Michael Rollins: Thanks. And one other quick one. You mentioned the overlap with cable in terms of the competitive nature against the wireless footprint that you have. What’s the overlap competitively with the big three wireless national providers?
Laurent Therivel: So we see them in — you mean the 60% some-odd that I quoted in terms of the percentage of our markets where we compete against them. And you’re asking what the comp — what the — what that number would be for AT&T, Verizon, T-Mobile?
Michael Rollins: Yeah, for each of them. What’s the percent overlap against each of those three national wireless players?
Laurent Therivel: Yeah. It’s substantially all. It’s greater than 90% for all the big three.
Michael Rollins: Thanks. That’s helpful. Thanks for taking my questions.
Laurent Therivel: Absolutely. Have a good day.
Operator: Our last question will come from Sergey Dluzhevskiy from GAMCO Investors. Please go ahead. Your line is open.
Sergey Dluzhevskiy: Good morning, guys. Thank you. Thanks for taking the questions.
Michelle Brukwicki: Good morning. Sergey.
Sergey Dluzhevskiy: Good morning. My first question is for LT on fixed wireless. So this C band being deployed, and in general, mid band being deployed for you, how does that impact your approach to fixed wireless over medium term? And also, what is the addressable market that you see with fixed wireless now that you have all your spectrum that you can deploy over the next few years? And also, how do you think about the capacity needs for fixed wireless over the next few years?
Laurent Therivel: Yeah. Thanks, Sergey. So let me start with the overall market opportunity. I’ve referenced this number in the past. It hasn’t changed. We see the overall opportunity for this business at around 400,000 subscribers. That’s a combination of two factors. And it’s a combination of the market dynamics where we believe this product is competitive versus the network dynamics of — I mean, this is a product that rides on top of the investments that have been made in mobility. I’ve been transparent about this in the past. This is not a product that pays for itself, right? It doesn’t pay for all the capital requirements that are needed to put new radios and new towers in place. And so you put capacity in place for the mobile subscriber, and then you pivot that capacity where you have it available and you serve the needs of fixed wireless.
When you put those two things together, we see a market opportunity of about 400,000. Usually you would see growth rates starting to slow as you reach the kind of customer scale that we’ve reached. So when you first roll out a product, the first 5,000, the first 10,000 customers, you see fantastic growth. Right? But then as you start hitting scale, the numbers become more challenging. The real impact of mid band for us is all of a sudden, we can offer a drastically faster product that competes not just in rural areas, not just in un- and underserved, and not just where the competitor is DSL or satellite or nothing. We can offer 300-meg on a mid-band-enabled product. And so that competes extremely well against cable. And so we expect that mid band product to be the key driver of growth going into 2024 and in 2025, and it opens up new geographies for us.
As I mentioned, we should have 30% of our towers carrying almost 50% of our traffic fired up with mid band by the end of the year. We’ll be doing that on a steady cadence. And every time we upgrade a product — we upgrade a tower with mid band, that shows up in — for our stores as an opportunity to sell an enhanced broadband product to our fixed wireless customers. And so the net impact of it all is that we expect that attractive growth that we’ve seen in fixed wireless to continue, notwithstanding the fact that that business continues to scale to larger and larger numbers. So hopefully that gives you a sense about how we’re thinking about it and of the impact of fixed wire — excuse me, of mid band.
Sergey Dluzhevskiy: Yes. Thank you. And my second question is for Doug. You’ve made some progress, obviously, on cost optimization program, but it’s still a focus for you in 2024. If you could provide more color on maybe, which cost categories do you see as opportunities for more meaningful cost reduction over the next 12 months to 18 months? How should I think about that?
Douglas Chambers: Yeah. Well, Sergey, first of all, you see the progress we’ve made on that. And when you look at our 2022 margin compared to our 2023 margin went from 25% to 27%, as we talked about in our remarks, the program is working. And just to emphasize, we have this program organized across our business. We have 12 campuses, we have accountability from all of our leaders, and everybody is delivering on this program. So it’s been really successful and we’ll continue to go across the whole business for savings. We still have opportunities in really all of our areas. But as far as where most of the dollars are, it sort of follows our P&L, right? So we have a lot of dollars, of course, in engineering OpEx that’ll continue to provide significant savings as will market in IT. So, we really are proud of what we’ve done so far. There’s more to do, and it’s going to be across the business.
Laurent Therivel: Sergey, I’ll just chime in. Thank you for directing the cost question to the CFO, but the CEO occasionally has something to do with it, too. So I won’t dump it all on Doug. One thing that we’ve seen a lot of — we’ve seen a lot of success is in our efforts around automation, in our efforts around transparency and flexibility for our customers. And so the example I’ll give there is the upgraded bill that we provided to our customers. So we’ve both — we’ve rolled out a new bill format. The first change that we made was almost a year ago, where we changed our approach to prorations. The second thing that we’ve done is we’ve recently launched an entirely new format for our customers, providing them a lot of transparency, what they can expect, how the bill breaks down, what they can expect the following months.
