Reasons to invest
Our hybrid fiber-coaxial (“HFC”) cable network spans the Flanders region, covers approximately 61% of Belgium by homes passed and includes the metropolitan centers of Antwerp and Ghent and approximately two thirds of Brussels following the acquisition of SFR Belux, which we acquired on June 19, 2017. Our cable network (the "Combined Network") consists of a dense fiber backbone with local loop connections constructed of coaxial cable with spectrum used up to 1.2GHz, powered by the EuroDocsis 3.0 and 3.1 technology with data downstream speeds of up to 1 Gbps across the entire footprint. We own around two-thirds of the cable network in Flanders and Brussels, while operating the remaining one-third through a long-term emphyotic lease with Fluvius until 2046.
Our mobile network consists of 3,200 macro sites, covering the whole of Belgium. we invested around €250 million since the acquisition of the third-largest mobile operator BASE in 2016 to modernize existing sites. On top of this, up to 1.000 additional relay sites will have been built by end-2020. This positions our mobile network as one of the best performing according to BIPT data from October 2020, with average down -and upload speeds of nearly 100 Mbps and more than 25 Mbps respectively. We also successfully launched new Voice-over-WiFi -and Voice-over-LTE services, improving indoor coverage and delivering HD sound quality.
The ARPU per customer relationship, which excludes our mobile telephony revenue and certain other types of revenue, is one of our core operating statistics as we seek to obtain a larger share of our customers' telecommunication and entertainment spending. In Q1 2021, the monthly ARPU per customer relationship reached €59.8, representing a solid 3% increase compared to the prior year period. Growth in the ARPU per customer relationship was underpinned by (i) a greater share of higher-tier broadband subscribers in our mix, (ii) the favorable impact of the October 2020 price adjustment, (iii) a higher proportion of multiple-play subscribers and (iv) a relatively lower proportion of bundle discounts (including fixed-term promotions). The year-on-year trend in the ARPU per customer relationship is also no longer distorted by the bundle revenue allocation, which changed as of Q1 2020.
Our FMC customer base, which represents the sum of our "WIGO", "YUGO" and "KLIK" propositions, reached 660,500 subscribers, up 15% year-on-year. In Q1 2021, we added another 18,700 net new FMC subscribers. In these changing times, we want to support our customers more than ever in their digital needs. With the launch of our brand new FMC bundle product line, called "ONE", we break down the limits that customers have been confronted with until today. We are abandoning the 'one size fits all' idea behind the current bundles, and are opting for a modular approach in which customers choose what they need. Customers can now have mobile and fixed internet without data limits, and the distinction between consumption via 4G and Wifi has disappeared. Customers can make three choices: (i) what speed they want at home (150 or 1000 Mbps) and outdoors (30 Mbps or more), (ii) how many SIM cards they need and (iii) whether they still want television and if so, how they want to watch-- either via the Telenet TV box or via the new Flow app. Each customer who is a part of ONE receives an extra data SIM card, which can be inserted in a tablet, but also fits perfectly in a Minimodem. With this new device, customers can create a personal hotspot for up to ten devices anytime, anywhere.
Our operating expenses, which include our (i) network operating expenses, (ii) direct costs, (iii) staff-related expenses, (iv) sales and marketing expenses, (v) outsourced labor and professional services and (vi) other indirect expenses, decreased nearly 2% on a reported basis for the nine months ended September 30, 2020 despite the inorganic impacts from the De Vijver Media acquisitions (fully consolidated as of June 2019) and the divestment of our Luxemburg cable business to Eltrona in which we currently hold a 50% minus 1 share shareholding (deconsolidated as of April 2020) and changes to the IFRS accounting outcome of certain content-related costs for our premium entertainment packages and the Belgian football broadcasting rights because of changes related to the underlying contracts.
On a rebased basis, our Q1 2021 operating expenses decreased well over 5% compared to the prior year period. This was predominantly driven by a 16% rebased decrease (€24.4 million) in our direct costs. Higher staff-related expenses in the quarter were more than offset by (i) 25% lower costs related to outsourced labor and professional services and a (ii) 4% reduction in sales and marketing expenses, both on a rebased basis, as described further below.
Over the past years, we have proven our ability to convert a stable and well-balanced top line into robust Adjusted EBITDA and Adjusted Free Cash Flow growth. We aim to deliver sustainable profitable growth over the 2018-2021 period, targeting an Operating Free Cash Flow CAGR of 6.5 to 8.0% over the 2018-2021 period. Our outlook excludes the recognition of capitalized football broadcasting rights and mobile spectrum licenses and excludes the impact of IFRS 16 on our accrued capital expenditures. The healthy growth in our Operating Free Cash Flow should drive sustained Adjusted Free Cash Flow growth over the period.
Considering the robust underlying Adjusted Free Cash Flow conversion and the healthy Operating Free Cash Flow outlook for both FY 2020 and the 3-year period over 2018-2021, the board of directors has decided to firm up the existing shareholder remuneration policy. Our new policy aims to achieve a balance between attractive shareholder distributions on the one hand, while preserving optionality for value-accretive M&A opportunities in the future on the other hand. While the 4.0x net total leverage target has been reaffirmed in absence of any material acquisitions and/or significant changes in our business or regulatory environment, the board of directors has introduced a dividend floor of €2.75 per share (gross) going forward. This dividend floor assumes no significant changes in our business or regulatory environment and replaces the previously communicated 50-70% pay-out range. With that, the board of directors intends to commit a larger share of the Adjusted Free Cash Flow towards recurring dividends. The remainder of our Adjusted Free Cash Flow may still be considered for accretive acquisitions, extraordinary dividends, incremental share buy-backs, deleveraging or a combination thereof.
The April 2021 AGM approved the payment of a gross dividend of €1.3750 per share, to be paid in early May. In December 2020, we paid a gross intermediate dividend of €1.3750 per share (€150.0 million in aggregate), representing half of the aforementioned dividend floor. Yesterday, shareholders approved the payment of the remaining gross dividend of €1.3750 per share (€150.2 million in total1). The dividend will be paid on May 5, 2021 with the Telenet shares trading ex-dividend on Euronext Brussels as of May 3, 2021. Including the payment of this dividend, the total gross dividend paid equals €2.75 per share, or €300.2 million in aggregate, up 47% versus the dividend per share paid over the FY 2019 Adjusted Free Cash Flow. With that, we continue to execute on our anticipated shareholder remuneration timeline including the aforementioned dividend floor.
1 Based on 109,243,261 dividend-entitled shares outstanding at the date of this release.