Hamid Akhavan: So I’ll start answer in reverse. Yes, we do expect this trend to continue. We are — the progress we saw in March, in my view is not a one-time hit. We expect that business to continue to keep this age and perform better. I think the — we made a number of changes early in the year and even in fourth quarter that puts more emphasis on maintaining and developing the prepaid business, which was actually a pretty good business has been a home base for us, but had been somewhat under attended at the — simply because there’s been an overemphasis on the postpaid business at the expense of the prepaid business. So we’re kind of bringing it back now, both of them to power level of attention. We have been increasing our incentive to the dealers.
We have been doing a better job of targeting higher-value customers, not taking low-calorie customers, using credit checks better, doing ID checks better, doing a number of things that would basically improve our execution on the prepaid. And those things are lasting. Those are not one-time hits. So yes, we are encouraged with the churn has come down historically low and ARPU is increasing and we expect to keep it in that on our track. The postpaid business, I didn’t mention much about it here simply because our initial approach to market was rushed. It came — it was one of those cases the company has spent a significant amount of attention and time developing the infrastructure, the coverage that was paramount as a minimum viable product and requirements for the spectrum.
That was primarily the focus of the business and not as much focus has been given to the go-to-market for the postpaid. The product did not meet all of our expectations in terms of feature sets and activations and support. We have to be working on improving those things and including our offers and we do expect to do a better job on the second half of the year with the postpaid, and we have not — we definitely want to — we realize that is a critical part of the business that we need to succeed in, and we intend to do that. But the right thing to do was to push that out a bit, get the basics right. For instance, we did not have that global roaming. That is a requirement for postpaid that we were not taking at that moment. This is all going to come back.
We expect both business, both prepaid and postpaid to do even better second half of the year.
Operator: The next question is from the line of Michael Rollins with Citibank.
Michael Rollins: Just a couple of things. First, just curious, going back to the subject of build, where is DISH on meeting the 2025 milestones? And is it the expectation to invest to meet those milestones? Or do you plan on asking for an extension to maybe give you more time for that, given some of the comments that you’ve made in the past? And secondly, with respect to the cost cutting, can you share where you are on that $1 billion of annualized savings that you’re targeting? And are there incremental investments that also need to be considered that could offset some portion of those savings as we look at the expense trends over the course of this year?
Hamid Akhavan: Two part questions. As for the first part, as John and I both mentioned, we are focused on meeting our 2025 FCC milestone as well as invest in our financing needs, which include the capital required to meet those milestones. Some are tied together. But we are certainly focused on those objectives for the build-out. As it comes to the $1 billion, I’ll pass that to Paul who can comment further on it.
Paul Gaske : Thanks, Michael. This is Paul. It’s a good question here. So the $1 million ramps throughout the year. So we’ll exit the year at a run rate of $1 million. And to answer the question about do we — are there any material investments that we need to make to achieve that? And the answer is no.
Michael Rollins : And are there also investments that you’re just going to make, whether it’s in marketing and sales and other components of the expense base that will offset some of these $1 billion savings over the course of the year?
Hamid Akhavan: It’s a very large list of optimizations. None of the optimizations fundamentally impact our ability to develop our business in the future and prioritizes our strategic growth opportunities. So there is nothing structural or fundamental. We just had a number of synergies here and opportunities. Some of it had to do with marketing, where we didn’t need to spend, for instance, if we — I mean — I go to marketing because that’s where you hit on first. If we are not on the postpaid side of the business on retail wireless, for instance, we are not optimizing our marketing approach, we kind of scaled that back for time being until we get our offers and execution right. We were attracting customers to our sites. We were not just able to convert them that was just not an efficient way to spend marketing, but there’s a significant amount of efficiencies on moving customers from off-net to on-net that vastly reduces our costs in certain areas paying to the partners.
This is an acceleration of the plan for us that John had talked about. So we — ahead of schedule trying to do that, accelerating some of those technical aspects John talked about migration — automatic migration over the year, something that others haven’t done. And we are really — as a necessity here, we are really good at doing that. And the team has managed to develop that and accelerate that. We had no leakage and no loss, trying to bring customers on — from off-net to on-net that generates a significant amount of synergies. You can go across the business and duplications between the merged companies. We have taken advantage of that very quickly upfront, early in the year, we immediately took advantage of that. And by the way, there’s more to come.
I mean all myself and the rest of the management TV, we don’t believe that $1 billion was the end of it. We think there’s significantly more opportunities. Without even touching any of the other aspects of the business. The other thing we have done is, if you noticed that we mentioned in our — most in the prepared remarks, we are focusing on higher-value customers. We are now a lot more diligent about looking at every customer segment that we acquire and shifting our attention to higher-value customers as opposed to kind of spread across our acquisition, spread across all value chain customers. So leaving some customers behind that we think there will be good from the perspective of a gross ad numbers, but not great from a perspective of return on capital.
So we’re putting that behind and emphasizing higher value customers. So I’m not — in some of the areas where we talked about, our subs are down, our customers are down. Those are intentional, not all of it, but certainly some of — many of those are intentional. We’re just leaving that behind. In order to focus on higher value customers, improving our execution. Net of it is that we are on — we believe we are on target to meet the $1 billion that we had budgeted. We are on budget for the first quarter in nearly all metrics of the business. And we expect to finish the year achieving all those savings. And we are not done looking at additional opportunities as we get to the second half of the year in order to be ready for the following year.
Operator: Our next question is from the line of Walter Piecyk with LightShed.
Walter Piecyk : I just want to go back to Michael’s question. And the first one, at least to see if you can unpack it a little bit more with regard to the third deadline. Can you give some sense in terms of the individual licenses like percentage of POPs or megahertz POPs that you’ve hit those deadlines. And I guess, more importantly, it’s probably something the bondholder should consider. At what point, is it too late in terms of getting the financing required to fulfill the deadlines for all of those licenses, in terms of the financing or refinancing the stuff that’s coming due in November. I mean, is there kind of a date on the calendar where it’s like, look, you waited this long now even if we spend a ton of money without any relief from the FCC, we can’t hit it on X percent of these licenses that we have across the spectrum for this third deadline?
John Swieringa : Walt, this is John. I’ll take the first part of that and then see if Hamid has anything he wants to add. As you know, we’ve been in an accelerated deployment mode for years now. We know how to acquire sites. We know how to do careful planning. We know how to get teams activated and moving in the field to get coverage layer up quickly. . As it relates to 600 megahertz, we’ve been in planning mode. As you know, it’s a different kind of build, right? You need to capture the flag in every single license area versus a coverage based on general population. But we’ve got the sites identified, we’ve got backups where the team is ready to roll on this. I am keeping my eyes on a few markets up in the north where it gets cold. But I mean, generally, we’ve got the time we need to execute on the 600 megahertz for 25 and also the unpaired band 70 uplink, which is a little bit after that.
Hamid Akhavan: I’ll add a bit more color to John’s response. Obviously, financing has to happen. It cannot be — we don’t have infinite amount of time to get the financing lined up to meet the obligation. So they are related. At the moment, we can meet the obligation certainly focused on it. Obviously, the financing has to come at the right time. we have that in mind in our discussions with the bondholders and sources of capital. I can’t comment any further on that. Generally, we don’t comment on our obligations publicly, but the issues that are all interrelated. We are focused on building — making the build and meeting our obligations again, conditioned on as you mentioned, the financing company at the right time. There is no specific date that I can offer you but that is something that we certainly have in mind as we progress.
