Mike Sievert: Thanks, Craig. A couple of things. First of all, you heard Peter guide a confident guide on 2% growth in ARPA on the year. And that’s terrific to see. And obviously, there’s this ongoing trend that customers who buy T-Mobile can’t get enough of it, and they’re moving up our rate card. And that’s great to see. So we’re in a great spot. And before I say more about what opportunities we might see, I’ll remind everybody listening that we’re in an era of unprecedented value that consumers and businesses are realizing from this category generally. I’ve mentioned previously that typically today across the category, not just at T-Mobile, customers are getting three times more data than just five years ago. And at four times greater speeds industry-wide than five years ago.
So there’s tremendous value being given to customers in this category and if there are ways for us to find optimizations in terms of how we deliver that enormous value so that we can be more competitive and more efficient at how we operate including looking in our rate card and looking at our rate plans and looking at our policies and procedures, we’ll find those opportunities. Q4, we took some of those opportunities. We found a more efficient way to handle auto pay discounts with our customers and fully put that through the base throughout Q4, and that’s an important optimization. Right now, taking a lead from Netflix as they’ve changed their portfolio, we’ve made changes to the Netflix benefits that we give, which have been well accepted by customers.
So there’s a theme here. We may find optimizations, but we will be guided by a couple of things. One, what customers accept and appreciate because that’s really important. And number two, we have no intentions of sacrificing our brand position as the value leader in terms of what you get for what you pay in this marketplace. That’s always been a differentiator for us, and we will defend that jealously. But I’d tell you, there’s opportunities that could be there in an era of unprecedented value being seen by consumers and businesses. And if we can take those and meet those guidelines that I’ve laid out, we’ll do so.
Peter Osvaldik: Yes. And Craig, with respect to ARPU, I mean, as we’ve talked about multiple times, it’s very much a mix-driven metric. And on the consumer side, we have seen continued growth in ARPU. Now that’s offset with some of the success and tremendous value creation that we’ve had in enterprise and government. Those are obviously lower ARPU customers with high CLVs, larger ARPAs. And so that’s why the focus on one, the customer value differential that we’re bringing and our ARPA playbook, we believe is the right way to go, and you can see that demonstrated in what we delivered in 2023 and Q4 from a postpaid service revenue perspective, that’s where you’re kind of focused in with postpaid ARPU. And frankly, what we see from a service revenue opportunity in 2024 is even larger percentage growth than what we delivered in 2023.
So more than the 3.1% full year growth we’ll see in ’24 despite, of course, some slight ongoing headwinds in wholesale with the offset of TracFone and other carriers. So we couldn’t be more excited about this is the right playbook that delivers the most value creation in the industry.
Craig Moffett: Thank you.
Jud Henry: All right. Next question.
Operator: The next question is from Jonathan Chaplin from New Street. Please go ahead.
Jonathan Chaplin: Thanks, guys. Actually just a few sort of housekeeping questions actually. I’m wondering if you can give us what the number of ACP subs in your bases and whether you’re sort of anticipating using some of those if the benefit goes away? And how that sort of factored into guidance? And then ditto on bonus depreciation. If bonus depreciation gets extended, how would that impact your free cash flow guidance? Thanks so much.
Mike Sievert: I’ll start on ACP, and I hand it to Peter to finish on ACP and take the bonus depreciation question. When it comes to the number of subscribers in our reported base, it’s substantially none. There’s a very, very small amount of Metro customers, and that’s it. So it’s constrained to our Assurance Wireless business, which is not reported as subscribers and to our wholesale business. And as it relates to ACP and what’s happening to it, obviously, that’s in motion. You may have noticed that our EBITDA guide was a tiny bit wider this year. I would tell you that all the outcomes that we see for ACP are fully embedded in the guide that we gave you on EBITDA. And look, our risk profile around ACP is a little different than, say, a broadband company.
They went very big into it, committed lots of customers and numbers to it. And also, I think one subscribers that may or may not stick around. Mobile is different. Mobile is a product that customers will keep. And if they lose that discount our job, and I think our team is up to the task is to go win them over with our high-value offers. And we have some of the best brands in the space with incredible value propositions. And as other wireless providers see the same thing happen, we will get after it and position our brands as the place that those people land. So there’s a risk profile around it for T-Mobile, but I think much smaller than with other players, and it’s fully embedded in the guidance. That’s that, I’ll let Peter pick up there as well as talk about the bonus depreciation.
