I think the — let me start with LEO. This is an expensive offering on a month per month basis, expensive from a CPE standpoint. And it needs to be because the — if I told you our network was going to fall to the ground every six to eight years and burn up, you’d tell me that’s a pretty capital-intensive business that needs to be priced appropriately, and it is. I think LEO has a really good use in certain cases, but it’s typically not going to be where our fiber-based network is deployed. And so, it’s not something that really has risen too much in terms of our thinking in penetration. Fixed wireless access, it’s shown us that you can have lower quality and inferior service at a low price or low incremental price, and there’s a market for that.
But our penetration expectations for RDOF and for subsidized rural and what will feed into BEAD were already low in terms of what we’ve built into our models compared to what I think ultimately we’ll achieve. And so, I think that’s already reflected inside of our penetrations. If you think about just at the 12-month mark, where we’re approaching close to 50% in the subsidized rural passings, our initial thoughts were we’d be at half of that within a year. And so, we’re way ahead of that. And I think the terminal penetration will be higher than what we thought at RDOF, despite the fact that there’s an admittedly stronger fixed wireless access presence now than there was three, four years ago when we made those commitments. So, all a big roundabout way to say, I think it’s factored into all of our thinking.
And I don’t think it changes our view in terms of where we’ll ultimately get to for terminal penetration, because we weren’t overly aggressive in what we assumed.
Jessica Fischer: Yeah. And…
Peter Supino: That’s helpful. Thank you.
Jessica Fischer: We mentioned the less than 50% — or the 50% or so at about the 12-month-plus mark. But as you can see and what we provided and all of the cohorts that we are seeing, we’re still growing at a good rate at that point. So, it’s not as though you’ve reached the customers who are going to get your product and then we’re not seeing additional growth. We’re still seeing good growth in those markets even at that vantage.
Chris Winfrey: It’s early. It’s going well.
Stefan Anninger: Operator, we’ll take our next question, please.
Operator: Our next question comes from the line of Sebastiano Petti with JPMorgan. Your line is now open.
Sebastiano Petti: Hi, thanks for taking the question. I just wanted to follow-up on the competitive environment, just based upon the previous response. Just any help on thinking about the fixed wireless impact in terms of your — is that just isolated or the competitive environment that has perhaps shifted in 4Q and persisted into January? Is that isolated in your non-fiber overlap territories or you’re seeing that as well be somewhat impactful in terms of share as well in the 1-gig market? And a quick follow-up to that. Any update we can get on overlap for fiber as it stands exiting the year? And then, on the CBRS build out, obviously, your peer Comcast has been testing along with you for quite a while, but they’re live in Philadelphia as perhaps as well as some other markets. Any update on how the team is thinking about CBRS and how you’ll perhaps offload strategy over the next several years? Thank you.
Chris Winfrey: There’s a lot there, Sebastiano. But here we go. So, fixed wireless impact, it is where they’ve deployed and it’s in both fiber and non-fiber overlap. It’s more acute in the non-fiber overlap, because it’s the first time that somebody’s had what they view as an alternative other than DSL. And so, it has a novelty factor in the non-overbuild footprint that is similar to a fiber overbuild that has an immediate short-term impact when it’s new into the marketplace. So, it has a more pronounced impact there. But I think the overbuilders, the wireline overbuilders would tell you that fixed wireless access probably has had an impact on them as well. So, it’s not that it doesn’t have an impact in an overbuild territory.
It’s just much more pronounced in an area where the overbuild doesn’t exist. Our overbuild percentage, in our 10-K today, I think, we disclosed as well that it’s roughly 50% in terms of overbuild. And then, as it relates to CBRS, we are fully deployed and active with thousands of radio access networks out on the strand and MDUs in one large market today, and we’re expanding into another market at some point this year. And that’s going very well. And the pacing of that really is dictated by a few things. One is, our relationship with Verizon is good and strong. The economics are great. And this is an ROI-based deployment. So, it’ll be there — the returns will be there when we deploy. But interestingly, the more penetrated we become, the more attractive the returns get.
And so, from a deployment of capital perspective, CBRS is very exciting. It’s a very clear mathematical return. But in an environment where we’re deploying as much capital as we are and we have so much active activity on the outside plant in terms of high-split upgrade and construction of new networks, we’re just pacing it along the way to manage all those factors in the way that we think about deployment of CBRS. But we’re going to fully deploy it. It’s exciting. It has a great return. The depth at which we employed in each market, it really is a function of utilization on a geographically specific area, and the attractive agreement and the great relationship that we have with Verizon today. So, that’s strategic to us. So, all those factors play into the timing.
