I don’t anticipate any material headwinds from working capital, albeit depending upon how we’re doing, we may decide to continue to lean into short-term financing obligations to reduce those. So those are the swing factors, but look, all in all, feel really good about our ability to deliver on the guidance and continue to grow the business from there.
John Stankey: Dave, the way I would tell you, I go back to the question that was asked earlier about capital allocation, what we need to do. And I would say first and foremost, you’ve got to understand, we’ve given you guidance. We’ve made a set of commitments. Those are important to us. That’s what we need to deliver. And whatever decision making we ultimately undertake has got to be within that context of ensuring that we’re consistent in delivering back to you and our commitments. What I would tell you, it’s not just making a decision of, well, are there incremental homes you can go get with fiber. There are opportunities to present ourselves — present themselves to our business in a variety of different places where we have a choice to say, well, we’re a little ahead of plan or we were a little more efficient, should we do something else here or there and we’ll take advantage of those things every time they pop up.
And I would tell you, very comfortable we’re going to meet our commitment to you of 30 million passings, but I don’t know, we could see something happen where we get a vendor’s circumstance like we’ve seen in wireless, where somebody comes in and changes pricing and we get more efficiency out of something, or we see great results coming back in on the Gigapower side, and we decide that’s a better place to go and allocate a little bit more capital. All those things are evolving. We’ll weigh them, we’ll make decisions, and we’ll come back in and we’ll tell you what we’re going to do, all within the context of we want to make sure we’re consistent in meeting our commitments back to you.
David Barden: Got it. Thanks, guys.
Operator: And Michael Rollins of Citi. Please go ahead.
Michael Rollins: Thanks, and good morning. I’m just curious what you’re seeing in terms of the state of the economy for consumers and businesses? And for your business wireline segment, can you share more of the playbook of how AT&T is planning to improve operating performance in that segment?
John Stankey: Good morning, Michael. Happy to. So look, the economy has proven resilient. I expect the economy is probably going to continue to be reasonably resilient moving into this year. It’s an election year. Not that I’m a great soothsayer of what it’s going to drive in terms of policy, but it seems like there’s wins lining up that, like you would expect, moving into an important election year, policy will probably be such that it favors, trying to keep growth in the right place. And I think that will probably take what was a bit of a tenuous situation last year in terms of the rate of inflation decline and what that might do to growth rates and move us through a 2024 that’s probably going to continue to be one where we perk along and see the economy growing.
Our expectations are that we’re going to see some kind of uptick in growth. We think the combination of a little bit higher than probably target level inflations and — inflation and what’s going on in aggregate in the economy, it’s going to keep it a little bit tampered down, but it’s something that we expect to still see to be relatively productive. We haven’t seen anything with the consumer that suggests they’re not paying their bills or not in a position to continue to buy services from us. We certainly don’t see anything in business formation right now that causes us any degree of concern at this juncture. So by and large, I think we feel like we’re in a pretty good place moving into 2024, absent what I would call big exogenous variables in the global system that occurs.
We feel like policy will probably line up pretty well. On the business wireline side, I think there’s a couple things I’d first say is, one, what was not the right stuff in the fourth quarter that we have to kind of acknowledge, one — Pascal mentioned in his comments, we had nearly $100 million of one-time stuff that didn’t repeat. That’s certainly fully explainable, something we expected would be the case. The piece that probably I don’t think we nailed at the beginning of the planning cycle for ’23 that ended up transpiring over the course of ’24 that further impacted that segment was wholesale revenues were weaker than what we expected. Those are important revenues in the segment because they tend to be higher margin, more resilient subscription-based services.
There’s been a fair amount going on in the industry relative to restructuring of access services and wholesale. Some of it’s been driven through M&A consolidation, some of it’s through technology. We are through, we believe, the worst of that now. We’ve had two years of having to kind of deal with a lot of that repositioning and renegotiation of contracts. We think we’re in a pretty good position where our visibility for ’24 is better than where we have been, and don’t expect that we’re going to have quite the pressure we saw from that side of things that is a bit different from a forecasting and fundamentals perspective. And then I go to how we have to execute differently. I’ve given a fair amount of information and focus on we’re really shifting into the mid-market and trying to be a much more effective provider into the mid-market, and we are in fact seeing the green shoots of that occurring.
It’s moving a little slower than I might like. It requires us to open up entirely new distribution channels. It requires us to cultivate new relationships with ways to represent our products than what we’ve traditionally done, through what I would call direct owned and operated channels, requires us to rebundle and repackage the products a bit differently to be effective in that space of which we’ve been doing. And that requires us to do things like reprice, change systems, build capabilities for third parties to work with. We are making progress and we’re seeing that. We’re starting to see that instantiate itself in fiber-driven revenues that are coming on the products and services we want to sell, which are connectivity-based products and services.
And so we’re going to continue to run those plays. We’ve got to get a little bit better at it. But I’d also say step back and realize that while we report segment wise for wireline only, you should understand that the business marketplace is an important marketplace to us. And on a combined basis, wireless and wireline, we’re still growing EBITDA in that segment. And some of it is being driven from the goodness of more and more businesses are able to run the core of their company on a wireless infrastructure. And you’re seeing some of that put the pressure on the wireline side of the business, but we’re benefiting from that on the pickup on the other side. And when we talk about things like fixed wireless asset and AT&T Internet Air being an opportunity for us, we will be in a much better position this year on the catch to do some of that.
And frankly, that’s not a trajectory move and a structural move that I think is a bad one for us over the long run. So that’s kind of how I view the segment moving in. And we still think our brand plays incredibly well. We can walk in and have credibility. We’ve got the right products that ultimately customers want if we can get them distributed properly. And I have high optimism that as convergence becomes more important, we will distinguish ourselves further in the mid-market.
Pascal Desroches: Hey, Mike. One other point, just to add as well, as the legacy revenues continue to decline, we have an opportunity to continue to really hit costs in that sector fairly hard. And so I’m confident that that will also be a factor in moderating the losses over time.
Amir Rozwadowski: Thanks very much, Mike. Operator, we’ve got time for one more question.
