Shaw Communications, Inc. (NYSE:SJR) Q1 2020 Earnings Conference Call - Final Transcript
Jan 13, 2020 • 10:00 am ET
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Vince Valentini of TD Securities.
Yes, thanks very much. Can I ask two questions on Wireless and two on cable? The Wireless first. You don't disclose COA, nobody does anymore, but can you directionally give us any sense as to how much it may have increased in Q1 versus Q4 or Q3 given all the competitive offers out there and given your Absolute Zero plans? I'd just like to get some sort of handle on how much equipment subsidies and other promotional costs are going up.
The second question would be, in December, you finally will be lapping two years of having the iPhone, which has lots of positives for ARPU in future quarters, but is there a negative in terms of churn? Where do you start churning up in Q1? Is that going to be a little bit tougher when those contracts expire in December? Given all the offers from competitors, should we expect churn to go even higher than 1.5% for December and for all of Q2?
And then the two cable ones or there so. [Phonetic] Jay can think about them while Paul is answering. One is home phone. The decline here surprised me a little bit because it has already declined so much in recent years. Correct me if I'm wrong, but it looks like about 17% penetration of your total households now is the number of people who -- on the consumer side who take home phone and it's only like 39% of your broadband customers. Are we starting to reach a floor level here or do you expect the home phone to continue to fall at this kind of pace?
And then lastly just business, is 5% adjusted kind of what you expect now? Obviously, you're adjusting for the data center divestiture or is 5% a bit on the low end of what your target range would be for future quarters? That's it. Thanks.
Vince, it's Paul. Good morning. Thanks for those two questions. I'll take them in order. On your first question about COA, yes, the short-term competitive dynamic that we've seen which has relented a little bit in the last week or so, but certainly was well in place through the course of the Black Friday through early January period probably put about 10% to 15% on the cost of acquisition during that period. I just can -- I'd kind of classify that as a short-term inflationary dynamic that we expect to and hope to see move back to normalized levels over the course of the next few weeks.
On the iPhone cohort, yes, I mean, we are -- as Brad said, we're really, really pleased with how positively that initial class of iPhone customers have responded to our renewal efforts, which of course, as you can imagine, it's been about two years in the making as we build out that team. The sheer scale and compressed