Mike Sievert: Yes, absolutely. In fact, I’ll give a broader picture, rate plan and device promotions, which have become a big part of the competitive milieu over the last couple of years. It’s intense. It’s really competitive. And it’s pretty consistent too. I mean, I think it’s been consistently competitive all year. And you saw we delivered an incredible Q2 and Q3 in that context. Some of the best performance in our history, the lowest churn ever for a Q2 and for a Q3 in our history. We continue to lead in postpaid net additions and delivered EBITDA performance and outlooks on EBITDA that show that we’re monetizing that growth as well. So we’re really comfortable in this competitive dynamic and it’s stable and consistent. So that’s what’s going on out there. It’s intense. We like it that way. And, I would say, we’re entering typically very intense seasonal period around the holidays, and I expect it to be a slog out there just like it is every year.
Craig Moffett: Thank you.
Mike Sievert: All right.
Jud Henry: All right. Next question.
Operator: Our next question is from the line of Brett Feldman with Goldman Sachs. Please go ahead.
Brett Feldman: Thanks for taking the question. During your prepared remarks, I think you’d mentioned that your fixed wireless churn has come down. I was hoping you can maybe give us a little bit of insight into what’s driving that? Maybe broadly speaking, what you’ve learned about what creates churn and what causes greater levels of retention across that base? And do you think you’re getting to a point where churn is getting into a mature run rate or is there still opportunity to keep driving that lower? Thank you.
Mike Sievert: Yes, I’d love to take credit for that. I think a lot of it’s just the math of the aging of our base. So this product was great when we launched it. And that’s because we had made sure it would be great before we took it national. And so, it’s generally been pretty consistent. One of the ways you can look at that is the net promoter scores, which have been pretty consistent.
Michael Katz: Yeah, in fact, leading industry of all kinds of — different kinds of broadband products. Yes, I think there’s two things. One is the one that Mike just said. And we’ve talked about this previously, that when you have a new broadband business, one that literally has doubled in size year-over-year, that we have many more customers that are brand new customers that churn at a higher rate. That’s just the way that the churn curve works on products like these, including wireless. Early 10-year customers churn at a higher rate. And as customers mature and our base matures, we expected to see a decrease in churn, which we, in fact, have seen. Additionally, across all of our 10-year cohorts, we’ve also seen churn come down.
And a lot of that is because as we get more mature in our execution and as we get more feedback in data from customers about their performance, we’ve been able to tune our execution. We’ve been able to do things and address things like common things that cause confusion for customers either with install or with peripheral devices being attached to their CPEs. We’ve created better tools to be able to troubleshoot for customers. And those things have had an impact on churn. And I do expect as we learn more, we’ll get better there as well. So, our goal with all of our businesses is always to be the best in churn, and that’s no different for us than in the HSI business.
Brett Feldman: Thank you.
Jud Henry: Okay. All right. Next question, please.
Operator: Our next question is from the line of Jonathan Chaplin with New Street Research. Please go ahead.
Jonathan Chaplin: Thanks. So Mike, when you talk about why your business is so great, it always starts with the discussion of the fact that you have the best network and it’s built on this incredible spectrum portfolio that’s unmatched across the industry. Is there something about the broadband business that means you don’t have to own and control the underlying asset in order to have the same kind of defensible position in broadband, and I’m thinking specifically of fiber here as opposed to fixed wireless access?
Mike Sievert: Well, it’s a great question. For me, in the wireless space, you have this national competitive intensity where brand trust around this intangible value and network is really, really important. And we have so carefully built that brand trust over so many years that we think it’s somewhat transferable. People believe in this brand, being an advocate for them, putting them first, changing the rules in their favor. And in wireless, there’s a big intangible on network, which is, you can’t really buy three phones and then travel the whole country. There are services that do that, and people make advertising claims based on what those services find, but people don’t believe all that stuff. So it really comes down to their own lived experience and the covenant — sort of the contact and the connection they have with the brand that they use.
And what we’re finding in our work is that, that brand is highly transferable into adjacent spaces because of that trust. And so, we’re interested in the space. We’re finding that our brand really resonates, but we’re not interested in changing who we are from sort of a capital structure standpoint. And that’s why we’ve talked about fiber the way we have.
Jonathan Chaplin: A quick follow-up, Mike. Can you just update us on how many homes you’re addressing with fixed wireless access and how that’s changed over the course of the quarter?
Mike Sievert: Yes. And I’ll address it, but I will remind you, it’s a bit of a different metric than homes passed in the broadband and fiber space. We generally talk about marketing to about 50 million homes right now. But it’s a dynamic number and it changes based on penetration of given neighborhoods. And so what happens, I’ll remind you is that on every sector of every tower, we have an assessment of capacity, not just now, but out into the future, assuming ongoing wireless smartphone share taking and ongoing rapid increase in wireless consumption per smartphone. And once we plot all of that out, there are sectors of towers where no normal amount of share taking or wireless smartphone consumption will use up our capacity anytime soon.
And in those places, and only those places are we approving applicants for our home broadband service. And what that means is, we’re essentially monetizing and selling excess capacity through this initial 5G broadband strategy. And so those are the “homes passed”. Now, if three people in your neighborhood sign up, or four or five people, depends on the sector, the whole neighborhood comes off our list until such time as we’ve got that excess capacity again. Now, as I mentioned earlier, Ulf is rapidly rolling out new capacity enhancements, and we’re only part way into it. I think as we wrapped up the quarter, we had what, Ulf, about 155 megahertz deployed against our Ultra Capacity?
Ulf Ewaldsson: That’s right. And we continue — I mean, we have now 70% of the payload is 5G on the network. As we continue to see more and more 5G traffic, that means we can move over frequencies that are used for LTE into 5G. And as you said earlier, we have this enormous spectrum asset in mid-band, which is where the home Internet products are residing that we can continue to leverage. We have more spectrum than anyone else has on mid-band as a potential. By the end of the year, we are approaching 200 megahertz that we will have dedicated for 5G products.
