Dennis Mathew: Thanks, John. I’ll take the mobile piece and then Marc, welcome to chime in on the pricing and ARPU elements. But mobile, we’re very pleased with the transformation and the acceleration. This has really been inspecting and optimizing every area of the business. We’ve transformed our retail centers into sales centers and we’ve really prioritized, as we’ve said, to be the connectivity provider of choice, which includes broadband and mobile. And so, we’ve updated our compensation plans. We’ve updated our sales goals. We’ve transformed performance management and participation, Optimum Complete and including that as an offer and a package has been really well received both by our frontline teams as well as our customers.
And so, as I think about this year, I think about continuing to drive acceleration and growth in that space. I think we’ve seen others, some of our peers set the standard in terms of net additions per quarter and customer penetration of their base. And I think those are all achievable long-term and that’s the journey that we’re on. And so, the 8x acceleration, we’re going to continue to drive that across the business. And, I think we’re at 7% mobile penetration of our base today. I think there’s more opportunity. I’m particularly excited as Marc, I believe mentioned 20% annualized churn reduction with mobile. And so, there’s lots of reasons to continue to drive mobile and will continue to drive acceleration throughout the year. Marc?
Marc Sirota: And then John, on the ARPU declines, now we feel like we’re in a good position as you saw with the trends. Certainly there’s going to be continued pressure from video losses on ARPU, but despite that and our more disciplined approach in leveraging AI tools, We do feel like we have a path to stabilize ARPU and grow it over time. If you look at 2023 for the full-year, we were down just 1.5% year-over-year relatively flat especially coming out of the back half. We expect to improve on this in 2024. So, we feel like we have the right tools in front of our agents to drive the right outcomes. And, feel good about that.
John Hodulik: Thank you, guys.
Operator: Thank you. Next question today is coming from Jessica Reif Ehrlich from Bank of America. Your line is now live.
Jessica Reif Ehrlich: Two questions, if it’s okay. One, I just love your views on the sports JV that was announced with Disney, Warner Brothers, Discovery, and Fox. Just how that you think that impacts your business, video and broadband and how it might impact renewal conversation? And then separately, you showed good growth in advertising, ex-political and news, could you talk about where that’s coming from and kind of your outlook in the, I guess, couple of quarters ahead?
Dennis Mathew: Jessica, I hope you’re well. I’ll take the sports JV question and Marc, if you want to talk a little bit about news and advertising. I think I’ve said this before, but unfortunately I’ll reiterate that I really do think that the model is broken and it’s really challenging when you think about the fact that viewership is that all-time lows on linear traditional video and yet rates are at all-time highs. And so, I think we as distributors really do need to work with our partners to put the customer back in the center and make sure that they’re getting the right value. And so, as we have these conversations and negotiations, that’s exactly what we’re trying to do. We’re trying to really push hard and make sure that we’ve got, we’re fighting for our customers in terms of rate.
Historically for legacy process has been to include channels with extremely low viewership bundled in with channels with high viewership, it’s just not the right approach and inflexible packages. And so, we’re fighting for more flexibility as well, so that our consumers can ultimately have the types of bundles and packages that they’re looking for. And then as these direct to consumer solutions continue to become available, having those conversations, making sure that they’re available to our customers and that they can be leveraged as part of the portfolio of solutions that we are making available. And so, these are the conversations that we’re having. It really does come back to putting the customer at the center and making sure that we have the right pricing, the right packaging, the right channel lineups, the right direct-to-consumer offerings.
But, ultimately for all these solutions, you need broadband. So, it does strengthen the value of broadband and we want to be able to provide the highest quality broadband quality and price and one of the top applications leveraged on broadband is video. And so, we want to be able to make the right video solutions available and that’s what’s driving the consumers as they have some want to watch traditional linear video, others want streaming. We need to be able to bring that to our consumers at the right price and at the right value and those are the conversations we’re having. Marc?
Marc Sirota: And then on advertising, certainly 2023 was a challenging year for all of us in the ad space, but really pleased on how the segment operated this year and managed through that. We were able to offset some of those declines by just expanding actually our customer base and still having more customers. And then really some thoughtful investments in our advanced advertising agency business is really were the accelerant to drive the growth that you have seen over the past few quarters. So, as we look ahead to 2024, we feel positive about where we’re trending it’s certainly going into the new political year, it should be a pretty good tailwind for our news and advertising segment.
Operator: Thank you. Next question is coming from Craig Moffett from MoffettNathanson. Your line is now live.
Craig Moffett: Hi, thank you. I’m going to see if I can squeeze into as well. First, I know you guys, especially Tony, you’ve spent a lot of time talking about ARPU I wonder if I can just dig in one last time maybe on just broadband ARPU specifically, even though it’s growing year-over-year, it took about a 1.6% sequential decline, granted that bundling, allocations and that sort of thing can fuzz that up a little bit. But I wonder if you could just talk about whether that is, indicative of anything that’s happening with respect to the base management program that you described? And then second, if you could just talk a little bit about your mobile economics. We don’t know much about your MVNO and the larger MVNO in the industry is shrouded by a lot of secrecy. I wonder if you could just share some at least directional guidance on the kind of margins you expect to be able to make in that business at least at the gross margin level?
Dennis Mathew: Craig, hope you’re well. Let me let Marc jump in on the broadband ARPU question and I’ll talk a little bit about mobile.
Marc Sirota: Yes. Hi, Craig. From a fourth quarter perspective, this is usually a low point for the year as far as customer roll-off and promotional roll-off, increased promotional activity happens typically in the fourth quarter, so this is usually a seasonally low quarter for us in this space. I’m pleased to see that we were able to moderate the fourth quarter seasonality that we’ve seen traditionally pretty meaningfully and so although down, I would it’s not indicative of the price changes that we announced here at the beginning of the year. So, feel good we have the right tools in place to manage through that.
Dennis Mathew: Yes. We’re very happy with our mobile MVNO and our partner in having access to the largest 5G network. Our mobile margins, we’re also happy that we are gross margin positive. We don’t break out additional detail, but we’re really happy with the performance. We continue to see acceleration as I mentioned meaningful acceleration in our sales activities also in terms of attaching lines. We’ve been able to grow that to now 1.5 lines and there’s more upside as we just start continue to get our legs under us. We have today about 50-50 in terms of BYOD and device attach. And so, there’s opportunity there to continue to right size that and continue to lean in as we again, get our sea legs under us. And so, we’re in the early inning.
We’re really just starting to sell accessories and insurance, but we’re excited particularly about the churn benefit as I mentioned and we’re excited about continuing to drive mobile as there is long-term margin expansion opportunity.
Marc Sirota: And the only thing I would add is just on the ARPU side from mobile perspective, we are seeing growth in that as well. One, coming off the fact that we’re no longer selling free services but then also with Optimum Complete we’re really starting to see meaningful growth in the ARPUs coming out of that bundle package up $5 actually sequentially from the third quarter. So, all signs are going in the right direction.
Craig Moffett: Thank you.
Operator: Thank you. Next question is coming from Vikash Harlalka from New Street Research. Your line is now live.
Vikash Harlalka: Hi. Thanks so much for taking the question. Now, that you’ve raised $2 billion in debt, how do we think about any potential ABS debt? Is that completely off the table or I see working on that. And if you do, what would be the potential usage of those funds? And second one, if I could, could you give us a sense of what the IRRs are for the new builds versus fiber upgrades? And how you sort of decide whether we go for additional new build versus fiber upgrades during the year? Thank you.
Marc Sirota: Hi, Vikash. I can take both of these. As it relates to the $2 billion refinancing really pleased that we were proactive and we cleared the deck for the next three years for us to operate especially given the uncertainty around the interest rate markets and where they’re heading into this year. As it relates to ABS, we certainly have learned more about the process involved in an ABS transaction and just this as you may know just takes time and so I still think it’s very much a possibility. But, now that we’ve cleared out the near-term maturities, we have a little bit more flexibility in getting the timing and the sizing done properly. So still out there, but it just takes time to do that. And then as it relates to IRRs, we just have not historically disclosed those externally, but especially as you think about the fiber builds, we’re definitely seeing improved results coming out of that from churn reduction to ARPU lift all of which are better than our original base case scenario, but again we’ll just remain disciplined around the level of capital intensity to drive ultimately free cash flow and invest the next dollar in the spot that’s going to give us the highest yield.
Dennis Mathew: That’s right. The only thing I’ll add is that, as we’ve done with every part of the organization, we are revamping and evolving our ability to identify, deliver, execute, deliver and drive penetration of new builds. And so, as I mentioned, we have four of the fastest growing markets in our footprint. And so, these are good problems to have in terms of driving making investment decisions.
Operator: Thank you. Our final question today is coming from Bryan Kraft from Deutsche Bank. Your line is now live.
Bryan Kraft: Hi, good afternoon. I want to ask you, I guess, the $16 billion to $17 billion CapEx guidance combined with the capital intensity guidance implies a pretty wide range.
