Quebecor Q3 2026 Earnings Call Transcript
Quebecor (TSX:QBR) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Quebecor Inc. reported strong financial performance for Q3 2026, with cash flow from operations rising by 15% to $530 million, EBITDA increasing by 13% to $707 million, and net income attributable to shareholders up 26% to $296 million.
The company achieved record growth in its telecom segment, with adjusted EBITDA reaching $648 million, up 7.5% year over year, driven by a 4.4% increase in service revenues.
Quebecor’s strategic focus on expanding market share in the wireless segment resulted in the addition of 100,700 net new mobile lines, a record for the company, despite industry-wide declines in total net additions.
The company’s ARPU continued to grow, reaching $36.08, supported by customers choosing richer plans without any price increases.
Quebecor maintained its position as the least leveraged telecom operator in Canada, with a net debt to EBITDA ratio of 2.69, and continued to invest in network expansion, particularly in 5G, while also focusing on cost optimization.
The media segment saw a significant improvement, with adjusted EBITDA increasing by $16 million to $40 million, attributed to cost-reduction initiatives and higher subscription revenue.
Looking ahead, Quebecor is confident in its growth trajectory, with plans to continue expanding Freedom Mobile’s national presence and maintaining strong performance in the telecom and media segments.
Full Transcript
OPERATOR
Good day, everyone, and thank you for standing by. Welcome to the Quebecor Inc. financial results for the third quarter 2026 conference call, and I would like to introduce Hugues Simard, Chief Financial Officer of Quebecor Inc. Please go ahead.
Hugues Simard (Chief Financial Officer)
Welcome everyone. My name is Hugues Simard. I’m the CFO, and joining me to discuss our financial and operating results, as usual for the third quarter of 2026, is Pierre Karl Péladeau, our President and CEO. Anyone unable to attend the conference call will be able to access the recorded version by logging on to the webcast available on Quebecor’s website until the 3rd of February of next, as usual. I also want to inform you that certain statements made on the call today may be considered forward-looking, and we would refer you to the risk factors outlined in today’s press release and reports filed by the corporation with the regulatory authorities.
Let me now turn the floor to Pierre.
Pierre Karl Péladeau (President and Chief Executive Officer)
And good morning everyone. So I’m very pleased to report once again solid operational and financial results for Quebecor in 3Q26. In all our business sectors, we’re continuing to improve our performance quarter after quarter through disciplined execution and rigorous management, resiliently and ever more successfully delivering on our expansion plan, growing our wireless market share in all markets across Canada, generating consistently strong cash flows, and maintaining the best balance sheet of the industry on a consolidated basis.
In 3Q26, Quebecor continued to improve all its key financial indicators. Cash flow from operations increased by 67 million, or 15%, to 530 million. EBITDA improved by 79 million, or 13%, to 707 million. And net income attributable to shareholders grew by 60 million, or 26%, to 296 million. We reduced our net debt by more than $220 million in the quarter, bringing our net debt to EBITDA ratio to 69, still the lowest leverage of the Canadian industry by some margin.
After buying back more than 50 million of our stock and investing 177 million in capital expenditures for growth projects, investment in our core systems, and the continued improvement of our network and best-in-class client experience to fuel our resilient and profitable growth. I will now review our operational results starting with our telecom segment. I am proud to report yet another record quarter for our telecom segment. In the third quarter we delivered adjusted EBITDA of 648 million, up 45 million or 7.5% year over year. This is the highest quarterly adjusted EBITDA in our history and our strongest EBITDA growth since the acquisition of Freedom Mobile. Our adjusted EBITDA margin was 51%, an improvement of 160 basis points.
Total revenues were 1.3 billion, up 4.2%, driven by service revenues of 1 billion 5, which grew even faster at 4.4%. Adjusted cash flow from operations reached 475 million, up 7.9%. These are outstanding results, confirming that the momentum we have built over the last several quarters is not only sustained, it is accelerating. Let me start by outlining our key achievement this quarter: we added 100,700 net new mobile lines—sorry. The best quarterly growth in the history of our company. This surpasses our previous record of 130,800 lines we added in Q3 last year. All three of our brands, Videotron, Freedom Mobile, and Fizz, contributed to this performance. And we achieved this in a market that, by our national competitors’ own estimates, saw total industry net additions decline by 30 to 40% this quarter.
Despite the tighter market and maintaining our everyday value-driven pricing strategy, we continued to grow and even accelerated our growth, proving the strength of our business model. At the same time, our consolidated mobile ARPU continued its progression. For the fourth consecutive quarter, ARPU increased year over year, reaching $36.08 in Q3, up $1.03 from 35.05 in Q3.25, beating again the sequential gain of $0.48 in Q4 25, $0.49 in Q1 26, and $0.86 in Q2 26. While our competitors continue to report declining revenue per subscriber, we continue to improve, and even more each quarter. Once again, we are demonstrating that volume and value are not mutually exclusive and that our ARPU growth is sustainable.
Our growth is sustainable because, contrary to our competitors, it is achieved without any price increase for our existing customers across all our brands. Over the course of this year, the Big Three have implemented successive rounds of price increases on their customer base, with some of them raising monthly rates several times. Since the beginning of 26, we have chosen a different path. Our ARPU growth results from our customers choosing richer plans and staying with us longer, not from raising their bill or adding various fees.
Our performance is a testament to the strength of our marketing approach, built on superior customer experience, transparency, and peace of mind. Let me share with you a concrete example. On July 24, Freedom Mobile gave access to its 5G network to all customers on all plans at no additional cost. That is how we build trust and value—by giving our customers more, not by charging more. Our customers know what they pay for, they know what they get, and they know it will not change without their consent.
Despite a sluggish market and then make population growth and the slowing improving penetration, we’re continuing to show that the runway ahead of us is still long with very significant untapped opportunities to continue to grow our market share profitably. In all our main markets, many, many Canadians still want to break free. Free from price increases they never asked for. Free from complexity, free from the feeling of being taken for granted. That is exactly why every quarter more Canadians are choosing to make the switch.
We are also continuing to extend the reach of our networks. During the quarter, Freedom Mobile further expanded its 5G network in Ontario, Alberta, and British Columbia, bringing enhanced connectivity to more than 500,000 additional Canadians. Here in Quebec, on October 1, Videotron announced the expansion of its wireless service area to several communities in Abitibi–Témiscamingue, offering more than 25,000 residents a true competitive alternative for their mobile service.
Turning to wireline, we added 8,600 Internet customers in Q3 at a higher average revenue per customer, generating 3% Internet revenue growth. This is a good performance in a mature market which bodes well for the coming quarters. Looking at the cumulative first nine months of 26, we clearly continue to execute and perform with remarkable consistency. Year to date, service revenues grew by 4.2% to 3.1 billion. Year to date, adjusted EBITDA grew 6.4% to 1.9 billion, once again at a meaningfully higher rate than revenue. And we consistently pare down our cost structure while expanding our business. Year to date, adjusted cash flow from operations reached 1.4 billion, up 7.4%.
These results reflect a platform built for durable performance, not for short-term gain. Looking ahead for the fourth quarter and the holiday season, I’m confident in our trajectory. Freedom Mobile national expansion continues to gain strength. Videotron’s leadership in Quebec remains strong and Fizz continues to build its position as the leading digital brand in Canada. Our cost discipline creates operating leverage that will continue to benefit our shareholders, and our Internet speed upgrades and 5G investment are building the network differentiation that will drive growth for years to come.
We’re coming to the last month of 26 with strong momentum and the strongest value–volume combination of the entire Canadian industry. Turning to the media segment, I am pleased to report a significant improvement in our financial performance with adjusted EBITDA reaching 40 million in the quarter, up 16 million year over year. This improvement mainly reflects savings from cost-reduction initiatives, including lower content costs, higher subscription revenue driven by a new affiliation agreement, and estimated support from Quebec’s new tax credit for news media. While encouraged by these results, we remain prudent and disciplined given ongoing industry challenges, notably in advertising.
TVA led once again the Quebec television market in the third quarter with 43.5% market share, up 2.3 points year over year. The TVA network grew its share to 23.1%, up 1 point, driven by such hits as Chanteurs masqués, which is The Masked Singer, and Indéfendable, the most popular scripted daily program. LCN remains Quebec’s most-watched specialty channel. Together, TVA and LCN led political coverage, airing the most-watched leaders’ debates Fall ’26 and election night Quebec ’26.
We also reached a new 12-year sublicensing agreement with Rogers for the French-language broadcast rights to the NHL games through the 2037–2038 season, reinforcing TVA’s position as the premier destination for hockey fans in Quebec and across Canada. Games will also be available on illico+ as viewing habits evolve and distribution platforms diversify. I will now let Hugo review our detailed financial results.
Hugues Simard (Chief Financial Officer)
Merci, Pierre Karl. On a consolidated basis in the third quarter, Quebecor recorded revenues of 1.45 billion, up 4% from last year, and EBITDA reached 707 million, up 79 million or 13%, helped by a $32 million decrease in stock-based compensation expense across all the corporation segments. Excluding stock-based compensation, EBITDA is still up 47 million or 7%. Free cash flow decreased by 22 million or 5% to 422 million due to a lower working cap adjustment, while cash flows from operating activities increased by $11 million or 2% to 593 million compared to the same quarter last year.
In our telecom segment, total revenues increased 4% to $1.3 billion. Total service revenues, our primary indicator of recurring revenue momentum, were $1.05 billion, up $44 million or 4.4% year over year. Wireless service revenues were $492 million, up 10%, driven by continued subscriber and ARPU growth across our three brands. Wireline service revenues were 555 million, up 0.3%, with Internet revenue growth of 3% more than offsetting the ongoing structural decline in traditional services with rigorous cost management.
Adjusted EBITDA reached 648 million in the telecom sector, of course up 7.5%, our highest adjusted EBITDA ever recorded in a single quarter, with adjusted EBITDA margin reaching 51%, a 160 basis point improvement. As mentioned, year over year, once again our adjusted EBITDA grew at a rate significantly higher than our revenues. Operating expenses thus fell to 48.9% of revenue from 50.5% a year ago and to 48.7% year to date from 49.7%. This is not a one-time optimization and it has not come from headcount reductions.
It is the compounding effect of the continued optimization of our cost base while improving the quality of our revenues, and we expect AI to continue driving efficiencies in the years ahead and this transformation is already underway. Telecom capex spending, excluding spectrum licenses, was up by $10 million or 6.4% in the quarter while we continue to invest in the deployment of our Internet infrastructure and the continued 5G rollout, including the expansion of Freedom Mobile’s national footprint. While some of our peers are cutting back on their network investments, we continue to deploy capital with discipline where it creates genuine competitive differentiation and lasting value for our customers and shareholders.
Despite these additional investments, quarterly adjusted cash flows from operations still increased by $35 million, or 7.9%, to reach $475 million. This sustained cash flow generation reflects the quality and resilience of our operating model and gives us the flexibility to keep investing in our networks, expand Freedom Mobile nationally and create long-term value for our shareholders. Our Media segment revenues reached 154 million, up 2.1 million or 1.4%, driven mainly by higher subscription revenues and increased activity in our film and audiovisual services. EBITDA rose by $16 million to $40 million, primarily reflecting the benefits of our cost reduction initiatives along with revenue growth. Sports and Entertainment segment revenues declined by $4 million to $65 million, with EBITDA down 0.9 million to $14 million.
Quebecor reported a net income attributable to shareholders of $296 million in the quarter, or $1.33 per share, compared to a net income of 236 million, or $1.03 per share, reported in the same quarter last year. Adjusted net income, excluding unusual items, came in at 294 million, or $1.32, compared to an adjusted net income of 242 million, or $1.05 per share, in the same quarter last year. For the first nine months of the year, Quebecor’s revenue rose 4% to $4.3 billion and EBITDA increased 7% to $1.9 billion, held back by a $55 million increase in stock-based compensation charges.
Excluding stock-based compensation, EBITDA would have grown $183 million or 10%. In our telecom segment, EBITDA grew 7%, an improvement of 131 million year over year. Excluding stock-based compensation, our telecom adjusted cash flow from operations totaled 1,000,044, an increase of $99,000,000 or 7%. As of the end of the quarter, Quebecor’s net debt to EBITDA ratio decreased to 2.69 times, a significant improvement from the 2.87 times just a quarter ago, further widening our lead as the least leveraged telecom operator in Canada.
During the quarter, Videotron repaid 200 million in its term loan tranche, in its last term loan tranche that came from the Freedom acquisition and that was maturing April 2027, and another $100 million on October 6 after quarter end. Only $100 million now remains in this tranche, the last remaining portion of the financing put in place, as I just said, for the Freedom acquisition. All in all, we have a best-in-class balance sheet with available liquidity of more than $900 million at the end of the third quarter.
In the first nine months of the year, we purchased and canceled 3.9 million Class P shares for a total investment of $238 million. We thank you for your attention and will now open the lines for your questions.
OPERATOR
Thank you, ladies and gentlemen. If you do have any questions at this time, please press star followed by 1 on your touch-tone phone. You will then hear a prompt that your hand has been raised, and should you wish to decline from the polling process please press star followed by 2. If you’re using a speakerphone you will need to lift the handset first before pressing any keys. Please go ahead and press star 1 now if you have any questions. Thank you.
And your first question will be from Sebastiano Petty at JPMorgan. Please go ahead.
Sebastiano Petty (Analyst)
Hi, thank you for taking the question. I guess number one, can you just help us on, update us I guess on the push into Western Canada? I guess how we’re thinking about the contribution there relative to your legacy or previous GTA as well as some of the other markets as well. I think, PKP, Carl, you talked about taking share in all markets, so just help us think about what inning are you in in terms of the Western Canada push, just so as we kind of think about extrapolating the healthy volume gains going forward.
And then for you, as you think about capital allocation. Leverage continues to drift down here as you kind of talked about 2.69 down from 2.87 last quarter. Buybacks slowed in the quarter. Can you just maybe help us, update us on the capital allocation framework? Should we anticipate leverage continuing to drift lower? Should we anticipate a re-acceleration in buybacks and beyond? Thank you both.
Pierre Karl Péladeau (President and Chief Executive Officer)
Yes. Good morning, Sebastiano. Well, as you know, Freedom started as more of an Ontario customer base through all the years and especially probably under Shaw. They’ve been investing more on the western side but it was still considered, at the end of the day, the smallest part of the customer base for Freedom. And there’s always two sides of a coin: the negative one is that it’s a small position; the positive one is that it creates significant opportunities and a market to grow there.
Certainly, the market is different, and on the western side it’s different between Alberta and B.C. There are different markets and obviously they’re different also from Ontario. We need to look at them differently. The level of the quality of our network is also different from one to the other. We know where we should invest, and somewhere it’s tougher to invest in certain areas because of probably not as good conditions that we can find elsewhere. That would not stop us to continue to invest to make sure that we will be able—obviously service is there because we go through roaming—but at the end of the day we would prefer using our own network for cost reasons.
So we will continue to make our brands known. This is an exercise that we will continue to do, and where we’re sitting here, we can see that we have favorable results and our brands continue to be better known. I think that for Fizz in B.C. is also a good positioning because digital is something that is more on demand. So it’s a matter of continuing to work day to day and bringing our brands better known, and our strategy and marketing strategy also as efficient as it is elsewhere.
Hugues Simard (Chief Financial Officer)
And just pointing out, maybe to add a little bit, Sebastiano, that our market shares out west are still fairly limited, to be honest. As Pierre Karl said, we started from almost nothing, to be honest, and we’re still in the single digits. So this is something that is obviously a huge opportunity ahead of us still, and one that, as Pierre Karl just said, we’re diligently working on. As to your capital allocation question, I’ll point out firstly that Q4 capex, as I’ve said a number of times, we’re still in line with our annual capex guidance, which will obviously mean, if you run the numbers, that there’ll be a bit of a pickup in Q4. There is some timing in some of our investments that will just catch up in Q4. So there should be a bit of an increase in capex in Q4.
Other than that, at 2.69 we are well into the sweet spot that we had outlined as our operating leverage going forward. And now that we’ve almost repaid all of it—there’s 100 million, as we said in our scripted remarks, there’s $100 million left of term loans—and we’re not using margins in any way and haven’t been for quite some time. So we’ll just keep on focusing on our optimal refinancing of our various bonds and fixed income instruments that will come up over the next years.
We don’t have anything pressing in terms of our next maturities. So I would expect a continuation of our ongoing capital allocation strategy that we’ve been executing for the past little while. In terms of dividends, we increased last quarter. We will revisit next year and continue to pay down the debt that’s left to be repaid. And, as you know, we have renewed our stock buyback program as well going forward. So I wouldn’t expect any short-term change in our capital allocation strategy, Sebastiano.
Sebastiano Petty (Analyst)
Great. Thank you both.
OPERATOR
Next question comes from Matthew Griffiths at Bank of America. Please go ahead.
Matthew Griffiths (Analyst)
Yeah, hi, good morning. Thanks for taking the question. So maybe just to start, just to clarify on the impact of the stock-based comp this quarter, is the 31 that you’re quoting, are we supposed to interpret that as the in-quarter amount or is that the year-over-year change that you’re quoting? Sorry if I’m maybe the only one who is unsure about that, but if you could clarify that’d be helpful. And then just on the 5G coverage and 5G kind of coverage expansion, was that done within the quarter or was that kind of an ongoing process throughout the year, and you’re just kind of disclosing that you hit like a milestone of half a million people covered? And I guess the obvious next thing would be, you know, are you planning on continuing that expansion or is this kind of more of a lumpy type of upgrade? Thanks.
Pierre Karl Péladeau (President and Chief Executive Officer)
Thank you, Matthew. I will answer the second part, and quite easily. It’s an ongoing process. We are not rushing anything. I remember a few years ago some companies were rushing to go 5G thinking that it would be the end of the world and the big revolution that never happened. Monetization was something people were considering. We work in a competitive environment and, at the end of the day, what the customers are looking for is good service, good product, but also good prices.
And therefore, if you are moving different to what the market is expecting, customers are expecting, unfortunately you go not in the right direction. So we always thought that we will invest with discipline, not in a quarter, to build out our 5G network. So just to conclude, again, it’s an ongoing process and it will continue to be in terms of quality of the network and the extension or the amplitude of the network.
Hugues Simard (Chief Financial Officer)
And your specific $31 million stock-based compensation question, Matt? It is. The 31 million is the difference in impact for the quarter compared to last year of stock-based compensation. So just to give you the direct numbers, our EBITDA for the quarter is 707 million. Including stock-based compensation, it would have been 693 million without stock-based compensation. So a positive pickup, a pickup of 14 million. Last year our EBITDA was 628 million.
Excluding SBC, it would have been 646. So that’s a 17 million hit on EBITDA. So 14 plus 17, you’ve got a $31 million impact year over year for the quarter.
Matthew Griffiths (Analyst)
Thank you guys, I appreciate it.
OPERATOR
Matthew, next question comes from Mahar Yaghi at Scotiabank. Please go ahead.
Mahar Yaghi (Analyst)
Yes, thank you for taking my question. Sorry, I wanted to ask you, just to follow up on the question on Abbot, if you can also take away the impact of etia, maybe just to have the numbers year on year clear for us in terms of the growth in the telecom business on the EBITDA side.
Hugues Simard (Chief Financial Officer)
Sure. For the quarter, ETA’s EBITDA is honestly marginal. It’s about, you know, it’s about $5 million or less. So you shouldn’t worry so much about that.
Mahar Yaghi (Analyst)
Okay. Okay, great. So obviously very strong numbers on subscriber loading. I wanted to ask you two questions on that. First one is, compared to Q2, Q1, it seems like it looks like your market share of net new adds this quarter is closing in on 50, 52%. In your view, what is the biggest driver for the improvement versus the first half? Was it improved retention, lower churn, or gross loading improved beyond what we saw in the first half? And the second question is, when we see numbers like these and we look back previous periods where you had very strong loading like that, we got followed by increased competitive dynamics in the industry that we all suffer from. I guess, how do you think you can sustain those kind of net adds without seeing increased competitive pressure coming from the incumbents?
Pierre Karl Péladeau (President and Chief Executive Officer)
Thank you, Mai. I will let you know, maybe give more details, but I would say that all the answers you mentioned are the reasons. But before going there, I’d like to—you mentioned ETIO. I think it was important here to tell you that, financially or in terms of numbers, it’s not. And we hope that maybe it’s going to be a huge investment, a huge positive result. But what is important to remind is ETIO is a company that is providing some very strong support in a very competitive environment.
The experience we had with them for the last, what, 10 years now, almost, was very positive. And we continue to think it will continue to be positive and bring us the capacity also to increase, in a different kind of business, the revenue growth. It reminds me—and sorry, I’ll take a few seconds for—it’s like my father. My father, when he started Le Journal de Montréal, a newspaper needs to be distributed. Sometimes what you do is that you hire your own employee that will distribute the newspaper.
Instead of doing that, you create a company that was distributing periodicals and newspapers, and it became a company that was also servicing other customers, which basically was using the asset to grow the revenue. And I think of ETIO, obviously differently because we’re talking here on IT, which is creating significant value and for us having the capacity to grow this business in the future. So eventually, if you have additional questions, I’m sure that we will be happy to answer them.
But we think this as a very strategic acquisition. And instead of our—yeah, we have our own employees that work very closely with them, but we also have a different kind of intelligent network that brings value to the company. For your other piece, I guess that what I will say is that—and we’ve been seeing this all day, all week, all month long—our competitors don’t help themselves. They have fights against the regulator. They go in court, they fight fees. The CRTC are going against them. They charge that kind of fee, additional fee. So I think that the market and the customers know that. They know that they receive increases without even knowing about it. Well, I don’t know what’s their mindset.
Maybe they think that yeah, we’ll lose some customers, but at the end of the day most of our customers will not be able to find out and they will pay. Well, that could be something that they consider. We’re not going to do this. We’ve never been part of the big three and we will never be part of that. What we’re doing is servicing our customers. I mentioned it in my remarks: transparency. And this would bring the kind of financial and favorable results we had for the last, what, now almost 20 years in wireless.
And we will continue to service this market with that kind of philosophy, that kind of policy. And we look forward to see this as a continuous recipe being favorable. Another—if you have anything else to add.
Hugues Simard (Chief Financial Officer)
Well, just adding, honestly, as you just said—how did we do this, Maher—you know, as Biakal said at the beginning, all of the factors you mentioned are true in terms of gross loading, in terms of churn, in terms of other things. But what’s our different path, as Biakal outlined in his opening remarks, is what it has been: every day low price for many, many quarters and many years. And this is just building that confidence with the customers that there will not be surprises and that we will continue to provide the best service and the best experience at the best price.
And you know what, that’s why people are switching and that’s why people are coming to us and they’re staying with us. And that is what is explaining that high loading. But if I can, let’s take you guys off the loading for a minute. And if you look at wireless service revenues, we’ve said it in terms of growth that we still have market share to gain in the West. We still have market share to gain in Ontario, obviously in Quebec as well. But we still have a long runway ahead of us. But still, looking at putting that in perspective, we said still single-digit market share in the West—obviously huge opportunity.
But look at it from a different lens and have a look at the wireless service revenues for the industry this quarter, or last 12 months, let’s say, and you’ll see that we’re almost 8% of wireless service revenues. If you add—you know, we’re just slightly under $2 billion, if our calculations are correct, for the last 12 months, whereas the top three are more than $20 billion. So 8% market share of service revenues, I think you will agree, is still a sizable opportunity ahead of us because we will clearly gain a lot more than that.
A year ago we were at 7, maybe slightly ahead of 7%. Now we’re now almost 8%. And this is the path ahead of us and this is the opportunity ahead of us, and doing it while, as we just explained, through an everyday low-price approach that’s been successful for many retailers in the past and is clearly successful for us right now.
Pierre Karl Péladeau (President and Chief Executive Officer)
I will finish by adding, you’ve been following the industry for so many years and you know what’s the difference between Quebec and the other areas in the country. We’ve been used to having lower prices in all our retail and all our services and, accordingly, we have our cost structure structured considering this specific environment, and we’re bringing this elsewhere. And this is why we have the capacity to remain very competitive and we intend—and again, as I said, one is not the opposite of the other one.
We can create value and we can create vol. RGU are not going against ARPU. In fact, they go in the same direction for us.
Mahar Yaghi (Analyst)
Thank you and congratulations on the quarter.
OPERATOR
Next question comes from Vince Valentini at TD Cowen. Please go ahead.
Vince Valentini (Analyst)
Hey, thanks very much. First, given how strong the wireless service revenue is, I’m assuming there’s positive operating leverage. I know you don’t have it broken out exactly, Hugues, but directionally do we think of wireless segment EBITDA being up sort of 12, 13% year over year?
Hugues Simard (Chief Financial Officer)
Yeah, that’s reasonable. Yep.
Vince Valentini (Analyst)
Okay, thank you. Just nitpicky on the financials. Other revenue within the telecom segment, it seems to be up every quarter this year. This quarter it’s up 36% year over year. What are you putting in that other category?
Hugues Simard (Chief Financial Officer)
In the wireless? Other wireless must—no, not in—
Vince Valentini (Analyst)
Not in wireless. Just on your supplemental where it’s got all the categories of revenue. For telecom, there’s an other segment and it’s up 36% year over year. So it’s not mobile equipment revenue, it’s something you call other.
Hugues Simard (Chief Financial Officer)
Other revenue. I don’t know. I’ll get back to you on this because I’m not quite sure what the other is today. But it’s a small number, right? It must be very small in the revenues.
Vince Valentini (Analyst)
Like $60 million or thereabouts. But whatever, we can take it offline if that’s easier for you. That’s fine by me. The last one—I look at, you gave a very comprehensive answer to Maher’s question. But I just want to double click on it. I mean, I think you have to admit that the incumbents, despite all of, yes, their potential challenges and the CRTC issues and the fact that you guys have sort of grown up with a different starting point and maybe better behavior, despite all that, the incumbents all moved their flanker brands from $45 to $50 early in Q3 and, you know, there’s a lot of moving pieces around that of promotions and so forth.
But that’s been the rack headline rate on their websites the entire quarter and you guys stayed at 40 for Freedom. So the price gap went from $5 to $10 and instantly you’ve seen this massive surge in your market share. You clearly are going to add over 50% of the sub adds in the industry this quarter. Do you not think that there’s some linkage there and that maybe you’re in some respects over-earning this quarter and, if you keep this up with a $10 price advantage, that the others may be forced to respond at some point and then everybody just loses as opposed to you guys just taking that extra ARPU and still driving strong sub adds?
Pierre Karl Péladeau (President and Chief Executive Officer)
Well, that’s a tough question to answer, Vince, but, you know, I would say, you know, if it’s not broken, don’t fix it. I guess what we’ve been able to achieve are good results. And again, you know, it’s unfortunate that, and I guess that, you know, you would like to have a different answer. But, you know, again volume is not against ARPU and if we’re able to achieve both, you know, we’ll continue to do so. We should not, obviously, we take care about, you know, what’s taking place elsewhere. We’re looking at what our competitors are doing. I think, and you will agree, I guess as your colleague in the industry, that they probably, you know, didn’t follow the right strategy and they possibly, you know, are changing their mind right now. The repricing effect was, what’s great, was hard for them. Are they changing their mind? Maybe, maybe yes, maybe no. We’ll see. But for the moment, you know, what we can see is that they probably find out that was not a good strategy. Again, if it’s, they don’t fix it, then we’ve been doing good. There’s no reason, you know, why we should change our strategies since, you know, we deliver good results.
Vince Valentini (Analyst)
Okay, fair enough. Thank…
Hugues Simard (Chief Financial Officer)
On the, just back to your other revenue question. I just—okay, I guess I didn’t—I should have reacted, but it’s fairly new. So ATR revenues are in the other revenues. So that’s most of it. We probably also in others put SVOD revenues. So that’s what makes up the other revenues. And the increase is due to the fact that we now include ETIA revenues as opposed to not having them last year. So that’s the 36% increase.
Vince Valentini (Analyst)
That makes sense. Thank you.
OPERATOR
Next question comes from Drew McReynolds at RBC. Please go ahead.
Drew McReynolds (Analyst)
Yeah, thanks very much. Good morning. Just Hugues, for you, just back to telecom, EBITDA growth ex stock compensation expense year over year. I’m not sure in your prepared remarks you actually gave that, so my apologies, but can you just let us know what that is?
Hugues Simard (Chief Financial Officer)
Yes, it’s five and a half percent. 5.6% exactly. Increase ex SBC.
Drew McReynolds (Analyst)
Okay, awesome. Thank you. And then just back to capital allocation. Obviously you’re in fantastic shape. What’s preventing you from, you know, kind of taking capex up significantly and accelerating network expansion? Like, you’ve been very, I think, clear and transparent. It’s a gradual step up over time, you know, as you build out the network. But you seem to have so much financial capacity. Why wouldn’t you step on the gas on network expansion?
Pierre Karl Péladeau (President and Chief Executive Officer)
Drew, I’ll answer by saying, first of all, again, it’s not because we have money that we’ll spend it stupidly. And I’m not saying that investing in our network is stupid, but we’ve been disciplined and we will continue to do so. If we were to have a weak product, then, you know, then we will be forced to do something. But again, roaming is certainly something that is adding our capacity to continue to offer good, good service. So we’ll do this and we will continue to be disciplined in terms of allocation.
And I guess the board, at the next board meeting, after reviewing the year results, will sit and we’ll listen and we’ll discuss what could be a different capital allocation. It’s a matter of the board and we look forward to have their own insight to make sure that we’re heading in the right direction.
Drew McReynolds (Analyst)
Okay. Okay. Thanks, Peter. Carl. And then one final one for me, maybe back to you, Hugues. Just amazing work on the EBITDA margin for telecommunications. And I think you’ve quarter on quarter explained kind of everything behind it. As you think about Western Canada expansion and that next leg of growth, I know last quarter you remained comfortable that you could absorb the OPEX investment as you kind of build out your brand and grow that in the West.
Are you still comfortable in kind of maintaining, you know, that margin trajectory or operating leverage as you put more into the West?
Hugues Simard (Chief Financial Officer)
Absolutely, absolutely. You know, this is something, Drew, I think, you know, operating margin and EBITDA margin is something of an obsession for us and it is something we have been not only good at, but I would argue the industry standard at many, many years, even starting with a $20 less ARPU, we keep maintaining higher margins. So this is something, and why I’m saying this is that that is the result of continuous improvement, continuous day after day and month after month trying to find opportunities for cost savings and investing in new platforms that will lead to cost savings and to OPEX reduction.
And this is something that we continue. It is something—it’s in our DNA and it’s something that will continue and we will. I’m more than confident that this is something that will always give us the flexibility to continue to invest for our growth because we are hyper tight and hyper rigorous on our cost base.
Drew McReynolds (Analyst)
Okay. Amazing performance. Thank you both.
Hugues Simard (Chief Financial Officer)
Thank you, Drew.
OPERATOR
Next question comes from Jerome Dubreuil at Desjardins. Please go ahead.
Jerome Dubreuil (Analyst)
Thanks for taking my question. I’ll have to be that guy. But we’ll see what happens after 2030 with regards to MVNO. But in the meantime, do you think it would be beneficial for Quebecor to have some sort of an agreement with SpaceX, possibly for an MVNO? Or do you think letting them in is too risky of a strategy? Thank you.
Pierre Karl Péladeau (President and Chief Executive Officer)
Thank you, Jerome. Well, maybe first of all we’ll try to—you guys, we know that you have another appointment in nine minutes, so we’re going to try to answer that more quickly. Yeah, obviously MVNO is of importance. The policy is of importance. You know, we’ve been seeing the federal government being concerned about, you know, this situation. We see the government having a narrative regarding NTN, so non-terrestrial networks, I think is of importance for Canada and we will continue to look, you know, what’s taking place there.
As of today, as you all know, we are in a regulated business, therefore, spectrum is a scarce asset and we need to make sure that Canada will use it as most efficiently as possible. We’re always open about new technology. We will need to look at that in detail. I guess that it’s too early to have a final or the beginning of a final conclusion, but there are certainly some interesting movement for the future. And yeah, networks will change, but certainly something will never change is the customer experience and our capacity to deliver a good product.
This I think that we’re good at. And we will continue to enhance and increase the capability of adding different networks. The backhaul is there, the wireless network is there. NTN is another thing that we will need to consider either in association or either in a different mode.
Jerome Dubreuil (Analyst)
So sorry, I’m just going to push a bit further on that one. If SpaceX were to come to you, knocking on your door and ask for an MVNO, would you say yes or no today?
Pierre Karl Péladeau (President and Chief Executive Officer)
Well, yeah, it’s—I would say, you know, as you probably—I did some politics, you know, I will answer parallel to your question. I think this is an assumption that we didn’t, you know, face yet. So I don’t think it works, you know, to mention it, to answer it.
Jerome Dubreuil (Analyst)
Thank you.
OPERATOR
Next question comes from Stephanie Price at CIBC.
Stephanie Price (Analyst)
Hi, good morning. Just wanted to stick on Internet here, or maybe transition to Internet a little bit after the SpaceX commentary. Internet revenue growth was strong at 3%. Just curious if you can give any additional color there on the competitive environment in Quebec and also you can touch on bundling and thoughts on west of Quebec Internet expansion.
Hugues Simard (Chief Financial Officer)
Yes, certainly some color on Internet, plus 3% as you just said. And you will remember, this is after a couple of years of difficult performance on Internet. You will remember, you know, we—last year or two years ago at this point we were struggling and our Internet revenues were actually lower, and now we are back in positive territory. The market is clearly—and why? Because we are within a very competitive environment, but a rationally competitive environment.
We are able to better value our services and our client experience in Quebec and globally. I think the market is a lot healthier and we are certainly able to monetize that value and this superior service that we’ve built over the years and finally translating this in revenue growth in Quebec. So we are quite, we’re quite positive on broadband in Quebec going forward. You know, even in cable—I even ask—you know, wireline is something we haven’t talked much, or you guys didn’t ask us a lot about this quarter. You know, even on cable, you’ll look at minus 4% decreases two years ago or about 18 months ago. We’re now at minus 1% and we certainly see that as continuing. So this is, in our view, a healthy environment, one in which we are clearly demonstrating the value of our products and services, and it’s a healthy cash flow generation machine for us and it’s something that we’re quite positive on.
Pierre Karl Péladeau (President and Chief Executive Officer)
I would add, Stephanie, also that I mentioned it, but I think that it’s worth to add a few words there. The NHL rights renewal that we signed is of great interest, you know, for our cable or TV product, as you probably know. You know, Montreal Canadiens have been very strong for the last month. That brings, you know, additional interest on cable and gives us the capacity also, you know, to improve our streaming and OTT capabilities, which diversifies our capacity to remain strong there.
But we look forward at a decent price. As you saw, prices were significantly higher. We didn’t disclose our price, but what we know is that we have gains and our penetration in terms of providing gains is higher and therefore giving us an interesting edge for the future.
Stephanie Price (Analyst)
Thank you very much.
Pierre Karl Péladeau (President and Chief Executive Officer)
I think that there’s two others. There’s Tim and David. We’ll try to go short again, you know, because my mother educated me politely and I don’t want to make sure that, you know, you guys kind of miss the beginning—miss our friends, blue guys.
OPERATOR
Next question comes from Tim Casey at BMO. Please go ahead.
Tim Casey (Analyst)
Great. Thanks, Deb.
OPERATOR
Next question will be from David McFadden at ATB Cormark. Please go ahead.
David McFadden (Analyst)
Oh great. Thanks for squeezing me in. Maybe you could just give us an update on the network buildout—your own network buildout in B.C. and Alberta.
Pierre Karl Péladeau (President and Chief Executive Officer)
Yeah, quickly, David. You know, Alberta—and I forgot to mention that—but Alberta is going well. We have good capabilities of growing our network there. And B.C. is different from one area to the other. When you go more urban, it’s different. It’s not as easy as elsewhere. Manpower and experience is not as easy, you know, also to find. So in terms of buildout, it’s not also going at the same level that we would like us to do. And obviously, you know, if you were to report of our previous answer on capital expenditure, and this is also a reason why, you know, we’ve been disciplined and we’re not going to do things that are going against quality.
We need to make sure that, you know, the expertise of building our network will continue to be strong and then therefore continuing to be in the future providing quality service, quality products.
David McFadden (Analyst)
Okay, thanks. I’ll follow up with you later on. Thank you.
Pierre Karl Péladeau (President and Chief Executive Officer)
Good. So I would like to thank you all. You’re just fine on time and have a nice day.
OPERATOR
Thank you. Ladies and gentlemen, this concludes the Quebecor Inc.’s financial results for the third quarter, 2026 conference call. Thank you for your participation, and have a nice.
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