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Telus Corp (NYSE:TU)
Q4 2019 Earnings Call
Feb 13, 2020, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning ladies and gentleman, welcome to the TELUS 2019 Q4 Earnings Conference Call.

I would like to introduce your speaker, Mr. Robert Mitchell. Please go ahead.

Robert Mitchell -- Investor Relations Director

Hello everyone. Thank you for joining the call today. The TELUS fourth quarter 2019 results and 2020 targets news release, annual MD&A, financial statements and detailed supplemental investor information are posted on our website at telus.com/investors.

On the call today, we have Darren Entwistle, President and CEO; Jeff Puritt, Executive Vice President and President CEO of TELUS International; Doug French, Executive Vice President and CFO; Francois Gratton, Group President and Chair of TELUS Quebec.

With that, let me direct your attention to slide two. This presentation and answers-to-questions can be forward-looking statements that are subject to risks and uncertainties and made based on certain assumptions. Accordingly, actual performance could differ from the statements made today, so we ask that you do not place undue reliance upon them. We also disclaim any obligation to update forward-looking statements except as required by law. We are free to the description of risks and uncertainties in our annual 2019 and MD&A filed today.

Now, let me turn the call over to you, Darren, starting on slide three.

Darren Entwistle -- President and Chief Executive Officer

Thanks, Roberto, and good morning, everyone. In 2019, TELUS continued its track record of delivering strong and consistent financial and operating results in both wireless and our wireline business lines, and the trend that the TELUS team has just demonstrated over a longer term continues in terms of the consistency, the excellence and the diversity of our results across both our wireless and wireline business tenets. While 2019 and indeed the fourth quarter were characterized by profitable growth with a thoughtful balance between continuing to meaningfully expand our customer base and enhancing profitability quarter in, quarter out, year in, year out.

The fourth quarter concluded another year of robust client growth where we added a leading 713,000 net customer additions while achieving our annual revenue and EBITDA growth targets for now the ninth consecutive year. We've realized this continued performance, thanks to the TELUS team's unwavering dedication to executing effectively on our long-standing growth strategy. Indeed, our team's commitment to providing an industry-best customer experience over a globally leading network enable TELUS to continue our leadership in respect of customer loyalty and retention. In the fourth quarter, consolidated revenue was up an industry-leading 3.3%. Moreover, EBITDA increased an industry-best 5.2%. Our team delivered leading fourth quarter customer growth of 176,000 net additions, reflecting the superiority of our broadband networks and customer service as well as our unmatched portfolio of products and services that are clearly resonating with clients, both existing and new.

Turning now to take a look at our wireless business. Fourth quarter network revenue expanded by 2% and was flat versus Q3, adjusting for the impact of lower wholesale roaming revenue, and it was driven by our consistent focus on profitable, high-quality, smartphone-centric subscriber growth. In respect of wireless EBITDA, TELUS achieved year-over-year growth of almost 5%. Wireless loading in the fourth quarter included 70,000 mobile phone net additions, down slightly over last year, largely as we purposely choose to remain on the sidelines for some of the less than economically sanguine competitive activity that was experienced in the fourth quarter of 2019. Notably with an elevated level of competition in the low end of the market, prepaid losses were offset by strong postpaid loading.

Fourth quarter mobile phone net additions were largely unchanged on a year-over-year basis when adjusting for the CRTC pro-rata decision that occurred late in 2018. Net additions for mobile connected devices of 60,000 were down 5,000 in the quarter driven by tablet reductions of 3,000 or 36,000 fewer, low or negative margin tablets versus last year that were partly offset by strong continued growth in our important IoT business. In totality, wireless net additions, inclusive of both mobile phones and connected devices, were 130,000 in the fourth quarter.

Our fourth quarter results reflect the second full quarter of our Peace of Mind endless data rate plans, alongside our attractive TELUS Family Discount offerings and Easy Payment device financing. In addition to facilitating a substantially enhanced customer experience on the path to 5G, these service offerings are supporting sustainable customer growth, enhancing our bundling options and enabling significant opportunities to improve the cost structure of our organization while offering customers attractive affordability opportunities pervasively across our three-old brands from TELUS to Koodo to Public Mobile. We continue to be encouraged by the customer response to this exciting product portfolio, including strong adoption, with over 50% of migration stepping up to higher monthly plans and tracking favorably to our original business plan of 70% step-downs. This includes also robust digital adoption with online transactions up 85% on a year-over-year basis, and it includes a 40% improvement in unrecoverable subsidy spend compared to previous plans. And I think the long-term benefits of that are going to be significant for the TELUS organization, in particular.

Whilst on average, we've seen a decrease in the promotional device cost component of COA and COR, it was amplified in the Black Friday and holiday selling periods. This was due to the high level of competitive intensity around device promotion and the persistence of the subsidy model, alongside unlimited data plans exhibited by some of our peers in the industry. Notwithstanding this, Easy Payment provides compelling tools to enhance handset affordability, such as 0% financing, certified pre-owned devices as well as trade-in and Bring-It-Back offerings that are important for our clientele.

Looking at customer loyalty. TELUS once again led the industry by a considerable margin with our mobile phone churn rate of 1.2%, which was inclusive of both postpaid and our prepaid results. Notably, this result is up to 63 basis points better than the blended churn rate posted by our key competitors. The 9 basis point increase over last year is reflective of intense competition in the consumer market and heightened industrywide churn in Q4 as new unlimited data and device financing offers continue to be stress-tested through the busy selling periods. The extent of our churn leadership is further illustrated by our postpaid churn rate of 0.95% that we delivered in the fourth quarter. Thanks to our frontline team members, TELUS achieved our sixth consecutive year of industry-leading postpaid wireless churn below 1% and in fact came in below 0.9% for the second straight year in 2019, building upon what we achieved in that regard in 2018.

Finally, ABPU of CAD72.79 in the fourth quarter was up 0.3% or roughly in line with Q3 when adjusting for the impact of lower wholesale roaming revenue. Whilst we indicated that there could be some initial ARPU pressure from our endless data plans as high-value customers stepped down, in particular, through heightened market activity, characteristic of the holiday season, encouragingly, we continue to see a relatively stable trajectory with respect to ABPU and ARPU. This has been achieved against the backdrop of industrywide robust data growth and increasing data buckets, an ongoing trend that the industry will continue to navigate through the transition to larger data plans, leading up, of course, to the commercialization and amplification of 5G. Data overage has now become a very, very small part of our overall revenue. And longer term, we anticipate significant ARPU step-ups and network service revenue expansion as customers move to larger data plans with improved momentum financially through 2020 and beyond.

Our positive results continue to be underpinned by our significant broadband network investments. Thanks to the skill and innovation of our team, TELUS earned top spot from Ookla in respect of network speed and coverage for the fifth consecutive time. In addition, just this morning, OpenSignal released its latest report with Canada placing second in its global ranking, behind only South Korea, a country that has already launched nationwide 5G and is consequently known for its fast wireless speeds. In the national report, TELUS ranked number one in Canada for network excellence, our sixth consecutive win from OpenSignal in this regard. More specifically, TELUS' average 4G download speed of 75 megabits per second is significantly faster than South Korea's average of 59 megabits per second within their 5G framework, quite an accomplishment, quite a comparison and a very strong notable for Canada in general. These latest reports build on the consistent recognition that we've received every year over the last two years or more from J.D. Power, from PCMag, from Tutela, in addition to those from OpenSignal and Ookla.

TELUS is clearly the network leader in Canada and among the very best globally, a key differentiator for our organization and I would say a terrific springboard and positioning on the eve of 5G being commercialized in our country. Furthermore, a recent robust PwC study on wireless affordability found that a smaller portion of Canadian household spending is used for wireless services as compared to countries such as the USf and Australia. Indeed, Canadians are spending significantly less as a percentage of income on the basket of services, including home phone, postage, photography, audio, video and printed reading material, thus enhancing their disposable income overall. Moreover, when comparing global unlimited plans on speed, comparing them on access, comparing them on data quality and cost per gigabyte, new Canadian unlimited data plans perform the best, on average, among the G7 as well as Australia. The increased data consumption driven by unlimited data plans on world-leading Canadian networks will unleash substantive productivity and value for our economy and Canadian society, particularly when used in combination with 5G.

Today, the telecom sector injects over CAD50 billion annually into our Canadian economy, which is more than 2.5% of our GDP. With the advent of 5G, the telecom contribution to our national economy is expected to quadruple to CAD200 billion annually. Notably, Canada's decade-long, facilities-based regulatory approach has incentivized billions of dollars of investment to build the infrastructure and deploy the latest technology from urban to rural confines that's required to fuel our digital economy and fuel our digital society and answering some of the biggest social challenges that we face on the health front, on the environment front and bridging the gap on economic disparity. It is these investments that have resulted in Canada being recognized as having among the best wireless networks in the world in terms of speed, quality and coverage, second only to South Korea, a country that is circa 1/100th the size of Canada.

Moving now to wireline and our consistently robust financial and operating results in that segment of the business, what a consistent story it is in terms of the strength of our performance. Indeed, TELUS delivered another quarter of industry-leading performance, industry leading in respect of revenue, EBITDA and subscriber growth, buttressed by our premium, diversified and evolving product portfolio over our globally leading network and underpinned by our industry-best customer service. In this regard, fourth quarter wireline revenues increased 7.6%. Importantly, wireline data revenue grew by 11% in the quarter driven by robust, high-speed Internet and TV customer growth, strong performance in both TELUS International and TELUS Health, and solid growth in home and business security. Wireline EBITDA increased by almost 6% driven by growth in Internet, TV and TELUS Health as well as a solid contribution, once again, from TELUS International and of course complemented by our SmartHome and Business Security services. Impressively, we are now in our eighth year of consecutive quarterly wireline EBITDA growth, a performance unrivaled among our global peer group.

Looking now at our wireline customer expansion. Strong Internet net additions of 28,000 were stable over the fourth quarter of 2018. Industry-leading TV net additions were 15,000, down 9,000 over last year due to heightened competitive activity as well as an evolving landscape of increased over-the-top streaming services. Moreover, strong residential voice resiliency continues to be a positive and highly differentiated story for TELUS, coming in at 12,000 net losses, which represents a 1,000 improvement over last year and also represents our third year of flat or moderating voice losses. Security net additions of 15,000 reflect an 11,000 improvement over last year driven by strong organic growth and enhanced bundling opportunities. Notably, this excludes any benefit from our acquisition of ADT Canada, and we will look to build on our momentum in home and business security solutions in 2020 and well beyond. When including our fourth quarter acquisition of ADT Canada, our year-end security connections increased to include approximately 490,000 subscribers, bringing our base to just over 600,000 security customers as we commence 2020. Indeed, we remain excited with respect to this significantly enhanced scale and incremental opportunities inherent from this transaction, particularly on the back of a strong organic growth momentum that we've established and increasing scale that we've driven in our existing Security business in recent quarters as we've been a North American leader in this regard.

In summary, we earned an industry-leading 46,000 wireline net RGU additions in Q4. And notably, TELUS was the only carrier with positive wireline RGUs in the quarter and in the year, even when we exclude Security. These results also underscore the premium bundled offers available to customers across our highly diversified product portfolio, which includes the superior attributes of our Internet, Optik TV, Pik TV, consumer health and SmartHome Security and home automation offerings. Our strong and consistent wireline and the combination of potent operating and financial results clearly highlight the importance of our dedicated focus on delivering customer service excellence over what is truly a world-leading fiber network.

In this regard, during the fourth quarter, our team expanded our PureFibre coverage to approximately 70% of our high-speed broadband footprint, on our way to 80% coverage by the end of 2020. This positions us well, not just for what we want to do in our future-friendly home portfolio, but of course, the advent of 5G. Notably, in 2019, TELUS Fibre earned a distinct recognition of providing Canada's number one Netflix streaming experience and being the country's best WiFi provider. Clearly, our network awards are not just relegated to wireless, but of course, they expand into wireline with this significant third-party recognition that we're earning on PureFibre coming from the likes of Netflix and other organizations that have recognized our in-home solutions on the WiFi front.

Indeed, more recently, TELUS was recognized as Canada's best gaming Internet service provider for major ISPs in 2020 by PCMag. These awards are a testament to the significant investments that we've made in our leading PureFibre network. And the innovation and the spirit team work exemplified by the TELUS team in putting customers first in every single thing that we do and every investment that we make and execute upon. The strong and consistent performance that's been delivered by the TELUS team, driven by our enhanced PureFibre offerings, will support the continued and sustainable growth of wireline and wireless services, and as I've said, positions us superbly for the commercial rollout of 5G.

In addition to our broadband growth engine, our wireline results continue to be supported by our unique TELUS Health, TELUS AgTech and TELUS International businesses. In a moment, I'll hand the call over to Jeff Puritt for an update on TELUS International and the exciting opportunities stemming from our recent CCC acquisition which will propel TELUS International to the next phase of its growth as this business significantly scales and drive significant customer growth and as well significant expansion in the economics of its operations from a scale point of view. We also have Francois Gratton with us to discuss TELUS Health in the Q&A portion of our call.

In summary, through the success of our strategic growth investments, in combination with our extraordinary team delivering an industry-best customer experience over globally leading networks, we've demonstrated our ability to consistently drive profitable growth over the long term in both wireless and wireline. Our proven strategy gives us the confidence, again, in delivering on the leading annual targets for 2020 that we've announced today, including revenue and EBITDA growth of up to 8% and 7%, respectively. Capex is expected to further moderate in 2020 to approximately CAD2.75 billion, as anticipated, and we progressed materially, of course, on our fiber builds and that's reflected in our moderated capital appetite. This, alongside strong EBITDA growth, will support free cash flow growth of up to CAD2.1 billion before taxes, representing a year-over-year increase in free cash flow of 33%.

Without question, it's the unparalleled execution by our talented team that enables our shareholder-friendly initiatives, notably, our multiyear dividend growth program, which now quite unbelievably is in its 10th year. In 2019, we returned more than CAD1.3 billion to shareholders, building on the close to CAD18 billion we've returned to shareholders since 2004, which represents almost CAD30 per share. Consistent with the approximate 7% dividend growth achieved in each of the last three years and following six consecutive prior years of circa 10% annual dividend growth, we continue to target an additional 7% to 10% annual increases in our dividend in 2020 through 2022. Notably, in 2020, we expect to be comfortably within our free cash flow payout ratio guideline of 60% to 75%. Our dividend growth program is supported by our robust 2020 targets that we've announced today. It's supported by our track record for delivering against these goals and our expectations for significant free cash flow expansion, not just in 2020, but in the years to come due to a potent combination of moderating capex and strong EBITDA growth. Further amplifying the success of our leading track record of shareholder-friendly initiatives, we've announced a two-for-one share split that will become effective March 13, 2020.

In conclusion, 2019 represented another strong year for the TELUS organization and our investors, and our 2020 target reflects our team's commitment to building upon this level of performance in 2020 and the years thereafter. I'd like again to take this opportunity to thank the TELUS team for their innovation, skill and grit and consistently delivering on our strategy, navigating the challenges that we always encounter along the way and for how this translates into strong results for our customers, strong results for investors, the economy and the communities where we live, where we work and where we serve. The positive outcomes generated by our focus on answering key societal issues enabled us to create value for all of our stakeholders in 2019, including supporting tens of thousands of Canadians through our Connecting for Good initiatives, which provided almost 40,000 Canadians from low-income families access to low-cost, subsidized, high-speed Internet through TELUS Internet for Good; supported almost 4,000 youth, aging out of foster care with access to a free smartphone and free data plan through TELUS Mobility for Good; and finally, supporting 22,000 Canadians living on our streets with access to mobile healthcare with our TELUS Health for Good mobile clinics.

On that inspiring note, I'll turn the call over to Jeff to provide some color on our TELUS International operations. Jeff, over to you.

Jeff Puritt -- Vice-President and TELUS International President and Chief Executive Officer

Thanks very much, Darren. Good morning, everyone. At the end of January, we were very pleased to close the acquisition of CCC, a leading provider of higher value-added business services with a focus on customer relationship management and content moderation. The expanded capabilities of our combined companies will further elevate the globally admired customer experience and innovative digital solutions that are synonymous with the TELUS International brand.

With this acquisition, TELUS International's size, scope and reach have now grown to encompass almost 50,000 of the most inspired team members, providing customer experience, digital transformation content moderation, IT life cycle, advisory and digital consulting, risk management and back-office support in over 50 languages for more than 50 delivery centers in 20 countries across North and Central America, Europe and Asia. This significant increase in TELUS International scale, an important and differentiated growth driver for TELUS, will support TELUS' consolidated financial and operating results, including revenue, EBITDA and free cash flow growth. The merger will also support our global leadership in customer service excellence over our world-leading broadband network in Canada. Notably, this transaction substantially increased TELUS International's estimated enterprise value to approximately CAD5 billion, up from CAD1.2 billion just over three years ago. On a pro forma basis, TELUS International's 2019 combined annualized revenue surpassed CAD1.75 billion with EBITDA of over CAD400 million. The acquisition of CCC will be immediately revenue and EBITDA accretive to TELUS and to TELUS International as well as EBITDA margin accretive to TELUS International.

Additionally, given the moderate capital intensity of the combined business at circa mid-single digits, the transaction will support immediate free cash flow expansion. Moreover, the acquisition of CCC further bolsters the continued advancement of TELUS International's successful growth strategy by positioning us well for a potential future initial public offering targeted in the next 12 to 24 months, thereby providing us with a transaction currency to support accelerated, continued growth in the years to come. Looking ahead, we expect TELUS International EBITDA margins to trend on the higher end of the 20% to 25% range, and we anticipate another year of double-digit year-over-year organic EBITDA growth for 2020. We are very excited about the bright prospects ahead for our organization in terms of the opportunities to both grow our customer base and expand services to our current customers as well as those directly stemming from the acquisition of CCC, all of which will propel TELUS International toward our next growth phase.

Let me now turn the call over to Doug to provide some additional details on the fourth quarter and on our targets for 2020. Doug?

Doug French -- Executive Vice President and Chief Financial Officer

Thank you, Jeff, and hello, everyone.

Let's begin with a review of our fourth quarter results, starting with wireless on slide 10. Wireless revenue declined 0.5% and was impacted by certain nonoperational items, including an atypical decline in wholesale roaming revenue in the quarter as well as the lapping of gains on sale of assets in the prior year. After normalizing these, wireless revenue increased by 0.2%. This underlying growth was driven by an increase in network revenue of 1.5% or 2%, excluding the wholesale impact due to a higher subscriber base, primarily offset by a 4% decline in equipment revenue due to more bring-your-own-device loading, increased device financing transactions and intense competition around device promotions, gift cards and subsidies during the holiday season.

Excluding the wholesale roaming revenue impact, mobile phone ABPU growth would have been 0.3% versus the reported decline of 0.1%, and ARPU would have shown a decline of 1.2% versus a reported decline of 1.7%. These trends are being driven, in part, by our new service offerings, including Peace of Mind, Easy Payment, Family Discounts, partially offsetting the reduction in overage revenue and promotional activity. Despite an intense competitive quarter, wireless adjusted EBITDA increased by 6.9% or 8.8%, excluding the previously mentioned items. This reflects higher network revenue growth, lower operating expenses and the implementation of IFRS 16. On a pro forma basis for IFRS 16, adjusted EBITDA increased a healthy 3.1% or 4.9%, excluding the above-mentioned items. On a pre-IFRS 15 basis, which reflects more of a cash contribution, adjusted EBITDA was higher by almost 8% for the quarter, reflecting our consistent approach of focusing on smart, profitable subscriber growth. We saw a strong adoption of our easy-pay plans and started to recover more subsidies than previously.

In wireline -- let's turn on slide 11. In wireline, external revenue was up 6.6% driven by synergistic acquisitions and organic data revenue growth of 11%, primarily driven from organic growth in TELUS International and TELUS Health, increased Internet and enhanced data service revenues, reflecting higher revenue per customer as well as a 6.6% increase in our Internet subscriber base over the past 12 months; increased TV revenues, reflecting growth of 6.1% of our subscriber base over the past 12 months; and revenues from our home and business, smart technology lines of business, including Security. Wireline adjusted EBITDA increased 9.6%, reflected an increased margin contribution from TELUS International, higher Internet margins, higher TELUS Health margins and a growing Security business and the implementation of IFRS 16. In addition, after normalizing for the gains in sales of assets from a period ago, external wireline revenue and adjusted EBITDA increased by 7.6% and 13.3%, respectively, for the fourth quarter. On a pro forma basis, excluding IFRS 16, adjusted wireline EBITDA growth was approximately 2.6% or 5.9%, excluding the asset gains. Notably, once again, we led the industry on wireline EBITDA growth on both the reported as well as an excluding IFRS 16 basis. This reflects the value of our fiber investments and the quality of our unique TELUS International and TELUS Health businesses.

Consolidated revenue and adjusted EBITDA growth continued to be driven by positive growth contributions from both our wireless and wireline operating segments. As highlighted on note 13, consolidated capex was CAD472 million and was up 4.4% compared to Q4 last year, reflecting a capital intensity of 19%, flat to the same period a year ago. At the end of the quarter, more than 2.2 million premises or 70% of our high-speed broadband footprint of approximately 3.2 million premises were covered by our TELUS Fibre network. Free cash flow before income taxes increased 22% to CAD209 million or free cash flow of CAD135 million was essentially unchanged from a year ago.

It's important to remind investors the adoption of IFRS 16 and IFRS 15 is an accounting change only. It does not affect our economic results or financial position or the cash flows of our business. Our free cash flow metric is calculated by adjusting for these items that are non-cash. A summarized free cash flow continuity is in the appendix of our presentation.

Overall, despite the competitive environment, we finished the year with another strong quarter financially and operationally, allowing us to achieve our original 2019 consolidated targets for revenue, adjusted EBITDA and basic earnings per share. With our consistent strategy and market execution, we continue to drive economically accretive customer loading, which will support future profitability and sustainability of cash flow while continuing to offer the best customer service on the best networks. As Darren mentioned, today, we're establishing our industry-leading 2020 consolidated financial targets as shown on slide 15. A list of our 2020 assumptions can be found in our disclosure also provided today.

Consolidated revenue growth is expected to be 6% to 8%, reflecting the continued growth of data services supported by our strategic investments in advanced broadband technologies and our leading networks, in addition to the closed transactions, including ADT and CCC. Our 2020 adjusted EBITDA is targeted to be 5% to 7%. Adjusted EBITDA growth reflects higher revenue, ongoing EBITDA contribution from TELUS Health and TELUS International as well as the continued focus on operational efficiency and effectiveness. In 2020, total restructuring and other costs are expected to be approximately CAD150 million, including certain ADT integration costs. It is also worth noting that the margin contribution from ADT is expected to be below its normal run rate as we incur integration and customer experience improvement costs in 2020. We expect ADT margins to return to normal levels in 2021.

Our leading EBITDA growth rates are inclusive of a higher pension expense due to lower accounting discount interest rates as well as the new CRTC Broadband Fund. Together, these two items impacted our EBITDA estimates by approximately CAD50 million or 1% of growth. We'll expect to continue our investments to support growth in AgTech, where we were adding another element of diversity to our operations, building on the success of TELUS International as well as TELUS Health. As previously disclosed, we are reiterating our capital target for '20 and '21 of approximately CAD2.75 billion per year. Our capex plan reflects the continued expansion of our leading fiber network and positions our converged network for future capabilities the 5G networks will enable while supporting sustainable free cash flow expansion. Our growth targets, combined with our moderating capital expenditures, result in a free cash flow targeted at CAD1.4 billion to CAD1.7 billion. We expect our dividend payout ratio to be 60% to 70% of cash flow on a prospective basis. Importantly, our 2020 financial targets are supported of our multiyear dividend program first announced in May 2011, under which TELUS has achieved 18 dividend increases.

Before I conclude, I want to spend a moment just to discuss an important reporting change coming later in 2020. As highlighted on slide 16 in our disclosure today, we will retrospectively recast our reportable segments later in 2020. Specifically, our current wireline and wireless reportable segments will be placed with two new reportable segments: telecommunications, inclusive of both wireless and wireline; and a segment capturing TELUS International. This change is how we will grow and manage our business and continue to build our converged network technologies. And the commercialization of fixed wireless solutions has made it increasingly difficult to distinguish between our wireline and wireless operation and cash flows and the assets in which they use. Additionally, it is to reflect TELUS International's continued expansion and enhanced scale and significance to our consolidated results as we plan to go public in 12 to 24 months. These progressive changes are now how we will be running, reporting our business into the future and looking at resource allocations. Importantly, we do not anticipate a significant change to the reporting of our products and services revenue, and we'll continue to disclose mobile and fixed revenues as well as KPIs on a subscriber-related results. A preliminary draft of the new reporting structure is available in appendix, and we will look forward to showing you more as we go forward.

Looking out, we remain excited about the future cash flow opportunities across our unique and growing asset base. Our generational and superior fiber build-out continues to lay the foundation for the evolution to 5G positions and TELUS' broadband network among the best globally. We continue to maintain our transparent and leading dividend growth program and our commitment to balancing the interest of all TELUS stakeholders.

Now let me return it back to Robert for Q&A.

Robert Mitchell -- Investor Relations Director

Thank you, Doug. Mike, can you please proceed with questions from the queue?

Questions and Answers:

Operator

Of course. So first question comes from Simon Flannery from Morgan Stanley. Please go ahead.

Diego Alonso Barajas -- Morgan Stanley -- Analyst

Hi, this is Diego Barajas on for Simon. Firstly, how has competitive intensity trended in the early part of the year? And how do you expect that to trend over the back half of the year? Are you also expecting a handset supercycle driven by 5G handsets?

And then second, on EIP, do you expect this to materially drive down subsidies this year or when should we expect that benefit? Thank you.

Doug French -- Executive Vice President and Chief Financial Officer

Yeah. So I'll start off with the second half, and then Darren can talk to the competitive nature as we've currently experienced. We do expect to be recovering more handset subsidy as we progress throughout 2020. We have seen a good traction on the device financing or the easy-pay plans and our unlimited plans, as Darren mentioned in his item, and we're looking to, where else, through our product base. We will continue to roll that out in 2020. So we saw a very good traction on recoverability as compared to the first part of 2019 and we expect that trend to continue and as it moves further into the flanker brands. On the competitive front, it continues to be competitive and, I would say, we expect to be normal course. And I think as the offerings are out there and offering more to our customers at reasonable rates, I think you'll see that as a continuation from 2019.

Darren Entwistle -- President and Chief Executive Officer

We expect, per Doug's comments, that we'll have robust growth in 2020 in the face of a highly competitive environment. I think it would be positive to see a delineation between subsidization. And as it relates to our deployment of unlimited data plan and device financing and to see that delineation hold fast during promotional selling seasons over the course of the year, I think that's the right set of economics for our industry prospectively. But we're expecting, within the context of robust competition, to deliver in 2020 a significant and profitable customer growth, building on the strategy that we've had in effect in terms of profitable customer expansion for the last few years. Without a doubt, we're looking to deliver improvements in network revenue growth over 2020 with growing momentum that takes place throughout the year, seeing ARPU and ABPU stabilize. And then as we work through the rerate, as we get into the second half of the year 2020 in terms of the lapping and break the back of the migrations to see continued expansion in network revenue growth as it relates to profitable client expansion.

Diego Alonso Barajas -- Morgan Stanley -- Analyst

Great. Thank you. And as a quick follow-up on EIP, how much of EIP working capital drag is within the free cash flow guidance?

Doug French -- Executive Vice President and Chief Financial Officer

If you saw in our disclosure, you would have seen that our device financing or EIP plans increased in the period by over CAD300 million. And so part of it was definitely the financing on that, and you'll see a little bit of that into 2020 as well. But at the end of the day, economically, it will drive better outcomes for the long run as we see more recoverability of the subsidy and programs, such as Bring-It-Back, as well are definitely economically accretive on how we manage through that.

Diego Alonso Barajas -- Morgan Stanley -- Analyst

All right. Thank you.

Robert Mitchell -- Investor Relations Director

Mike, next question please.

Operator

All right. Next question comes from Maher Yaghi from Desjardins. Please go ahead.

Maher Yaghi -- Desjardins Securities Inc. -- Analyst

Thank you for taking my question. My first question is on the trends in ARPU degradation that you saw in the quarter. I mean it's an industrywide phenomenon, it's not surprising. Maybe you can maybe talk a little bit about the trends that you see going forward. Have we reached maybe a trough in terms of the pressure or there's still some to be seen in terms of the year-on-year degradation in ARPU?

The second question I had is in your forward-looking segmented reporting changes that you're planning. It's interesting to see that you are looking to remove some of the EBITDA segmentation on fixed and mobile. Can you talk about why this decision at this point? I recognize the convergence of the networks and -- going forward, but there's still some really high-level operating cost that can be split. So maybe just talk about your view and vision on this phenomenon of integration of wireless and wireline, what it will mean to your product sales, operation and marketing.

Darren Entwistle -- President and Chief Executive Officer

Okay. Maher, I'll kick it off and then hand it over to Doug to talk about the segmentation component. Firstly, as it relates to the ARPU and ABPU, as Doug indicated in his remarks, network revenue was impacted in Q4 by atypical non-recurring decline in our wholesale roaming revenue. When you normalize for that roaming impact, the trend is completely consistent with the result that we posted in Q3. To be specific about that, ABPU on a normalized basis would be 0.3% and network revenue growth would be 2%. And I think we're in a pretty stable position right now. The underlying economics from our Peace of Mind, device financing and Family Discounts are all moving decidedly in the right direction for TELUS. And I think that's going to yield ARPU, AMPU stabilization and growth through 2020 that will be reflected at the network revenue line.

I gave you some color during my remarks, but just to give you a little bit more insight into that. We're looking at 50% of total migrations being either step-ups or flat to our business plan. And that original business plan, as I remarked upon, had anticipated 70% step-down. So we're doing better than what we anticipated. And clearly, there's an appetite for larger data buckets, which I think is only going to get amplified as we progress into the 5G environment. Encouragingly, as it relates to the AMPU economics of our business to go with ARPU and ABPU stability, we've seen a 40% improvement in the unrecoverable subsidy spend as compared to our older plans, and I think that's going to pay economic dividends prospectively for our organization, and both particularly well for 2020 and beyond. Encouragingly, we're seeing extremely strong digital adoption. Our digital transactions are up almost 100% on a year-over-year basis, with our smart simplification activities clearly supporting the scaling of better digital results. And I think that bodes well for cost efficiency within our call centers. And also it bodes well for leveraging the digital business that Jeff is building at TELUS International to buttress the economics of our wireless business in Canada. Data usage, as I indicated, right now, within the 4G context is up about 40% on the unlimited plans. We're seeing an average data appetite just over 5 gig and, of course, I think that's going to get extenuated within the 5G construct.

And then lastly, as it relates to smart simplification, it's driving a strong holistic reduction in our operating cost areas, including reduction in contract credits, inbound call volumes through the simplification and the like. And I think that bodes well for our business overall. And so I think, encouragingly, what you can expect prospectively in 2020, it's strong and steady performance as we continue to migrate to the new offerings, again, with our characteristic, strong focus on profitability and cash flow. We expect to see continued growth in revenue, network momentum through the year with ARPU -- ABPU stabilization and accretion, particularly at the AMPU level as we work our way through the rerate, as we lap the launch, as we get into the third quarter or second half of 2020 and as we break the back of the migrations, which will happen within 2020.

So if we can generate results like this in the rerate period, if we can generate results like this in the migration period, I think the second half, in particular, of 2020 looks very attractive indeed in that regard. And again, I would encourage you not just to look at ARPU and ABPU stabilization and network revenue growth, but what it means at the AMPU level because of the simplification characteristics of our Peace of Mind plans and device financing and Family Discounts. And of course, once again, as you relate to the economics of our business holistically, we're seeing a highly differentiated level of retention to a company what we're generating on a per client basis at the ABPU level, generating lifetime revenue results that are 45% to 70% better than our peer group. And I think that bodes well for this organization prospectively.

Doug, over to you.

Doug French -- Executive Vice President and Chief Financial Officer

Yeah. And on the segmentation front, we've been disclosing for multiple years now the convergence that was occurring within wireline and wireless, and that's not just networks. So networks is probably the more obvious one. And especially as we get into 5G delivering high-speed broadband at speeds that are not far off each other, if not identical, allow you to deliver the service in whatever medium you feel fit during that region. But as you looked as well, we've been talking for years as well on how do we continue to integrate our multi-products within homes. And we start marketing and looking at, even our new enhanced, I guess, Security offerings with the ADT acquisition, wireless and Security have definitely synergies that go hand-in-hand. Wireless and Health have definitely synergies that go hand-in-hand. And so as we look forward, we will absolutely be marketing and changing or enhancing the multi-product opportunity that we have through both wireline and wireless that it becomes, in essence, one product set as we look forward.

As mentioned, we will still be reporting some of those items that you referred to. So top line revenue on a product reporting basis for Internet versus wireless will still be an opportunity and still be disclosed. So we will still show net adds. We'll show a data versus wireless revenue on the wireline side, down to probably more of a margin or gross margin level versus rate to EBITDA. And so you'll still have leading indicators of where our growth is coming from and the type of margins to expect because of that. And then we will definitely drive synergies between the G&A levels, which are substantially shared today.

Maher Yaghi -- Desjardins Securities Inc. -- Analyst

Thank you.

Robert Mitchell -- Investor Relations Director

Next question please, Mike.

Operator

Yeah. Next question comes from Drew McReynolds from RBC. Please go ahead.

Drew McReynolds -- RBC Capital Markets -- Analyst

Thanks very much. Two questions from me. First, maybe for you, Doug, on the 2020 guidance. We're all getting some questions on what's organic versus acquisition related. Are you able to unpack at whatever level you're comfortable with on that?

And just a point of clarification on the ADT Canada margin. What kind of margin would you be considered a normal margin just for modeling purposes?

And lastly, perhaps for you, Francois, we've got pretty good detail here on TELUS International. Would love to hear what the outlook is here for TELUS Health looking into 2020. Thank you.

Doug French -- Executive Vice President and Chief Financial Officer

So on your first one, we haven't broken out the organic versus not. I think highlighting the pension and regulatory impact is showing that differential. I think you can take the trajectory all of our assets are continuing to grow, and all of our assets are very strong on that front, as we've talked about in the past. I think when you get to the ADT margin, I think you would assume it would be margins in the wireline zone, so in that zone as being a normal, but it will be definitely substantially lower than that in 2020.

Francois Gratton -- Executive Vice-President, Group President, TELUS and Chair, TELUS Quebec

Thank you, Drew. Francois here. On the Health side of things, I offer the following three points. So first, I would say that we continue to expect Health to be a very exciting area of growth for TELUS. This is on the back of an increasing emphasis on chronic disease management, the enhanced focus that we're seeing in the market place from both consumers and employees alike on optimizing wellness and the benefits of our leading network in innovative technology can deliver in terms of efficiency and effectiveness within the healthcare sector.

Second, I would say, as the leader in the Canadian market, we are really in a unique position when you look at the breadth of assets that we have from electronic, medical and health records, pharmacy management systems, employer health offerings, consumer health offerings, benefit management for insurers and extended healthcare providers and platforms like Canada's electronic prescription service. In addition, we've now increased our reach to include business-to-business virtual care enabled by Medisys and Adera. These two acquisitions with the launch of Babylon by TELUS Health in March of last year are giving us and consumers and employers access to convenient professional care, alleviating the burden on walk-in clinics and emergency rooms and helping over 5 million Canadians without a doctor today. Our fast-growing consumer health business is also enabling us to have more touch points with our consumers in terms of expanding our bundled services for mobility, Internet, TV, home phones, smart security and home automation to now include virtual care and personal medical alert services.

And finally, in terms of financials, we've seen in 2019 our revenue from our health vertical witnessed strong growth. We're reaching now almost CAD800 million. And as a reminder, this is on the back of our health solutions, which make up the majority of this portfolio and the remainder being the broadband services we offer to our B2B health guides. Within health solutions, our EBITDA achieved double-digit growth in 2019, with improving margins that continue to support our broader long-term goal to deliver 35% and our wireline business in terms of margin. And finally, when you look at 2019, I think we're going to continue on the same trend of double digit, both on the revenue side and EBITDA in terms of growth for 2019. As we scale our business through organic growth, partnerships and acquisitions, TELUS Health is well positioned and will be a meaningful contributor to our consolidated financial and operational performance.

Drew McReynolds -- RBC Capital Markets -- Analyst

That's great. Francois, I appreciate the color. Thank you.

Operator

All right. Next question comes from Vince Valentini from TD Securities. Please go ahead.

Vince Valentini -- TD Securities -- Analyst

Thanks so much. So first, Doug, the new segmentation, I assume you're going to give us restated numbers for 2019 and, hopefully, 2018, even on the new basis, so we can build the model and compare. Do you know when we'll get those?

Doug French -- Executive Vice President and Chief Financial Officer

We're planning to do '19 for sure. I'm not sure about '18, but we'll take that away. And it will be before we launch, so you'll have adequate time to redo your models.

Vince Valentini -- TD Securities -- Analyst

But not next day or two. You're talking closer to Q1 release.

Doug French -- Executive Vice President and Chief Financial Officer

Yeah. It's not the next day or two. It will be months.

Vince Valentini -- TD Securities -- Analyst

And when you say, the TELUS International segment, is that just TELUS International, the 62% owned entity or is there any other 100% owned TELUS operations that get included in there?

Darren Entwistle -- President and Chief Executive Officer

It's just TI, just that. Yeah.

Vince Valentini -- TD Securities -- Analyst

So healthcare is still within fixed revenue for now?

Darren Entwistle -- President and Chief Executive Officer

That's correct.

Vince Valentini -- TD Securities -- Analyst

Okay. And bigger picture questions just on ARPU and service revenue trends. Correct me if I'm wrong, maybe probably for you, Darren. On the Q3 call, thought I'd heard you guys talking about being gradual with the movement to unlimited plans and easing off of the overage revenue at a more moderated pace than one of your competitors. Your commentary today seems to suggest that, by Q3 of this year, you would have lapped most of the migration cycle and start to get back to favorable year-over-year conversions on total ARPU and implied overage revenue impacts. Is that the case? Is the overage revenue going away a bit faster than what you may have thinking on the Q3 call?

Darren Entwistle -- President and Chief Executive Officer

No. I think that would be an erroneous conclusion, Vince. I think it's not going away faster. The key takeaway on overage is that our exposure on overage is de minimis. And we're basically in the position now where we have broken the back of that particular challenge. The comment that we're making related to 2020 really just has two components. One is we'll get a year-over-year obvious lapping benefit as we get into the Q3 period of 2019 given the launch of Peace of Mind at the start of Q3 in 2018 -- 2019, rather.

And then, of course, we will have broken the back of the migration challenge over the course of 2020, which will expose us to greater and greater economic accretion that you'll see in terms of expansion at the network revenue level and stability and accretion as it relates to our ABPU and AMPU economics and an increased improvement in overall profitability as a result of that, particularly with the amplification of data growth within the 5G construct. That's why we felt it was important to talk about the fact that we're seeing fewer step-downs, talk about what progress we've made as it relates to the unrecoverable subsidy component, which is going to be an increasing economic contributor for us and, as well, the significant data growth that we're seeing, averaging out now over the 5 gig level and, in particular, cost efficiency, cost efficiency and cost efficiency as we have significantly simplify our wireless business model in this regard in a way that fits very well with customer expectations that are out there from quality of service through to affordability constructs.

The other thing, I think, that's important is that we're not seeing that this is all going to come post the lapping and post breaking the back of the migrations. What we're seeing is we'll deliver strong results pre the lapping, so we'll deliver that. And I think these results reflect that, and we can deliver strong results through the migration period. And I wanted to emphasize that particular component. And if you go back and have a look at a wireless cash EBITDA construct for Q4, we almost see an 8% on wireless cash EBITDA growth for the quarter. And for the full year, we're in the circa 7%. So I think that's pretty good going overall as we are in a transitional period.

And then lastly is the free cash flow story component, when you look at improving economics, both in terms of profitable top line, but flow through to the EBITDA line in both our wireless and our wireline operations, when you look at the increasing contribution from TI at the EBITDA level and complement that with a moderating capital appetite, I think we've got a strong free cash flow story, not just for 2020 at greater than 80%, including taxes, and 33%, excluding taxes, but a propagation of that story in terms of chronic, strong growth in cash beyond 2020 because of the EBITDA growth complement against the moderating capital appetite and seeing that growth coming from wireless, wireline and TI. And so that's really the comment in terms of the ARPU, ABPU, AMPU flow through to the overall wireless economics, complementing that with wireline and TI.

Vince Valentini -- TD Securities -- Analyst

Okay. Thanks for that. And last one, Doug, for you. It looks like EPS guidance is not on your list for this year, but can you give any color on that metric? Last year, EBITDA growth was good, but D&A expense went up by almost as much. So EPS only went up CAD0.01. Do some of this better EBITDA and free cash flow growth in 2020 translate into better EPS growth as well?

Doug French -- Executive Vice President and Chief Financial Officer

We didn't have that in our projection at the moment. We did disclose depreciation and amortization, though, in our assumption. And so maybe we'll just take that off and get back to you on the exact rough measure.

Vince Valentini -- TD Securities -- Analyst

Thanks.

Darren Entwistle -- President and Chief Executive Officer

The alignment there, Vince, was just really realigning with the industry in terms of expectations that they're setting with the Street, having drifted from EPS to cash flow. And so we thought that, that was appropriate. And then secondly, given the dividend growth model is such a big component of the TELUS story, the fact that we're doing the dividend payout ratio range as a percentage of cash flow at the 60% to 75% zone and talking about the type of dividend accretion that we want to deliver over the next three years, we thought that, that was a better metric construct to guide the Street toward.

Robert Mitchell -- Investor Relations Director

Thanks Vince. Next question please, Mike.

Operator

All right. Next question comes from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.

Aravinda Suranimala Galappatthige -- Canaccord Genuity Corp. -- Analyst

Thanks for taking my questions. Two from me. The first, Darren, on 5G. I was wondering if you can generally provide a road map from here on. Obviously, you've talked a lot about the significance of fiber there and we have a sense of the spectrum auctions. But when you think about radio equipment, when you think about the transformation of the core network and the upgrades that are required there, can you give us a sense of what the sort of the milestones are from here on and the time line?

And then secondly, with respect to TELUS International, I was wondering if you can talk to sort of the revenue mix there, thinking about the mix of digital, or call it, IP-type services, arguably, the high-growth segments within that. Are you satisfied with that mix or do you think that needs to progress a little bit more before sort of moving ahead to sort of an IPO stage, call it? Thanks very much.

Darren Entwistle -- President and Chief Executive Officer

Progressing that particular digital metric for TI is the essence of the TI story, and I'll hand over to Jeff to talk about that in a minute. I'm not going to pre-announce our 5G launch plans for competitive reasons. I think it's important to kind of convey the mentality at TELUS, which has consistently been an etiology that says to us, let's focus on getting the execution right from day one. And then let's couple that with the announcement. And it really is the way that we operate. So when we launch 5G from a network readiness to device availability to speed accretion, then the press release will go out that morning. So clearly, this is something that we're going to do in 2020. I'm just not going to step beyond that from a specificity point of view. But when we do it, we want to make sure that we can offer an experience where the network speeds are distinctly better than our globally leading industry speeds on LTE Advanced Pro leveraging the advent of the first foray on the network technology front. And you can look for greater specificity and definition in that regard in the months to come from this organization.

As it relates to what is really an excellent question that you're asking, I think it's important to guide the Street that the progression on 5G is not a sprint, but rather a marathon. And some of the most meaningful capabilities that relate to 5G are going to emerge gradually and sequentially as larger channels of key 5G ecosystem spectrum comes available, most obviously, 3.5 gigahertz and millimeter wave spectrum. Also as that spectrum availability takes place within large channel swaps, we're going to be, of course, building on our core 5G network architecture that importantly -- there's not a lot of discussion of this, but importantly, that's coupled with our EDGE computing deployment within that world and leveraging our deep and pervasive fiber infrastructure that, of course, within the 5G world is of paramount importance, as it does the front-haul delivery and backhaul redistribution of the wireless 5G traffic.

And then finally, I think what has been a nice critical differentiator for TELUS as we progress from 2G to 3G to 4G to 5G is our next-generation network sharing framework that allows us to execute new technology deployment at a level of speed, at a level of pervasiveness and at a level of cost efficiency. That's the competitive advantage for this organization. It has been historically, and I would say the past will be precedent in that regard.

So the three key components that I would draw out in terms of the road map is watch for key spectrum coming available. Really, the global ecosystem on 5G is at the 3.5 gigahertz level. And the channels are getting larger, and you need that as it relates to speed and latency consideration. The same is true on millimeter wave, particularly with millimeter wave being used as an alternative access mechanism on point-to-point wireless access connectivity to complement our broadband fiber expansion that we've been undertaking, look for interesting developments in 5G network architecture and the distribution to the EDGE of our computing power, processing power in that regard and always think about wireless in combination with fiber and how those two things set you up for competitive success prospectively.

It's also important to begin having a better dialogue, and I don't think we've done a good enough job in this regard, as it relates to 5G potency and pervasiveness being critical for Canada's economy and society. Our industry is not really a vertical. It's more of a horizontal underpinning both the private sector and, of course, Canadian society in a larger context. And 5G is going to drive significant improvement as it relates to productivity, innovation, efficiency and, importantly, digital transformation and the huge data swaps that are going to be using. That wide-band capability are going to give both businesses and societal considerations the ability to leverage dynamic insights within an artificial intelligence world. And if we can do that, not just in the private sector, but support what we want to do on health and education and the environment and bridging socioeconomic digital device, I think that's going to be a great thing. And really the mantra for us, and this is important because at TELUS, this is endogenous, it's an action within an organization. As we progress into 5G, we want to still be, obviously, the global leader in wireless technology, and we don't intend to yield that distinction. It's as important to our company as it is to our country. And we're going to be extremely thoughtful as we progress through the road map that I just shared with you and as we enjoy those benefits in terms of speed, reach and latency considerations and all the applications that 5G will enable.

Jeff, over to you.

Jeff Puritt -- Vice-President and TELUS International President and Chief Executive Officer

So on the mix of revenue in TI, there is no doubt that we want to continue to evolve and increase the native digital nature of our service revenue. But I think, as more visibility is provided in connection with our business, anticipate some pleasant surprises in terms of how much progress we've already made on that front, I think we're already sub-30% of our revenues derived from legacy voice-based customer care services. We're already well evolved to north of 50% of our business being digital-centric, whether it's proprietary AI platforms; building bots, both transactional and informational for our customers and for ourselves; providing big data and analytics solutions; helping move our customers from legacy premise-based applications to the cloud.

We've got literally hundreds of bots and RPA solutions that we've been deploying to our customers and for ourselves and are continuing to evolve our business mix, so that we can take advantage of these macro transformational dynamics that are taking place in terms of digital adoption really end-to-end. Unlike some of our peers, though, we don't anticipate legacy human-assisted care disappearing. But rather, we take a bifurcated approach where we see the digital bias as a copilot to our highly trained, highly skilled human population being capable of real-time interacting with technology and next-gen solutions to provide the best possible experience for our end-user community. And the relationship with TELUS has really been sort of the genesis of our thinking in this regard. And we get to test drive, if you will, and pilot these solutions on behalf of our parent company and then take those solutions to market when they've been heartened with a pretty exciting referenceable customer to endorse the success that we're having.

Aravinda Suranimala Galappatthige -- Canaccord Genuity Corp. -- Analyst

Thanks very much. Very helpful.

Robert Mitchell -- Investor Relations Director

Darren, I'll hand it over to you for any final remarks before we wrap up the call.

Darren Entwistle -- President and Chief Executive Officer

Thanks, Robert. Just some color in terms of guidance for 2020 and I think what the investment community should look forward from us. On the strategy front, more of the same with amplified execution that's going to deliver amplified results in 2020 over 2019. I think you can expect to see a strong performance from all three of our assets; wireless, wireline, and TI, and some very interesting developments within the emerging areas for us at Health and AgTech. It's going to be continued focus on profitable subscriber growth. And I would look for TELUS to deliver robust and profitable and significant customer expansion in 2020, doing that by leveraging both our network assets and our customer service excellence, but also leveraging what's become a growing portfolio of new services at TELUS that's yielding that profitable subscriber growth. We've got new services on the health front. We've got exciting new services on the security front. We've got great new services as it relates to IoT. That will be at a premium as 5G comes to fruition. And we'll also see new services on the B2B front as we leverage Wave 3 solutions like software-defined wide area networks.

I think you can look for us to deliver improving network revenue growth throughout 2020, AMPU, ARPU stabilization to an accretion phase that we go through as we digest the rerate, as we lap the launch of Unlimited, as we break the back of the migration, and we move from strong transition-based results to very accretive forward-looking results in that regard and see it reflected in our key KPIs on the network revenue level and the AMPU, ARPU level. I think you can look for a strong organic performance coming out of both TI and TELUS Health, as Jeff and Francois had the opportunity to allude to. I think a story that's a little bit muffled within TELUS is the turnaround within our B2B wireline business. That's been dilutive to our EBITDA results for five consecutive years. We're looking to get to EBITDA neutral and EBITDA accretive in 2020 as it relates to our B2B wireline business, and I think that's a nice attribute of our economic growth prospects going forward.

We're going to get a clear top line benefit from ADT and CCC. But I would caution you, as it relates to ADT, let's be a little bit conservative about it. TELUS adhered to stressed asset when we bought ADT. We bought it at a reasonable price. We've got work to do to invest in that asset, to turn it around. That will mitigate its economic contribution in 2020, but will set up a strong economic contribution in 2021 and beyond as we significantly scale our Security business and as we harvest security efficiencies by bringing that particular asset portfolio into a harmonized state. We're excited, as Jeff said, about CCC as it relates to revenue growth and EBITDA margin expansion coming from that business.

And then lastly, maybe to conclude, we're obviously not taking our eye off the ball as it relates to efficiency and effectiveness at the TELUS corporate level. So on the efficiency front, always, always, always be front of mind, whether it's wireline, whether it's wireless, or even within Jeff's emerging area on the TI front, we've upped our restructuring investment to CAD150 million. We think it's the right thing to do to invest in those efficiencies. And we'll be driving significant J curves that, I think, are going to yield future growth again in the ADT area, in the B2B area and in the emerging AgTech business, but I think will provide long-term great economics, great diversification. And it's all leveraging our telecom technology and 5G and fiber capabilities in a very meaningful way.

So thanks for your support. Appreciate it.

Robert Mitchell -- Investor Relations Director

Thank you, Darren, and thank you, everyone for taking the time to join us today. Please feel free to reach out to the IR team for any follow-up questions. Mike, back over to you.

Operator

[Operator Closing Remarks]

Duration: 80 minutes

Call participants:

Robert Mitchell -- Investor Relations Director

Darren Entwistle -- President and Chief Executive Officer

Jeff Puritt -- Vice-President and TELUS International President and Chief Executive Officer

Doug French -- Executive Vice President and Chief Financial Officer

Francois Gratton -- Executive Vice-President, Group President, TELUS and Chair, TELUS Quebec

Diego Alonso Barajas -- Morgan Stanley -- Analyst

Maher Yaghi -- Desjardins Securities Inc. -- Analyst

Drew McReynolds -- RBC Capital Markets -- Analyst

Vince Valentini -- TD Securities -- Analyst

Aravinda Suranimala Galappatthige -- Canaccord Genuity Corp. -- Analyst

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