And so if I think about I can get more scale, more households faster in places where the construct is very straightforward, the amounts and the plays to run are getting more scale in existing areas, that’s what weighs against your incentive to invest. And I think states that understand that are coming up with smart policies to try to be competitive with that and states that don’t understand that are probably going to have pretty voluminous and deep requirements that ultimately cause private capital to maybe shy away from matching in some of those areas.
Simon Flannery: Great. Thanks for the color.
Operator: And Phil Cusick of J.P. Morgan. Please go ahead.
Phil Cusick: Hi, guys. Thank you. John, maybe talk about pricing in wireless this year. Verizon just ran through another one. It seems like the inflation driven wave of general consumer price increases is slowing. Do you think there’s more room to take a little more price in the postpaid space? And then maybe just expand on the AT&T Air effort. How much does this scale over time and how many more markets do you think are possible this year? Thank you.
John Stankey: Good morning, Phil. So look, I’ll give you the same answer on pricing I think I probably give every time I’m asked it, and I just suggest there is a string of data points to go back and look at to kind of buttress up my observations on this, which is, we’ve been pretty deliberate about where we think we add additional value into our customers and whether or not we can ultimately drive price changes that are aligned with driving that incremental value. And as I mentioned earlier, we’ve invested a heck of a lot in our networks. People are using over 30% more of it per year. They are getting more utility out of what we do, and the capability of the networks is allowing them to do more things in more ways. And as a result of that, I think that value is allowing us to go in, in places and certainly drive some renumeration for the level of investments that we’re putting in.
And you see it in our ARPU growth. I think we’ve shared with you that we expect probably some modest ARPU accretion in our guidance as we move through next year in the wireless space. Some of that will come from moving people up to higher priced plans with more bells and whistles, and some of it will come through pricing movement. I would tell you, I go and I rest on our track record. You’re seeing the numbers, you’re seeing what we’ve been able to do. I think we can continue to run many of the same plays that we’ve run, and we’re doing it with, I don’t know, we may end up with another record churn quarter or best in industry churn quarter. We’ll be darn close to it, and we’re doing it at levels of ARPU performance in the market that I think is pretty stellar.
So my message is, I think we know how to do this. I think we’ve done it pretty effectively. I think the team is pretty diligent about it. I think there’s opportunities for us to continue running the business the way we’ve been running the business. And I expect we’ll have to do that in 2024 to deliver our plan and do what we need to do, inflation driven or not. On AT&T Air, again, not much different in my narrative around it. I don’t expect that we are going to be pushing the product in the same way that some others in the market are pushing it today. We’ve made a conscious choice as a company that we want to dedicate capital to investing in fiber, which we believe is a more sustainable, long-term means to deal with stationary and fixed broadband needs.
It doesn’t mean that we don’t think that fixed wireless serves some segment of the market. It does. It serves certain types of circumstances in the consumer base. It serves certain types of circumstances in the business base. And we will take advantage of those certain circumstances. As I’ve said, there’s a lot of small businesses that have usage profiles that fixed wireless is very attractive to. It’s something that we will lean into this year. You will see it reflected in our performance as we move throughout the year. We have places where because of our spectrum profile and our share position in particular markets, we can maybe lean in a little bit more aggressively in defining the consumer segment that we might serve with the product and service on a competitive market that you will see us begin to add some degree of market penetration on.
And as I’ve told you before, we will continue to use it very, very actively in our transition away from legacy assets as we begin to shutter copper footprint, take out square miles in our network, not have the operating costs associated with those fixed infrastructure that we can use this as a catch product. It’s a very effective catch product in some of those areas, especially given the density characteristics of what’s happened that we haven’t built fiber there yet or we will not build fiber, but it still allows us to meet our obligation back to the customer base and our state franchise agreements etc. So I don’t think you’re ever going to see a scale to the kind of monthly numbers and quarterly numbers you see coming from some of our competitors, but it’s a great tool.
It’s a great opportunity for us to continue to grow. I think the most important thing to understand, as you’ve seen is, we are broadband positive, aggregate broadband positive, and we are going to continue to be aggregate broadband positive going forward. So not only are we growing EBITDA, we’re going to now start growing the customer base and this will be one of the tools we use to have that ratable, sustainable growth that I think we’ve been seeking.
Phil Cusick: Thanks, John.
Operator: We have a question from the line of David Barden of Bank of America. Please go ahead.
David Barden: Hey, guys. Thanks so much for taking the questions. I guess the first one, Pascal, if you could kind of elaborate a little bit on the range of the free cash flow guidance. Is it dependent largely on where capital investment lands within that 21 to 22 or are there other potential moving parts that we don’t see in that equation? And I guess related to that, maybe John, the end of the year, you had 26 million fiber homes passed. The goal is 30 million by 2025. Obviously you’ve got a choice to kind of continue to kind of deploy the way you’ve been doing, which puts you closer to that 30 million by the end of this year, or you could throttle it back in an effort to contain the capital investment out the door and support the free cash flow guide. Could you kind of elaborate a little bit on the game plan there? Thank you.
Pascal Desroches: Hey, Dave. Good morning, and Happy New Year. Here’s the way I think about cash. We’ve made really good progress over the course of 2023 in paying down some of our short-term financing obligations. And therefore, as I look at the capital spend in 2024, it’s going to be more heavily weighted towards project spend. We have really good line of sight on that. It’s going to be within the range we provided to you, and we feel really good about that. The other factor that we have reasonably good line of sight to is our cash taxes for the year. Based on current legislation, we have pretty good line of sight in terms of where that lands. Obviously, we’re expecting EBITDA to grow. That’s going to be the driver of the growth, coupled with the step down in capital investment.
