This Is What Happens When ARPU Improves; Big Telecom EBITDA Beat

Research evidence excerpt

This Is What Happens When ARPU Improves; Big Telecom EBITDA Beat

TD Cowen Quebecor Inc.

Global Research May 14, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Communications

Our valuation methodology consists of primarily using a relative value approach. We arrive

at a fair value by applying an EV/EBITDA multiple to the wireless and wireline businesses.

For the Big Three, these EV/EBITDA multiples are adjusted depending on our current forecast

for the Government of Canada 10-year bond yield as compared to its long-term average.

For QBR, CCA, CGO and TRI, these EV/EBITDA multiples are indirectly adjusted based on the

macroeconomic environment and the current competitive dynamic of the industries in which

the company currently operates. We also take into account P/FCF, P/E and the dividend yield,

as applicable.

Investment Risks

Risks include, as applicable: (1) Companies within the telecommunications space are highly

regulated and adjustments to regulations could have a negative impact on business operations;

(2) Interest rates; (3) Increased competition in the wireline and wireless space amongst the

Big Three or from new entrants could negatively impact FCF and profitability; (4) Competitive

dynamics amongst incumbents and/or new technologies and/or product and service offerings

could impact the pricing/demand for current offerings (i.e. 5G wireless services could evolve

into substitutes for fixed-line broadband services); (5) A deteriorating macroeconomic

environment could reduce discretionary spending on wireline and wireless services and,

subsequently, valuation multiples; (6) Potential health risks from wireless devices and/or

transmission towers; (7) Macroeconomic cycles which impact spending decisions made by

clients and employments levels in the U.S.