Operator: The next question comes from John Hodulik of UBS.
John Hodulik : Can we talk about consumer margins within the guidance. They were down about almost 400 basis points in ’22. And Matt and Hans, you guys gave some good color on some puts and takes around promotions around Verizon Global Services and I think, I guess, higher marketing and network operation cost. But I guess any other puts and takes to call out. And as we look into ’23 as part of the guidance, should we expect the consumer margins to sort of flatten here? And do you guys have visibility that as you guys — a lot of these initiatives take hold that we can start to see some improving margins on the consumer side?
Hans Vestberg : Thank you. I mean, I can start. I mean, of course, we’re doing quite a lot in the consumer segment right now, all the way from addressing areas where we have softness in our portfolio with Welcome, for example, in order to create growth. But also, we are regionalizing our business, both on the network side and the consumer side in order to take quicker decision, but also that the network is so strong in local markets where we’re building out the C-band. We want to take advantage of that. And as we said before, we have the chance to — or we now have a chance. We see the correlation between C-band deployment and step-ups and of course, fixed wired axis and the majority of fixed wired axis customer coming on C-band right now.
So that’s why. And finally, we have also worked with the spending, the consumer investment, I call it, all the way what we’re doing above the line on promo, what we’re doing below the line on retention and how much we do in media. We’re doing that much more agile. I think that will help us to manage and continue our clear path and a clear target of growing our top line and expanding our EBITDA. That’s our job. Then there are some headwinds that Matt has talked about, but obviously, the underlying should be improving with the cost cuts and the way we’re working in the consumer group. Matt?
Matthew Ellis : Yes. Thanks, Hans. So as you think about the year-over-year reduction in ’22. Remember, at the start of the year, we said that we expected about a 200 basis point impact because of the inclusion of TracFone in the business for the year. Obviously, accretive in absolute terms. But from a margin standpoint, we did expect to see that. So then obviously, there’s some other items in there. We talked a little bit about the inflation impact last year. Obviously, the competitive environment and the promo piece in there as well. So there will be some things that we have the opportunity to improve on this year’s synergies from within TracFone as we move more customers over to our own network will be an upside. But then as we mentioned in the prepared remarks, obviously, the promo amortization is expected to be up on a year-over-year basis as the delay between being at these higher levels from a cash basis and then that flowing through on an accounting basis.
So when you net those things out, expect something initially on a probably a similar type of level in ’23 to ’22 with some opportunities to push that as we go forward into subsequent years.
Operator: The next question comes from Brett Feldman of Goldman Sachs.
