Peter Osvaldik: Yes. Let me just add to that. I think what you heard Callie say is we’re competing on quality, by and large, and ARPUs are rising. They rose in 2022 in the business space. And the premise of your question, they’re lower than consumer, but they rose in 2022 because CIOs are picking us because we have the best network and the best solutions, and they’re interested in what we can bring in 5G that our competitors are behind on. And so, that’s I think, very much to the premise of your question. As we go forward, one of the things to keep in mind is that even though business ARPUs are lower than consumer and always have been, and there’s no structural change happening there. They are very good. The cost to sell in that area is lower longevity. So, there’s plenty of reasons to like that business that are different for ARPU. That’s why you got to be careful about ARPU as a guiding metric for the profitability of the business because it’s not.
Mike Sievert: Yes. Absolutely, Mike. And your question, we’re definitely not anticipating ARPU to be down on a year-over-year basis. And probably our guide right now would be generally stable. And that’s primarily the mix-driven metric as we just had the continued success in T-Mobile for Business, for example, being a mix-driven metric responders or segmentation approach. But there’s been just a this amount of tailwind. We continue to see strength in Magenta MAX take rates in Q4. So as you get further into the year, there’s potentially opportunity that we could even see some increases over that. But I’d say right now, generally stable with potential upside later in the year, and we’ll see how that develops.
Operator: Our next question comes from John Hodulik with UBS. You may proceed with your question.
John Hodulik: Great. Two quick ones, if I could. First, I guess, following up on the business market question. Could you give some details on the rural market strategy? In the past, you’ve talked about where you are from a sort of spectrum deployment and distribution standpoint and sort of how well you’re doing in terms of penetrating that market? And then on the CapEx guide, about $9.5 billion, is this sustainable level? And for Neville, maybe could you give us a sense for sort of what you have in store for the network in ’23? Maybe update us on sort of the spectrum deployment at 2.5 where you’re thinking for C-band and the other spectrum deployments as we look out to 2030 and beyond would be great.
Mike Sievert: Thanks, John. Those are two great ones. First, on smart markets in the rural areas, and I’ll hand it to Jon. I am so pleased with what’s happening here. We set out to do something we hadn’t really done at scale before a couple of years ago. And 2022 was a pivotal year due to all of that at scale. We moved from 30% in to 60% of the marketplaces where we’re really competing at — I think we’ve explained to you before, what we call internally license to play or better. And in those places, the numbers have been placed. So, maybe, Jon, if you can give a little bit of color on how that’s going and maybe even some numbers and back it up, and then we’ll switch and talk about what’s going on in the network.
Jon Freier: Yes. Like Mike said, from 30% one year ago to 60% where we’ll keep hitting it just reminded about the size of this market. This is 140 million people across the entire country. It’s 50 million households. It’s 40% in the U.S. in terms of how we define small markets in rural areas, which is everything outside of the top 100 markets. But this overall business, it’s been so fun. My heritage is I started out 25 years ago selling into a market are bringing cell phone service into rural markets, and it’s in such times to actually bring usable Internet service, whether it be in your home or the mobile service in dual markets. So it’s a very, very fun issue so far. And I got to tell you, our switching is up 350 basis points on a year-over-year basis.
And when you look at where we’re competing, again, 60% of the markets across all small markets areas, we’re on in key areas of Verizon peaking over the leadership position in share of portends across the entire market, so a lot a lot of fun. When you look at what’s happening to with high-speed Internet, that’s a new for opportunity for us in smaller markets and we are in. About 1/3 of our total HSI, high-speed Internet net adds went out of smaller markets or areas, and that’s a big catalyst for us in these particular geographies to be that front door in that consideration. But when you look at — as been talking about this for a while in terms of not having to make a choice between the great value and a great network, that’s never been more important, particularly in these areas that have been underserved for the last 25 years and certainly in the last 10 years from mobile perspective.
So, we have a lot of fun doing it.
Mike Sievert: And to see shares switching well into the 30s given that a lot of these places, we really does start, I mean, we have the last many years of experience. And that shows that those customers have a resonance with our brands and with our story and they want in. So, we’re very pleased without these markets and consumers in the markets are responding. Terrific, let’s go back — sorry.
Peter Osvaldik: The second part of his question was CapEx.
John Hodulik: I almost forgot about network.
Mike Sievert: Yes, the CapEx fees where the answer is yes, $9 billion to $10 billion run rate. So that’s also we’re getting done with that line ’23 and beyond.
Peter Osvaldik: Thanks for the question, John. We’re coming off what has been a historic year for network investment in this company. I mean we had an accelerated spend in 2022. And you can see in Mike’s opening comments, the results that are coming from that. Our 5G leadership is just not disputed in the marketplace. So that’s now translating to overall network leadership, which is just tremendous progress for the business, and I thought a series of great growth opportunities as Jon just outlined in rolling across many other parts of the country too. So, as we look at a sustainable level in ’23, we’re in a great place because we got the integration effectively complete last year. That was a massive effort, but we’re ahead of schedule there.
And as we look at the build program on 5G and overall network, we just took great strides. Today, we announced 265 million people now covered with our ultra capacity footprint in the U.S. And that number will be 300 million people covered with our ultra capacity footprint by the end of this year. So we continue to expand that great powerful 5G service across the country. 300 million is a number that neither of our major competitors have even considered announcing a target to reach or to achieve. And in addition to that first part of your question, John, we continue to pain spectrum assets on 5G. I mean, we’re a 5G business. We’re trying to commit our spectrum, our entire portfolio to 5G as fast as we can. Why, because it’s delivering just a tremendous experience to our customers.
So that spectrum position today. We have 150 megahertz that are dedicated to 5G, some markets. And that’s, I think, currently more than AT&T and Verizon combined having the 5G space. And that number, we’ve said we’re targeting 200 megahertz just on the mid-band spectrum by the end of this year. And so, we’ve recently talked about how we’re not just deploying 2.5 gigahertz. We’re also adding powerful PCS spectrum in the space. That’s a big part of the program as we move through in 2023. You asked about DoD and C-band spectrum. We have some great assets there. Probably a 2024 deployment plan for us as the opportunity to leverage and deploy that spectrum cleaned up with the FAA, et cetera, but 200 megahertz on mid-band is going to be an industry-leading proposition long before we get to the pentanes.
So delighted with the progress, I mean, the 5G network is just unbeatable today across all markets in the U.S. The recent benchmarking clearly demonstrates that. But I think more exciting for the business and especially for the network team is this overall network leadership, something that we’ve been working way on for, as Mike referenced decades and now is in our hands. So a lot to do, ’23 will be a continued busy year for us, but the plan is to extend on that work
Mike Sievert: One of the things you can take away, John, from what Neville just said is that this network leadership story that has emerged has lots of room to run. We said three years ago, that we had jumped out in front on 5G, and we were at least two years ahead of our competitors. And I quoted in two years from now, we’ll still be two years ahead of our competitors, and that’s exactly what has unfolded if you listen to Neville’s statistics, he told you that we’re already, as you know, at 265 million people covered by ultra capacity. Neither of our competitors has stated the goal to be there any time in the next two years. In fact, they’ve stated to go for the end of next year, two years from now, it’s less than that. And yet, we’re not stopping there.
We’re on our way to 300 million people this year. But to me, is actually the more exciting part about the future testing you heard from Neville is going from 130 megahertz deployed of mid-band, 150 overall, 130 in mid-band to 200. That’s a massive capacity expansion that’s happening. Because that’s not just factors on the experience you get every day. So far, our medium speeds are 5x faster than just three years ago. Our Magenta MAX customers and you know how Magenta MAX is. They’re using 30 gigs a month. These are big advantages versus our competition. In broadband, where we’re generating more net adds than the rest of the industry combined, has lots of room to run. And so that’s all on the heels of this massive capacity that’s not just in the network, that’s still coming and within the run rate of the $9 billion to $10 billion in capital per year.
