Shaw Communications, Inc. (NYSE:SJR) Q2 2020 Earnings Conference Call - Final Transcript
Apr 09, 2020 • 09:30 am ET
Thank you. [Operator Instructions] Our first question comes from Vince Valentini of TD Securities. Please go ahead.
Yeah, thanks very much. And first my deepest condolences, Brad, to you and your family and whole Shaw organization. Obviously, JR was not just a great business leader and builder, but an absolutely wonderful man and he will be missed by everybody.
I'll try to leave you alone and direct my questions to your new President Paul McAleese. Congratulations, Paul, on the appointment. I have two questions for you, one on Wireless, one on the Wireline and cable business. On Wireless first. I know you warned us on the Q1 call in January that there could be a bit of an increase in churn given what was going on in December and it obviously came through that way. Can you talk a little bit about how the quarter progressed? Did February calm down a little bit versus some elevated levels in -- earlier on in the quarter? And then also what are your thoughts on what happens to both churn and equipment costs now that we've entered the social distancing period? That's the one on Wireless. I'll throw out the Wireline one too just so you can have them both.
You're obviously a bit newer to the cable and consumer business and just wondering if you have any early perspectives on that business that you can share with us today.
Hi, Vince. Thank you very much for those. Yeah, I'm very happy to report that while churn was certainly at a level that was elevated during the last quarter, we saw a really marked improvement in the period between December and February. So you'll recall that we were rolling off the original iPhone cohort from the late December 2017 period. And as I said, I think our team did a great job of managing that really for the first time a program of that scale. But just for contrast the churn rate February versus December was about 100 bps lower. So we saw a really sort of significant reduction in that.
Rolling forward, of course with the level of activity or the lack of activity that you're seeing in the marketplace today, I'd expect to see churn fall to record low levels. I suspect across all operators, you'll see that. And we will be -- we'll be reporting more on that obviously in July, but we've definitely seen improvements on that front.
On the equipment side of things with still limited activity we're seeing in retail, we will expect to see elevated levels of EBITDA relative to expectations, of course, because of the dilutive effect of gross [Phonetic]. This quarter in some respects is going to be essentially a loss quarter for gross for Wireless. There's just [Phonetic] simply not enough activity at the top of the bucket. So, expect to see a relatively neutral performance there or worse.
And equipment, well, one part of the equation I suspect will be --