And that’s the strategy that we have to have. We have to make online, whether it be Amazon or other partners, right? That experience may be better for most people than going into a store and waiting in line and so forth. If we do that, we’ll be very successful. And there has to be messaging and marketing things to make that happen. But having said that, that’s the strategy. If you — what’s nice about that is, in a funny sort of way is, we could hit the ground running a lot faster if we had 5000 stores in postpaid but we don’t. On the other hand, if you make the online process better, you’re going to wish you didn’t have 5000 stores talk to the bookstores of the world about that, right? So we think where the puck is gone. We think we’re in the right place, when we make it with when it works.
It really works. It’s a great experience. There are a ton of issues. But some on our side, some of our partners side that we still have to correct operationally because we would have liked to add a few more months to before we went out to the public, but iPhone came out on a certain date, we had to meet that day, right? Or else we would miss that wave. So we felt like we needed to be there. So we’re a little ahead of our skis. It’s a little bit like, but having so we’re making a few more mistakes than we probably normally would like to make. But we’re failing fast. And we’re learning and I think that’ll pay off for us. So I think strategically, while we’re on the right side, I think any criticism on the marketing side is well received here.
In terms of we know we need to do better there. And we know that the messaging has to be fine tuned. And it’s not just the messaging is the operations. It’s how you promote it. It’s a two or three different things in our company with our partners working together to do that. We haven’t quite cracked that yet but we will.
Walter Piecyk: And how low can you get CapEx, Charlie for 24?
Charles Ergen: Well, I mean, I think nothing’s changed. Actually, some did change a little bit. We’ve said $10 billion on the CapEx side. We’re obviously short of that. The Puerto Rico sale, I mean, you’re more familiar with that than I am. So maybe I’ll let you talk about that. That helps a little on the CapEx. Yes, I don’t know that Paul’s willing to give guidance on total CapEx for next year, but we announced the Puerto Rico sale this morning. We have a lot of experience in Puerto Rico over the years with Pay-TV in the last couple of years with wireless. It’s a challenging market, it’s a very competitive market, it has weather challenges as well, the build out would be expensive. So we thought it best to enter into a transaction which gives Liberty a much more competitive spectrum position, frees up, brings us new capital in terms of the sale proceeds, as well as pretty significant capital savings from not having to build on both the islands which are very expensive bills and higher than average effect.
So by entering into the transaction will now be able to focus those funds back into the continental U.S.
Charles Ergen: I think I understand your question. We have several levers, right, to manage cash. One of those is marketing and just the sack in terms of acquiring customers. We have the more profitable customers, the faster you want to go. The more marginal a customer is probably the slower you go but depends on how our total operations are doing. And then, CapEx where we’ve met our major milestone, it’s not that expensive for us to make the next milestone. But because it’s, we’ve done the hard and then the heavy lifting. On the other hand, you want to continue to invest in your network because you want to move people to off the MVNO. So you have to balance — we have to balance those levers. And so it’s not an easy answer.
Other than you can expect CapEx will continue to decline the rest of this year and into 2024, before you’ll see an uptick in the first half of ’25 for a couple of quarters, as we finish that final build out milestone. So [indiscernible] free up capital and how they get spent, will be dependent on how well we’re doing in our business.
Walter Piecyk: If you don’t mind, I’m going to try one more angle on this, which is, I know you’ve been generally adverse to basically giving away phones, right, using working capital, whether it’s payment plans, or just literally subsidizing phones, like what AT&T does to a certain extent with its existing customers. Now that you’ve had the offer in the market, is it just a recognition of people seeing the $25 and activating a second, Sam, or whatever it is versus are you starting to think that may be being more aggressive with spending capital and basically giving away free phones, or at least subsidizing a portion of them is going to be necessary to get some traction going on the postpaid side?
Charles Ergen: Yes. I mean, look, we’re realists that nobody really subsidizes a phone. They obviously charge a customer for the phone. So we’re not opposed to that. I mean, but when you have your own — when we have our owner economics, you realize our variable cost for that customer, our variable cost is 0. So there’s a lot of interesting things we can do as we move into. This question hadn’t been asked but I think I’m just going to transition this because I think it’s important indirectly to this question. So as we transition people to our network, the world changes for us economically. And John, maybe John is our President and Chief Operating Officer and has all the build-out and as he’s in the budget cycle pretty heavily now. We’ll probably get — maybe you want to jump in here and give maybe better answer to Walter’s question to give a feel for how you look at it.
John Swieringa: Yes, of course. Thanks, Charlie, and hey, Walt, thanks for the questions today. So really, I’m working on a 3-legged stool. The first piece is, we’ve got a little over 120 million commercial VoNR ops today, about third of the country, where we have voice and data which is needed for Boost Mobile and Boost Infinite. We’re going to take that another third up to 240 million by June. So you can sort of see our trajectory there in terms of where we get to sort of full M&O economics in our retail business. But at the same time, and I’ve talked about this on earlier calls, there’s been a lot of focus on getting the device ecosystem where it needs to be to support us. And right now, to give you a feel for, about third of the devices we activate are compatible with our network, 5G SA, our Spectrum bands, those sorts of things.
And again, up to June next year, we’ll move that to two-thirds, right? So that’s another sizable shift with the support from the Android community. Obviously, you saw the news on the iPhone. And so we’re working through the device side of it as well. And the impact of that is as we bring in new customers, the economics change dramatically. We expect to be able to see that as we head towards next June. But in addition, the other effect, and I think a few of the analysts wrote about this, this morning in early reports, we get to take a sizable chunk out of our MVNO bill. So as we look at that, we see that going down by a third as we get to June of next year. So those three things together really sort of change the trajectory in the retail business.
