025, our estimate is the market is going to grow somewhere in the range of about 3%. We continue to see good penetration gains, second handsets, and we see good potential for growth on that side of it. And so market growing at 3%, us continuing to over-index on market share is something we expect to deliver on this year. On the cable side, as we look to that market, you would have seen that size of market grow in two respects. One is homes passed. And as construction volumes and flows continue to close out in 2024, we had homes passed approaching 3% for the year. We continue to expect it to be between 2.5% and 2.8% this year. But importantly for us, particularly with the launch of our fixed wireless access product, there are an additional 6.5 million homes that is now an addressable market for us and has been. And so for us, that is a significant potential opportunity in terms of market size. So we looked at, against that market size, we looked at our expectations and our targets to obtain subscriber share in both wireless and cable. And putting those together with solid ARPU performance, that's how we came up with the revenue ranges in our guidance.

And then, Drew, with respect to your question on our balance sheet and our commitment to maintaining our investment-grade ratings, and that remains an absolute priority for us. And you've seen that. I'm not going to guide or speculate or pre-announce our intentions on our potential or prospective capital raises. But I would emphasize we have several options open to us, and I'll leave it at that. But then just repeat, we are absolutely focused and committed to maintaining our investment-grade ratings.

Okay. Thanks a lot.

Thank you, Drew, next question please.

Great. Thank you. Two questions. One on the wireless side. Can you characterize maybe the competitive environment post the holiday season? 1Q used to be a slower activity period in the past. Are we seeing a little bit more return to a normal trend here? And if you would expect the churn improvement to continue? And second question on CapEx. Can you provide more color on the CapEx drivers this year? Should we assume that DOCSIS 4.0 upgrade would be maybe peak and CapEx starts to come down next year? Thank you.

What we saw was typical of prior years with a slowdown in mall traffic and volume. What we did see is a pullout of promotional offers as you would expect. We certainly did that and we saw that in the marketplace as well. There are a few areas that our competitors continue to put out there in terms of small business offers but even that promotional pricing and tactics have slowed down as well. So, we sort of see normal course. And that's following a Q4 period that I would describe as par for the course in terms of competitive intensity and promotional offers. I wouldn't describe it as more intense or less intense than prior year as a comparator. So, a good healthy competitive environment. Our focus on churn has been and continues to yield results for us in both wireless as well as Internet. Key factor there is improvements in customer service and customer experience. It's been a focus for us particularly given we have the largest wireless base in the country. And so it's an important value-add strategy for us to do that. We've been doing and delivering on a number of initiatives to improve that and you see that coming through in the results. And our expectation is to continue to drive those churn improvements throughout 2025. And then on your question on CapEx, I'll lead and Glenn will top up. But a couple of things you should expect. Our capital program continues to focus the vast, vast majority of our capital spend is on network and network innovation. We intend to continue to lead in network performance predominantly centered around reliability that's key for the customers today. And so that's what we continue to focus on. We've been investing on the cable side in mid-split. The West is completed. We've announced that previously. We continue to work quickly in the East and we see dramatic improvements in network performance and churn frankly as we roll out the mid-split and that's a precursor to the DOCSIS 4.0 implementation which will be later this year. So, think about the DOCSIS 4.0 implementation as the less expensive part of it. So, what we what you do see in our capital investments for cable is more of the heavy lifting. But even with that, we're looking at a few hundred dollars per home passed. So, a relatively modest investment to deliver superior Internet quality in the marketplace.

I would like to add that the rollout will take several years. You won't see a large investment upfront, as it will take time to transition all the subscribers. Therefore, the spending this year will be significant, and we can consider it the most prominent.

Got it. Thank you.

Thanks Batya. Next question Galene.

Thank you very much. Following up on Drew's question about volume, it's good to have that context. If you're anticipating around 2.5% to 3% volume growth in both cable and wireless, your revenue growth guidance suggests that to reach the higher end, your average revenue per user would need to remain relatively stable. To achieve zero growth, ARPU would have to decline by 2% or 3%. Am I overlooking something in the calculations? Additionally, does this correspond with the recent price announcements we've seen from telcos and cable companies, especially with some favorable pricing adjustments in wireless this week? If those changes hold, is a 0% ARPU growth the best expectation for the full year? While the first half may indeed be a bit challenging, if your guidance is for the full year, I would like to know how you are approaching ARPU and the recent pricing changes in relation to that guidance.

Morning Vince. I'll start and Glenn will add some more detailed color. But as we set our frankly our budgets and our guidance ranges for this year, we try to take into account a number of puts and takes and come up with what we think is a fairly balanced prudent view of what we're going to deliver. And as you rightly pointed out, we're operating against a market size that continues to grow. And that's a good opportunity for us. And we expect to capture leading share in wireless and growing share on the wireline side as well. When you toggle that, some of that is potentially impacted by further government policies that could be more downside or more upside. And that one is difficult to predict for us in this political environment, what seems to be a sea of change here for the country. And then we think about and have thought about some of the broader macroeconomic factors that could impact us, including some of the recent discussions around tariffs with our U.S. neighbor. And so those are the factors that we put into our thinking in our models. We certainly have what we would describe as an ARPU playbook internally that we execute to. And our drive is as we make investments and provide more value offerings to Canadians then we look to areas where we can monetize that and you should expect that. And so I wouldn't describe zero as the best we can do. We continue to look for ways to deliver more value and improve our ARPU position. But there are headwinds as well from time to time particularly in competitive periods, in terms of our competitors looking to leverage price above other factors. We've pivoted to product differentiation and network superiority, as increasingly our lead. We'll lean on price when we need to. But that's our strategy. And so the range you see sort of takes into account all those factors.

I don't have much to add to that. We focus on our technology, the clarity of our brand, and discipline in our pricing. I appreciate your optimism regarding the potential for ARPU upside. If we identify an opportunity, we will pursue it. However, we are also prioritizing subscriber growth and maintaining our competitiveness, especially given the competitive landscape. That context helps explain the ranges you are observing.

Thanks, Glenn. Can I just clarify on CapEx too, just because we asked that question already, is there any meaningful CapEx in 2025 and would it carry into 2026 for subsidized rural projects? I think Rogers won a lot of contracts in Ontario that are probably being built out right now. I'm just wondering if you can give us investors any sense, is this some sort of temporary amount in there that rolls off at some point?

It's a long-term process. You've observed it in some of our prior years. This is part of our investment in expanding our presence, Vince. This pace will slow down as we progress through the upcoming years, with slightly more investment expected in 2025 and beyond. However, that is all included within our budget. I won't provide guidance beyond 2025, but we need to balance our investments in expanding our reach and driving subscriber growth.

Thank you.

Thank you.

Thanks, Vince. Next question, Galene?

Hi. Great. Thank you for taking my questions. Operational performance continued to be quite strong advancing at a good clip as you indicated, but markets investors don't like uncertainties related to balance sheet issues. So I understand that you can discuss specifics on the backhaul deal, but maybe I can ask a few questions around that. So first, can you decide not to close on the MLSE transaction for some reason? And is there a break fee? Is it onerous to not close on that transaction? Second, can you provide some sense as to why the backhaul deal is delayed beyond what you had initially expected? Is it a rating agency concern or just putting a final number on paper with the buyer? And third, you indicated that it could be possible to raise capital around your sports asset as a backstop. Can you help us understand how that could be set up? And I guess my question is why not do this irrespective of whether the backhaul deal closes or not just to be on the safe side? Thank you.

Maher, thanks for the question and articulating that. We've been very clear on our intent to delever the balance sheet and we have been making good solid progress on that and we'll continue to look to alternatives that give us options and that work the best for Rogers, Rogers' shareholders and our balance sheet. And we have options in doing that. So our intent and our direction of travel is clear. If you look at the constructs of our dividend payout ratio, our cash flow generation and the rate at which our free cash flow is growing, which leads the industry, we're in the best position to continue to delever organically in addition to the options that we have in terms of the balance sheet. To be clear, our intent is to close on the MLSE transaction once we receive those approvals. And we're comfortable with the ability of our funding strategy for that to work within our balance sheet and remain investment grade.

And then Maher, the only thing I would add is you've asked on the timing, the financing is a complex transaction. I am pleased with the progress. I'm not going to start predicting when we'll get to the end of the job. Again, I gave my best estimate when we announced that we had signed the non-binding terms in October. We've made some progress. We have work to do. And I'm not going to update further than that in terms of why we are where we are. I'm enthusiastic about the opportunity. I'll leave it at that. The only thing I would add is that our guidance on free cash flow reflects that transaction whether it does or doesn't come to fruition, it won't affect our guidance on free cash flow.

Great. Thank you, Maher. Next question Kelly?

Hi, good morning. It's Matt filling in for Dave. Thank you for the questions. First, I wanted to revisit the underlying assumptions of the guidance. Your comments on the anticipated market growth for wireless and cable were insightful. However, last year you indicated a goal of achieving positive top-line revenue growth by year-end, which you accomplished in Q4. What is your outlook for the coming year? How should we view the balance of revenue growth and EBITDA growth between the wireless and cable segments? Additionally, could you provide some insight into the dynamics behind your pricing expectations, particularly in wireless? As mentioned earlier, there are some pricing changes in the market, but I believe a significant factor contributing to the downward pressure you are experiencing is related to customers from two or three years ago who signed contracts in a much higher price environment and are now renewing. Even if current prices are slightly higher, they remain lower compared to when those deals were initially signed. Understanding the pressure on ARPU from those contract renewals versus the market price for new subscribers would be very helpful as we assess the future of this market. Thank you.

Thank you, Matt. On your questions around guiding between cable and wireless, we don't guide for the individual business units. You see in the update from Q4 where they are through Q4 and through 2024 on their revenue trajectories. And beyond remarking on where the market sizes are going into 2025, which you've heard, I don't have anything further to add on that. But I'm not going to give clarity around guiding in the individual BUs.

In terms of pricing dynamics, we continue to seek opportunities to deliver full value, enhance that value, and monetize effectively. Looking beyond just price, one of our key advantages was our credit card offering in the fourth quarter, which allowed customers to finance handsets over 48 months, reducing their monthly payments significantly. The uptake on this was much higher than we anticipated, reflecting the value customers see in it. Moreover, data usage is steadily increasing in the range of 30% to 50%. So, while pricing on a like-for-like basis might appear to have decreased, usage is on the rise. Customers from two to three years ago are on plans and seeking options that offer them more value. I encourage looking at our entire base rather than just focusing on a specific category. We are always focused on acquisitions and managing our customer base to provide ongoing value. As mentioned earlier, the vast majority of our growth is within the Rogers premium 5G brand, where the appeal of the 5G network combined with unlimited plans is significant for consumers. We have maintained a consistent ARPU over time, and pricing competitiveness is not new for us; we will continue to manage that as we have historically.

Great. Thank you.

Thank you, Matt. Next question Galene?

Thanks. Good morning. Tony, can you talk a little bit about the timing on MLSE when you think you can close it? And maybe just a little color on what's holding it? I mean, I assume there's nothing on the CRTC with respect to broadcast deals. You have the competition growth. So, is it just leagues that is holding you back? And then, I realize you don't want to talk about the structured equity, but how should we think of the interplay of those two deals? If structured equity is delayed or you can't get it to the finish line, how does that change how you think about MLSE? And then, just on guidance, you touched on it briefly, but just how are you thinking about the economic outlook? Because I mean, it sure seems like Canada is going to take a hit. And how is that factoring into your guidance? Thanks.

Thank you, Tim. Let me start with the MLSE approval process. Glenn will speak to the second two items that you've highlighted. But in terms of MLSE, the league approvals, it's a process and I don't want to speculate on either league or CRTC approvals, which I'll talk to in a moment. But it's a process. And so, we're going through that. We don't expect to see issues, but we're working through that. On the CRTC side, that one MLSE does own NBA TV. And so that does require CRTC approval and seems to be a little slower than we anticipated in terms of that process. I don't want to speculate on time because we're dependent on other organizations for that, but it continues to move along. We don't see issues, but we continue to go down the process.

And then Tim, on your question of whether or not that's linked to the prospective structured equity investment, those are distinctly different independent deals, independent timing, no connection whatsoever. The structured equity investment if successful obviously helps fund and strengthen our balance sheet. And so, that remains an initiative in its own right. We have ample liquidity on hand at $4.5 billion at year-end. I have ample access to liquidity through a number of different options, some immediate term, some that would take some time to implement. Very, very comfortable with our flexibility and options around all of that. So, no connection between those two. And then your question on economic outlook, the guidance reflects current economic conditions and near-term realities in the Canadian environment. It reflects where we are on population growth and the declining international student population in new to Canada segment. So it reflects those realities. I'm not going to start speculating on what might happen with respect to tariffs or otherwise. I look at where we are today and that's reflected in our determination over to others to manage the stewardship of the Canadian economy and how we respond to the international realities. I'm confident that the Canadian economy is strong and weathers these from time to time and we'll come out the other side just fine.

Thank you.

Great. Thanks, Tim. Next question, Galene?

Hi. Good morning, guys. It's Patrick speaking on behalf of Ben Swinburne. Just wanted to ask a question on cable. Is there any more updates in terms of any synergy realization which Shaw? Any outstanding buckets? What's the progress with them? And any potential margin uplift that you see? The second question I have relates to the upcoming election in Canada. Can you speak about how loading might be impacted if the conservatives win, and whether you think they will favor tighter immigration policies? Thank you.

Thank you, Patrick. On your first question, no specific update. We have proceeded further and progressed further on the integration. I've mentioned on previous calls that we've substantially worked through the people side of the integration. We have some systems work that is nearing completion. We have other systems work that is, perhaps, midpoint to getting to the end on some of the more regional type systems integration that maybe had a bit of a longer-term scale. But those are fairly minor in relative to the overall savings. I have mentioned that the largest open item on cost efficiencies and synergistic savings now really lies around some of the long-term build on our wireless cell sites with fiber backhaul versus microwave that can pull out some cost savings. We still have a significant opportunity on our media content costs, and then continued work on improved customer service and improvements around our digital offering, which can pull some of those costs out while increasing our effectiveness in serving our customers. Those would be some of the larger priorities that we're still looking at that I would put in the category, at least in part if not entirely as synergy. But from a cost synergy playbook, we've achieved $1 billion. And so, I'm not going to provide any further granularity than that. Now we're really just working on year-over-year growth.

In response to the second part of your question, Patrick, regarding immigration in the new to Canada category, we have been cautious in our thinking. Our outlook for this year is based on the information we currently have. It's challenging and uncertain to speculate on a new government and their potential policies and implementation speed. If there is any positive movement in that area, it would be beneficial for the industry and for Rogers. However, we are being careful based on our present circumstances.

Thank you, Patrick. Galeene, we have time for two more questions, please.

Good morning. Thanks for taking my question. I wanted to talk a little bit about the price action that has been announced by your competitors or maybe also sort of communicated by yourself to your customers. Is there anything meaningfully different when we kind of look at it year-over-year both on the cable side and across your services? As we try to sort of thread the needle on ARPU here how should we look at the price changes that have been contemplated this year versus last year? And then a quick follow-up. With respect to your Internet loading maybe just an update on how you're doing in the West versus your sort of legacy footprint. Maybe just a quick thought on how the progress has been in terms of sort of the share shift there? Thanks.

Thanks, Aravinda. Let me deal with the second part. In terms of relative loading and I assume you're talking wireless as well as home Internet and home products. A couple of things. I would say loading has been good and strong across the entire nation with particular emphasis in the West. The West continues to be our fastest growing market and we're pleased with the penetration gains we're seeing there. That's been consistent post close of Shaw. So we're pleased with that. On the home Internet side, mid-split is done in the West. And so we have a significant product advantage when it comes to home Internet. And now with the Rogers Xfinity rollout, we're very confident about the product differentiation that we have there. And then in the East as I mentioned earlier, as we continue to roll out mid-split, it's having an impact. And so we like what we see. And then of course in Quebec, we continue to make strides particularly now as we have the potential to offer a bundled product and that's a significant market opportunity for us. So we're hitting all of those. And then Aravinda on the first part of your question maybe you could just repeat that.

Was on the recent price changes in the market competitors and ourselves and how that compares with your...

Yes. Aravinda in terms of that we make price adjustments based on the market activity, size of market and frankly the value proposition all in that we're putting in front of the consumer. Our competitors will do what they do. And we'll take a look at how consumers respond and then we respond accordingly based on that. I won't speculate too much on what anything happens over the course of one or two weeks and whether that sets any type of precedent for the rest of the year. It's a competitive environment. And we will continue to make the moves we need to do to balance subscriber share leadership and ARPU growth. Okay. Thanks, Aravinda. And Galeene, we have time for one more question.

Good morning. Thank you for taking my questions. First, can you remind us of the general synergies between the sports asset and the telecom business, specifically regarding the benefits of integrating MLSE with Rogers going forward, considering the market has not fully recognized that value in the past? Secondly, I appreciate the guidance provided for 2025. Could you also offer insight on organic deleveraging expectations for that year, regardless of the impact of the structured equity transaction, particularly what the business anticipates doing in terms of organic deleveraging in 2025? Thank you.

Jerome, I'll start with the first part and then Glenn will talk to the second piece of it. In terms of our strategy, with respect to sports and entertainment, I think there's three principles that I'll outline. It warrants a deeper conversation that will come in due course as we close MLSE. But there are a few things, I would highlight. Our ownership in sports and entertainment is significant, and there's significant value, which is not reflected in our share valuation today. And so, that's the first point I'd make. And those assets continue to grow at double-digit rates, in terms of value. And so, it's a good growth opportunity for us strategically. The second part is the integration of assets and the synergies it creates. And there's really two parts to that, that you're getting at. We see opportunities for operating cost synergies for sure, as well as opportunities for revenue synergies across the assets. And we expect to capitalize on that. And then, of course, there are synergies as the largest distributor of content and in particular sports content, throughout the nation. We have the unique ability to look at the whole ecosystem from sports ownership, all the way to the viewing experience of the consumer whether it's in their home or on their mobile device. And we think that's a huge opportunity for us to capitalize on. And then the last piece, which is one for us, which is how do we monetize that and through investment vehicles and the alternatives that we have, and how do we surface that value for Rogers shareholders. And we're on that course. And as I said, at the outset, this is something that you'll hear and see more of, as we go down that strategy. But the value opportunity is significant for Rogers shareholders.

And then, Jerome, on the organic deleveraging, you see our guidance around EBITDA growth and free cash flow. We will apply the available free cash flow of which we retain a substantial portion certainly relative to our peers to invest back in our balance sheet and lower leverage accordingly. And so, we will have some emphasis around the organic delevering as well as our other balance sheet initiatives that we've touched on. I'm not going to guide on leverage beyond that, but we'll continue to emphasize that delevering. We have a ways to go and it remains a priority focus for us.

Thank you, Jerome and thanks everyone for joining us. And if there's any follow-up, please reach out to the Rogers team here. Thank you.

Thank you, all.

This concludes the question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.