Michael Rollins: Thanks. Good morning. Just a couple of follow-ups. First, on the wireline side, just curious, as you look at the goals for 2026, can you give us an update in terms of the total spend to get to those goals, whether it’s on a gross basis or just capital investment needed to get to that point or on a net basis. So what the net funding need for the businesses over the next few years. And then on the wireless business, you commented a little bit earlier on the churn dynamics. And curious, when you look at your churn versus maybe where some of the national carriers are, is this the obvious opportunity to try to push that down 20, 30, 40 basis points and improve the total subscriber postpaid phone trajectory for the business? Thanks.
Michelle Brukwicki : Hi, Mike. This is Michelle. I’ll start and then let LT jump in. So in terms of fiber funding and our 2026 goals, I’m not going to give guidance or specific numbers beyond 2023 right now, but I can give you some context. We do still believe that those 2026 goals are achievable. We still have a plan in place to get to those 2026 goals. It will take additional CapEx versus where telecom had historically been. You’ve seen the elevated CapEx in 2022, 2023. But what I can tell you is that for 2024, directionally, I can tell you anyhow, that CapEx is going to be lower next year. And that’s for a couple of reasons. I just mentioned about ACAM. We’re going to be spending a little bit less on that as we get our planning going for the new program.
And in our incumbent and in our cable markets, we are being very prudent with CapEx. We are identifying anything that can be reduced or deferred, especially knowing that, that E-ACAM program work is coming and can address some of the needs that we have in our ILEC markets. And then third, another reason that CapEx will be lower next year is on our expansion markets, you’ve seen very elevated CapEx the last couple of years, but a lot of that has been to get that upfront spending in, in order to get those markets launched. And by the time we get done with this year, all those markets will be launched, which means that, that upfront spending will largely be behind us. And that’s things like getting the hub sites, cabinets, plays, transport routes, things like that.
So going forward, we’re going to be able to deliver addresses at an incrementally lower cost than what we’ve had in the last couple of years. So that’s also going to be able to bring our CapEx down slightly next year — or not slightly, but just bring it down commensurate with the addresses that we’re expecting to deliver next year. So we’ve been really disciplined with CapEx, OpEx. We’re focusing on growing our EBITDA and managing our CapEx so that we can self-fund this fiber program as much as possible. And that’s really important to us as we manage within our leverage that we’re comfortable with and considering capital markets today and the high cost of capital. So CapEx will continue to be elevated but just know that our focus is to try to drive profitability and manage CapEx such that we’re able to self-fund as much as we possibly can.
Laurent Therivel: Mike, let me tackle the churn question. I mean the simple answer to your question is yes. But you probably want a little bit more color than just yes. So talking briefly about churn, I mean what you’ve identified is the opportunity, which is how do we continue to drive that churn number down. We do see that as the biggest opportunity to improve our net add performance. Doug mentioned in his prepared comments about the positive trend that we’ve seen in postpaid handset churn over the past year. And the thing that’s driving that is the aggressive offers that we had in the marketplace around new and existing. New and existing basically means, hey, we’re going to provide attractive upgrade offers. We saw a lot of customers adopt those, and that’s helped us with year-over-year churn.
We plan on doing something very similar through the holiday period. So we’re focused very carefully on upgrades, improving our in-contract rate. It’s something it’s spend that we see as efficient, so the money that you spend on those upgrade offers is not cheap, right? It’s an aggressive offer you have to put in the marketplace, but it works. And the reason it works you see customers in contract and then contract customers churn at a much lower rate. So yes, we do see that as the biggest opportunity in front of us in the next couple of months.
Michael Rollins: Thank you.
Colleen Thompson : Next question?
Operator: Thank you. We go next now to Sergey Dluzhevskiy at Gabelli Funds.
Sergey Dluzhevskiy: Good morning. Thank you for taking the questions. My first question is for LT on the tower business. Could you talk a little bit more about the progress that you’re making in increasing the number of co-locators but more broadly, I guess if you could talk a little bit about the medium-term strategy for the tower business? What has been working well so far? Would you still need to improve in order to gain a much larger scale and have a more pronounced revenue growth in the business?
Laurent Therivel: Yeah, hi, Sergey, I mean the improvement in colocation, I mean, the numbers on the slide, right, we’re up 2% year-over-year. But I mean to speak a little bit more about that. The growth itself in terms of new tenants and in terms of amendments on existing towers has slowed. But we think that’s slowed because of, let’s call it, macro industry dynamics, not because of anything that we are or aren’t doing well in terms of marketing the towers. We’ve mentioned it. We’ve slowed our capital spend. If you look at our competitors and their announcements, they’re doing the same thing, and we’re seeing the impact of that as we see new amendments and new co-locators in the tower business. By the way, that’s entirely consistent with our tower competitors as well they’re seeing and reporting exactly the same thing.
Midterm, we remain optimistic. And the reason for that optimism is there’s several. The first, let me just start from a macro industry demand perspective. The FCC does not have spectrum authority right now. By the way, I think that’s a travesty. But nonetheless, there’s no spectrum auctions on the horizon. And even though we haven’t seen the spectrum plan from the NTIA, there’s no obvious near-term mid band spectrum that they’re talking about releasing, notwithstanding my best efforts to try to convince them otherwise. What does that mean? It means that as we get into 6G, the way that you’re going to be able to support the increased demand from wireless customers, whether it’s consumer, whether it’s enterprise, is going to be with the denser grid.
