Pascal Desroches: Remember, we guided that as a result of the Ericsson Open RAN deal, we would have accelerated depreciation associated with some of the equipment that was previously in our network that we were going to depreciate over shorter lines. That’s a dynamic you’re seeing come through there. I feel really good about the overall expense management and overall cost profile and you see that coming through in our EBITDA margin expansion in that business.
John Stankey: And Peter, we broadly, as I indicated in my remarks that we see Internet Air for business being a national product. You probably maybe noticed that you may not be a golfer, but you noticed during the masters, we kind of previewed some of our advertising that will be coming out on the product that’s geared toward the business market segment. And it doesn’t mean that it’s a product for every business, but it certainly is a product for every state is what I would say. We want to be mindful of making sure that we match the product to businesses that have the right usage characteristics that we think we can provide a quality level of service and right value. There are many businesses that match that, and there are many businesses that have usage characteristics and behaviors that are atypical to a typical single-family dwelling.
And that’s why we think it’s a good place to invest time, energy, money. And I think that was consistent with what our expectations were from the founding of the product and where we thought we’d go to market with it.
Peter Supino: Understood. Thank you.
Brett Feldman: Operator, we’ll take next question, please.
Operator: Bryan Kraft of Deutsche Bank. Please go ahead.
Bryan Kraft: Hi. Good morning. Thank you. John, can you talk about how you’re balancing the marketing and sales budget today between customer acquisition and retention and how that’s driving AT&T’s performance relative to your competitors? I think one of the concerns we often hear from investors is that while churn has been great, gross adds have been down for several quarters, but I suspect this is at least partly a function of the strategy. So if you could shed some light there, that would be great? Thanks.
John Stankey: Good morning, Bryan. You’ve answered your question. It’s intentional with the strategy. I’m more than happy to take gross in places, where I think I can drive gross profitably. And I think in some cases, we have to think about how much people are paying for growth, and then we also have to think about gross and we have to think about whether or not that gross really has yield on it, if it’s what the end user is paying ultimately when they come on a network. And so, I think some of the numbers ultimately are what I refer to in my opening remarks, a bit low calorie. I don’t really want to play in the low calorie space. I want to make sure I’m getting my fair share of the high calorie subscribers, and that’s why we’re focused on share of service revenues as maybe being a better benchmark of is the company balancing its growth in the right way?
And when you think about how we balance our budget and what we do internally is we’re pretty rigorous around asking ourselves those questions and the segments we attack, how we go after and the longevity. And look churn’s a key driver when you’re investing for that growth. And I’ll take lower churn all the time. I don’t think that’s a bad sign necessarily. I’m perfectly okay with where we stand on that front. We’ve talked previously, Bryan, that one of the things I like about where we’ve been in the market and that I think is, frankly, sustainable probably 1.5 years ago or 2 years ago, most of the questions on this call is where’s the growth coming from? And I kept saying the growth was balanced. It’s coming from a lot of different segments.
We’re seeing it come from different parts of the business community, and we’re giving you the fact that our business growth has been strong. We like what we’re picking up in the residential environment, in the consumer environment, and where we see our growth coming from there in terms of what we’re taking. So we have a pretty balanced approach to our distribution right now that I think that diversity is helpful. It diversifies our portfolio. It diversifies the base. And that’s one of the reasons why the churn numbers are as strong as they are.
Bryan Kraft: Thank you.
Brett Feldman: Operator, we’re ready for the next question?
Operator: David Barden of Bank of America. Please go ahead.
David Barden: Hey, guys, thanks so much for taking the question. I guess, first, a follow-up question, if I could. John, thank you for your comments about kind of having digested the impact of the outage, but the postpaid phone ARPU was obviously down about a little over 1% in the quarter, and I’m assuming at least some, if not all, of that had to do with the credit and the GAAP accounting for that. And so, I was wondering if we could get a — maybe Pascal, a jumping off point from where ARPU really is if we normalize for that credit. And then second, another kind of housekeeping question is, with the sale of Sky Mexico back to, I think Televisa, what happens now? Like how does that affect the reporting, as we think about the rest of the year? Thank you.
Pascal Desroches: All right. Hey, Dave, I can take both questions. First on postpaid phone ARPU, I’m assuming you’re citing the sequential trend as opposed to year-over-year because we grew year-over-year. The sequential trend, a couple of things to keep in mind. Yes, the credit was a factor. But it was — it’s part of the mix and we told you at the time it was not significant, but it was still a factor in sequential trends. And the other thing to keep in mind, too, is there is seasonality associated with international roaming, that there are periods, where international roaming is going to be higher than not, and that impacts ARPU as well. Overall, we feel really good about the guidance we gave for modest ARPU growth for the year. So nothing substantive there. And your second question was remind me.
