FYBR - NASDAQ

Good morning. Thank you for attending today’s Frontier Communications First Quarter 2023 Earnings Call. My name is Megan, and I will be your moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to Spencer Kurn, Head of Investor Relations with Frontier Communications. Mr. Kurn, please proceed.

Good morning and welcome to Frontier Communications first quarter 2023 earnings call. This is Spencer Kurn, Frontier's Head of Investor Relations. Joining me on the call today are John Stratton, our Chairman; Nick Jeffery, our President and CEO; and Scott Beasley, our CFO. Today’s presentation can be followed within the webcast available in the Events and Presentations section of our Investor Relations website. Before we start, please turn to Slide 2. Here, you will see our Safe Harbor disclaimer. This is a reminder that this conference call may include forward-looking statements that involve risks and uncertainties that may cause actual results to differ materially from those expressed today. During the call, we may also refer to certain non-GAAP financial measures, which are defined and reconciled in our earnings presentation, press release and trending schedule. And with that, I will turn the call over to John.

Thanks, Spencer, and good morning, everyone. As you saw in our press release, Frontier delivered another strong quarter of operational results and reached its most critical milestone yet, a return to year-over-year EBITDA growth. And this is the first time in more than 5 years that Frontier has grown EBITDA. We described 2023 as the year where we return to growth on both the top and bottom lines. Our Q1 EBITDA growth steps us nicely towards that goal. Before we review the quarter in detail, let's step back and take a look at where we are today on Slide 4. Over the past 2 years, we’ve expanded our fiber footprint and our customer reach, and our financial profile has significantly improved. Fiber now represents the majority of our customers, our revenue and our EBITDA. If you look at the trailing 12 months, our fiber products alone generated $2.8 billion in revenue and $1.2 billion of EBITDA. That's a 43% EBITDA margin. Turning to the next slide, you'll see how our fiber engine is powering our return to growth. Slide 5 is a familiar chart, tracking our inflection points over the last 2 years. Since we first began seriously scaling our fiber build in the second quarter of 2021, our team has been relentless in achieving critical milestones. We've hit record fiber builds and record fiber broadband net adds in nearly every quarter since we reemerged as a public company. We've also set ambitious cost saving targets, achieved them ahead of plan and found even greater scope of opportunity to pursue. Nick will talk more about this in a few minutes. And as you recall, at the end of last year, our strong operational performance gave way to improving financials as shown by our fourth quarter sequential EBITDA growth. Our financial performance this quarter has further improved, as mentioned, with absolute EBITDA growth for the first time in over 5 years. We're well-positioned to deliver EBITDA growth for the full year in 2023. A results that hasn't been accomplished by Frontier in more than 10 years. Once achieved, we see substantial tailwinds powering even greater EBITDA growth in the years to follow. On the next slide, I'll describe what drives that growth. There's an aspect of our financial performance that I believe is self evident, but easily lost amidst all of the other levers of value creation. I'll take a moment to frame this in terms specific to our build. As you know, fiber build has two defining characteristics. First, fiber requires significant upfront investment. At Frontier we've invested $1.6 billion in fiber infrastructure over the last 2 years, and built fiber to nearly 2 million homes. That's roughly $830 per location. The second characteristic, fiber builds deliver predictable and substantial EBITDA growth. As we build our fiber we've shown with a high degree of consistency, that we can achieve penetration rates of 15% to 20% after 12 months, and 25% to 30% after 24 months. While revenue has grown significantly alongside this penetration growth, it's been largely offset by our expected one-time acquisition costs. So as a result, in the trailing 12 months, this 2 million home cohort has only contributed about $10 million in EBITDA. In the next 24 months, however, we expect this same 2 million home cohort to release substantially more EBITDA, an estimated $230 million. And when the same cohort achieves our 45% penetration goal at full maturity, it will generate EBITDA in the range of $680 million. This powerful release of EBITDA is what drives very attractive returns in the mid to high teens. And once the fiber is initially built, it also results in substantial delevering of the business. And that's why we love this business, and why we're building way more than 2 million homes. Before I turn it over to Nick, I want to recognize the Frontier team for once again delivering on our four pillar strategy: build fiber, sell fiber, improve the customer experience, and drive operational efficiency. Everything this team has achieved is powered by our purpose, Building Gigabit America, a purpose around which our entire workforce has now rallied. Nick and the team have been unwavering in their pursuit of building an extraordinary company for our customers and our employees. I’m pleased with our progress. And I have confidence that we'll continue to deliver on our goals for 2023. Nick, over to you to review our performance in the first quarter.

Thanks, John. We had a strong start to 2023. And as John shared, we hit an important milestone in our transformation. Thanks to the team's exceptional operational performance quarter-after-quarter. We've delivered year-on-year EBITDA growth for the first time in 5 years. I shared this news with everybody here at Frontier this morning, and we're all proud of what we've accomplished in such a short period of time. It's a good feeling to be on a winning team. On Slide 9, you can see a detailed breakdown of our first quarter results. Our fiber build is off to a fast start this year. In fact, it was the strongest start to a new year that we've ever had with our fiber build. Let's put the 339,000 passings in the first quarter into the context. That 60% more than we build in the first quarter of 2022 and triple the amount we built in the first quarter of 2021. We sold fiber at record rates again this quarter. 87,000 more homes and businesses are now connected to our blazing fast fiber network. That's 61% more than we sold a year ago and we made changes to our go-to-market strategy to bring ARPU more in line with the market, which we'll dive into in a few minutes. Fiber is also winning the day with our business customers. We delivered 6% fiber revenue growth this quarter, as our total business and wholesale segments stabilizes. What's remarkable is that we've been able to achieve revenue growth while at the same time delivering cost savings. And this, of course, is the trick to successful turnaround. Which is why I'm proud to report that we're bringing another $100 million of savings forward by a full year. So we raised our savings targets to $500 million by the end of 2023. Now let's turn to Slide 10. As we discussed last quarter, 2023 is about our return to growth and operational efficiency. I'm pleased to report that our plan to accelerate our fiber build to 1.3 million locations this year is off to a strong start. Before we move to our customer growth, I want to take a moment to provide an update on the cost of our fiber build. As you read in our press release this morning, we now expect slightly higher capital expenditures this year. And there are two drivers of this increase. The first is our decision to opportunistically build inventory when we saw supply chain ease in the quarter, and the second is higher build costs, from scaling our buildings, new geographies, and like many others, we've also seen inflation drive higher labor costs. While these factors have a temporary impact on our cost per location this year, we're also seeing faster penetration, higher ARPU and better margin, leading our economic model to remain intact with mid to high teens IRR. Scott will cover this in greater detail later in the call. Now let's talk about our customer growth engine. Over the last 2 years, we've transformed the way we sell the way we price and how we are perceived. As you can see on Slide 11, it's working. Our customer growth is accelerating. And these are the types of trends we all love to see up and to the right. We're winning in the markets we serve for three reasons. The first is that fiber is in demand. It's simple. Fiber does what cable can't. It is the best internet experience possible. And a growing number of people are choosing fiber over cable when given the choice. Secondly, people love Frontier fiber. We're delivering a product that add value to people's lives and the proof is in our customer growth numbers. Thirdly, our value proposition is unmatched. We have the best product in the market at an attractive price point. And our customer momentum improved even while we implemented changes to drive higher ARPU, which we'll talk about next. Over the first 18 months of our turnaround, we focused on building and scaling our sales and marketing platforms, as well as rebuilding customer trust. Now that those foundations have solidified, we're making adjustments to our approach on ARPU, that will bring us more in line with the overall market. If you turn to the next slide, you'll see how our recent consumer pricing actions have begun to drive higher ARPU. Firstly, we've been effective at using our speed and price ladder to drive a higher mix of Gig+ speed across our customer base. In fact, we now have 55% of our new customers and 20% of our base, choosing Gig+ speeds. Secondly, we've begun to monetize value added services. And as we add new services like Whole Home Wi-Fi and premium tech support, we've actually doubled our tax rates in just a few months. Thirdly, we've moderated our promotional intensity, eliminating price locks and significantly reducing the use of discounts. And lastly, we continued annual price adjustments in the quarter to pass through some of our inflationary cost pressures. These actions together have driven a sharp increase in new customer ARPU, which is now in the $65 to $70 range, and this is a good indication of what's to come. On the next slide, you can see the same strategy is working for us in business and wholesale. We've improved our product with the launch of high bandwidth Ethernet, and monetized value added services like internet backup, premium tech support and smart voice just to name a few. We've also enhanced our pricing structure with multiyear customer contracts that contain inflation linked to price escalators and shifted our sales mix towards higher speeds. And the results are really encouraging. Since the fourth quarter, SMB saw new customer ARPU increased by 7%, Gig+ activations are up 7 points to nearly 50%, and value added service bookings are up 54%. It's great to see that our renewed focus on these businesses is driving greater value for both us and for our customers. On the next slide, I want to break down the financial impact of these actions. SMB is up double digits on both fiber revenue growth and fiber broadband customer growth. It's clear that speed and being future proof matters to our customers who run small businesses. With record Gig+ activations, we are meeting the growing demand of business owners for high speed reliable fiber broadband. Enterprise also had double-digit fiber revenue growth and record bookings in Q1. And just today, we launched our partnership with Cisco Meraki to offer a full suite of managed network services. And by marrying our best in business internet, with award winning Cisco capabilities like managed Wi-Fi and security, we're giving our customers the products and services they need. And our wholesale business is successfully transforming from a legacy copper business into a fiber based digital infrastructure business. Our digital infrastructure is helping future proof our partners, and a great example is our renewed focus on our fiber to the tower strategy. All four major wireless operators have now signed up to use our fiber infrastructure to help improve their customer experience. And our fiber backhaul is increasingly critical to support the data demands of modern wireless networks. I'm encouraged by the financial stability and long-term revenue opportunities in both business and wholesale. And these results are thanks to our strong leadership in these sectors and a team that's committed to meeting our customers' needs and returning both these businesses to growth. On Slide 15, you can see we continue to improve our customers experience. We look at two metrics to track how we're doing, and they're both going in the right direction. NPS continues to rise and churn remains low. We want to be the internet company that customers love. And that starts and ends with the customer experience which is driven by two things, our product and our service, and the customer is at the heart of our decisions on both. Let's talk product. A recent study by Recon Analytics showed that faster speeds equal higher customer satisfaction and that everything gets better with speed. As the first provider to launch network wide, 5 gig symmetrical fiber broadband, we are meeting the customer demand for both Gig+ speed and giving customers the option to go faster. And we're being recognized as a leader. We were ranked as the fastest internet upload speed in America in Ookla's recent speed test. Beyond speed, we've also made it easier for our customers to un-cable themselves and switch to fiber with our expanding YouTube TV partnership. We now offer a simple integrated bill to internet and live TV together. And on customer service, we're obsessed, we will make it simple and easy to do business with us. We're infusing AI into our customer care organization with our new customer chatbot Giga, to remove the hassle of calling for simple request like billing questions. And we know it's working. Our call center volumes are down approximately 30% over the past 2 years, whilst at the same time we've grown our broadband customer base. This really is a win-win. We are saving our customers time and frustration and saving costs for our business. Slide 16 recaps the first quarter well. Our operational success is translating into financial growth across all parts of our business and I'm incredibly proud of how far we've come in just 2 years as a new company. Our first growth engine, consumer fiber is firing on all cylinders. We had another record quarter and more fiber broadband net adds than the entire cable industry in the U.S combined. Even with a footprint that's just 1/20 the size. Our second growth engine SMB is now accelerating and our enterprise and wholesale businesses are stabilizing. We are fast emerging as a fiber first, AI first, digital infrastructure company, creating better customer experiences, fewer and better quality customer interactions, and a simpler and more agile frontier. Before I turn it over to Scott, I want to say a huge thank you to the team that's driving our transformation, and bringing our purpose of Building Gigabit America to life. And I'm pleased that we've started the year with such good momentum. Scott, over to you.

Thank you, Nick, and good morning, everyone. I'll start with our first quarter financial results. Revenue was $1.44 billion, which was up sequentially. Data and Internet services as well as subsidy revenues were higher. Our voice and video revenues were lower as we continue our transition to a fiber first business. We are in $3 million of net income and $19 million of adjusted EBITDA. $322 million of our adjusted EBITDA came from fiber products. This was up year-over-year as we combined strong revenue growth with significant cost reductions. As expected, we had higher acquisition costs related to strong growth in our fiber customer base. Additionally, we generated $389 million of net cash from operations, bringing this figure to $1.3 billion over the trailing 12 months. Our healthy cash flow before CapEx demonstrates the underlying cash generation profile of our business. On Slide 19, you can see the strength of our fiber customer growth across base and expansion markets. First, we had record net customer additions in the first quarter. At the end of the first quarter, we had nearly 20% annual growth in our fiber broadband customer base. And you can see the steady acceleration over the last 3 years. This momentum continues to give us confidence that we are on a path to an eventual 4.5 million fiber customers and the base fiber footprint, where we have 3.2 million locations, our penetration increased to 43.5%, up 35 basis points since last quarter, and up 110 basis points over the past year. The steady gains put us on track to achieve our target penetration rate of at least 45% in the next 2 to 3 years. Second, our 2022 cohort achieved penetration of 20% at the 12-month mark. Roughly 200 basis points higher than the 12-month mark of our 2021 cohort. This shows that our expansion playbook is working. I want to recognize our consumer team for developing a first class expansion playbook and for continuing to refine it to deliver above expectations. Our 2021 cohort reached 25% penetration at the 24-month mark, right where we expect it. Moving to Slide 20, fiber revenue accelerated 8% year-over-year growth driven by healthy consumer and business performance. Consumer fiber broadband revenue grew 17% year-over-year, driving our overall consumer business to 8% growth. Additionally, a renewed focus on small business, enterprise and wholesale is delivering results. Fiber revenue from business and wholesale grew 6% year-over-year, consistent with our growth last quarter. As the second largest fiber builder in the country, we are using our scale to expand relationships with new and existing customers. The copper revenue decline in the quarter was consistent with prior quarters as legacy product declined as expected. Turning to Slide 21, in the first quarter, we achieved year-over-year EBITDA growth for the first time in more than 5 years. This is a result of two things, strong fiber revenue growth, and cost savings initiatives. Our progress in both gives us confidence that we will deliver full year revenue and EBITDA growth in 2023. Slide 22 gives a bit more detail on our business simplification. We're taking aggressive actions to transform our business and grow margins over time. We are raising our target to $500 million and pulling it forward by one year. This represents $100 million in additional savings, one year sooner than we initially expected. Our streamlining efforts include productivity initiatives across almost every part of our business, including improving field operations productivity, reducing call volumes by giving customers better self service options, and increasing our usage of AI and customer service and back office operations. Consistent with our strategy, we will continue to reinvest a portion of these savings into fiber expansion and customer experience transformation, while a portion will flow directly into improved margins. We will now turn to our capital structure on Slide 23. At the end of the first quarter, we had approximately $2.7 billion of liquidity to fund the fiber build, comprised of $2 billion of cash and short-term investments and $664 million of available capacity on our revolver. In addition to the strong liquidity, we also have healthy balance sheet flexibility. Our net leverage was 3.7x at the end of the quarter. Approximately 85% of our debt is at fixed rates, and we do not have any significant maturities earlier than 2027. I'll now turn to our 2023 guidance. We continue to expect adjusted EBITDA of $2.11 billion to $2.16 billion, representing low to mid-single-digit growth versus 2022. We also expect full year revenue growth. In the second quarter, we expect adjusted EBITDA in the $520 million to $530 million range, which is up sequentially and roughly flat with EBITDA in the second quarter of 2022, adjusted for the $8 million of one-time tax benefits we received last year. As ARPU and our simplification actions accelerate in the back half of 2023, we expect year-over-year EBITDA growth to accelerate as well. We now expect capital expenditures of approximately $3.0 billion to $3.2 billion, up from our previous expectation of $2.8 billion. Roughly half of the increase is from higher inventory levels. The other half comes from scaling our build into new states as well as higher rates from some of our multiyear labor contracts coming up for renewal. As Nick mentioned, based on what we've seen in the first quarter of the year, we expect our fiber build costs to be in the $1,000 to $1,100 range this year. We are confident that our total project build costs will be around $1,000 per location as we are able to mix in lower cost locations in our new build states, aerial builds and an increased focus on multi-dwelling units. Consistent with our previous guidance, we expect CapEx to be front end loaded in 2023. We expect CapEx to be at similar levels in the second quarter before stepping down into the second half of the year. I'll close our prepared remarks by thanking our team for the strong operational and financial results in the quarter. Our leadership team has proven every quarter that our fiber first strategy is working, and this quarter was no different. It works because we are meeting a real customer need. Fiber is a superior product to cable and fixed wireless with blazing fast symmetrical speeds and low latency, we are well-positioned to meet the ever-increasing demand for data. We continue to outpace our cable competitors in nearly every market, and we are seeing a record number of customers un-cabled themselves to sign up for Frontier fiber. Fulfilling our purpose of Building Gigabit America, we are making it possible for more and more Americans to connect to the digital society for generations to come. I'll now turn the call back over to Spencer to open the line for questions.

Thanks, Scott. Before we open the line, we'd like to kindly request that analysts limit themselves to one question. Operator, we are now ready for Q&A.

[Operator Instructions] Our first question comes from the line of Brett Feldman with Goldman Sachs. Your line is now open.

Great. Thanks for taking the question. One of the questions we've gotten is if the cost of deploying to fiber does continue to remain a bit elevated, not just for this year, but maybe going forward. How do you think about -- how you would adjust to that? Do you think you continue to further where you would modify the build plan? Or do you think you have other tools at your disposal to mitigate that? And then just sticking with the build out, Scott, I'm curious how you're thinking about additional funding steps from here. Obviously, it was great to see that you took care of some funding earlier than expected this year. We've been getting questions around how you think about emerging financing options including fiber securitizations. Thank you.

Yes, sure. Brett, let me take both of those questions. So on the first one of build costs, we are still very confident in our $10 million location build. There are a number of different variables that go into the attractive mid to high-teens IRR penetration and ARPU at the top of the list followed by others, including build costs. So even if build cost remained slightly higher than we had originally expected, we're seeing better-than-expected penetration as you would have heard that we set a new record in Q1 this year, and our ARPU is starting to finally inflect. So we're confident that the 10 million locations are still attractive to build out. On your second question around financing, we feel really good about the set of options that we have. We have traditional first lien capacity remaining. We have -- we're closely monitoring the asset-backed securitizations that have come to the market. We are encouraged that fiber to the home is increasingly seen as a digital infrastructure asset class. And so between those and other options that we've discussed before, we feel like we have a very solid capital runway.

Thank you.

Operator, next question.

Thank you. Our next question comes from the line of Jonathan Chaplin with New Street. Your line is now open.

Thanks. One new question, and then I just wanted to follow-up on Brett's question a little bit as well. The new question is how much of the savings were -- the $500 million of savings that you've now pulled forward into 2023, did you manage the capture in 1Q specifically? And then it seems like the EBITDA came in a little bit slower than you expected in 1Q. You obviously have a tailwind from bigger-than-expected savings. Was the headwind or just faster growth than you expected in subscribers and fiber subscribers? Or is there something -- were there some other headwinds there as well? And then just to clarify on Brett's question, it sounds like the focus is now sort of 10 million specifically, no longer 10 million to 12 million. I just wanted to get a sense of whether that was sort of an intentional shift in terms? Thanks.

Yes. Hey, Jonathan. It's John Stratton. No change in terms of the overall addressable opportunity set. So we have -- we are very much heads down and focused on the first 10 million. We've been saying that now for several years. But we do see another what we've described as 1 million to 2 million additional passings as an opportunity for us that's quite profitable. So no change there.

Yes, sure. Jonathan, let me take your first questions. So on the $500 million of total savings, we pulled forward a year and we increased it by $100 million not much of that new $100 million was in Q1 or Q2, it's initiatives that we are executing right now will execute through the back half of the year that will give us a very healthy exit rate of EBITDA from Q4 into next year. So a portion of the original 400 has already been captured. I think, we've implemented a total of 400 as of the end of the quarter, but that new 100 will be heavily back-end loaded this year. And then on the second question of kind of headwind in Q1, you're exactly right. All of the headwind that you might have seen is related to the faster expected growth. Two important numbers there, 87,000 total broadband fiber net adds that was a new record by far. And then secondly, faster-than-expected 12-month penetration. We set a new record at 20% after 12 months, which is at the very top end of the range. So those two things combined presented a bit of a EBITDA headwind, but that's a good EBITDA headwind.

Awesome. Thanks guys.

Operator -- thanks, Jonathan. We will take the next question.

Thank you. Our next question comes from the line of Greg Williams with Cowen. Your line is now open.

Great. Thank you. Just curious, you noted that some of the rising cost is due to labor, I imagine a lot of it is. How much of your build labor is in-house versus outsourced and help us with your ability to lock in these contractor rates? You noted the renewals are coming up, because there is concern that another wave of increasing cost could occur as 2024 and beyond, BEAD [ph] money could chase that same labor pool? I'm curious to hear your thoughts there. Thanks.

Yes. Sure, Greg. Let me go through a bit of the dynamic here. So we said about half of the increase in the CapEx related to inventory. Part of that was the really strong operational momentum that we had. Q4 was the biggest build quarter ever. Q1 was not far behind it. But part of that was opportunistic as others have pulled back, we were able to secure equipment at a discount. So that's about half of the CapEx. And then the other half was a combination of new markets and higher labor costs in those new markets and some legacy markets as we reset those. Yes, I think it's -- we are seeing some headwinds and tailwinds related to potential labor costs in the future. Obviously, unemployment in the country is still low and that presents wage pressure, but then also a number of other players have significantly pulled back their builds, construction infrastructure is down, which may offer some labor up to the industry. And so I think it's too early to say exactly where those settle out kind of towards the back end of '23 and into the next few years. On your question about BEAD, I think I give the same answer. It's too early to say. I think there's a lot of still unknowns around the timing of BEAD. When does it get finally allocated to the state. How does the states run their processes and award the contracts to builders. And so we don't see a lot of competition for labor in the near to medium term, but in the out years, you may see some competition from BEAD there.

That’s helpful. Thank you.

Thanks, Greg. Operator, we will take the next question.

Thank you. Our next question comes from the line of Nick Del Deo with MoffettNathanson. Your line is now open.

Hey. Good morning, guys. Just on the inventory front, how do you think about the right level of inventory to hold? I mean, obviously, as a cushion, but it also ties up capital. So I'd just be interested in having you expand on how you think about the right amount and how inventory should trend over time as you progress through the build. And then just on the build cadence, obviously, you reiterated 1.3 million locations for this year. Is it still your expectation that we should think of 1.3 million as being the floor for the coming years?

Sure, Nick. Let me take those. So inventory, I take a step back and say, when we were in this room exactly a year ago, we were in a completely different environment. We were living hand to mouth in inventory and probably building our inventory of equipment was the single biggest risk to the build in pacing to build. That eased in the, call it, the late second half of last year and eased into this year. And we've also accelerated our build. And so we are carrying a higher level of inventory now. You'll see later on today about $100 million more at the end of the quarter than at the end of the year. But we see that as derisking the build. That's inventory that will get used throughout the year and into the future years of the build. And you're right, we're trying to balance two dynamics. We don't want to tie [ph] too much cash with inventory, but we also want to make sure our team has what they need to deliver the build because building fast and then selling fiber is the -- are the two most important drivers of our build. And then on the build cadence, we'd say the same thing that we said last quarter, which is we see ourselves building at least 1.3 for this year and in the out years.

Thanks, guys.

Operator, we will take the next question.

Thank you. Our last question comes from the line of Frank Louthan with Raymond James. Your line is now open.

Great. Thank you. I wanted to ask kind of what you're seeing on fixed wireless and maybe how that's impacting the target market. And I fully appreciate fiber is a better product. I get that. But at some level, there's a market for that. And can you characterize kind of what you're seeing from the competitors there and between the California, Texas, Florida, the old Fios markets and then legacy Frontier. And is that making it any more difficult on your gross adds of the target market? Thanks.

Yes, Frank, it's Nick. I'll take that question. As we've said many times before, FWA is clearly a feature of the market right now. But it really caters to a very different segment and customer proposition than full fiber access. I mean our average fiber customers consume about a terabyte of data a month. And at the top quarter, it's -- a quartile, it's much more than that. And that's because we are selling fiber services to households with an average of 22 connected devices, PlayStations, 4K TVs and so on. And that really is a segment which is not well catered to by fixed wireless access, which is much more something for mobile construction sites, smaller apartments and so on. So the first point to make is they're very different propositions. Second thing is we watch FWA extremely closely as we've said on previous calls. And so far, we do not see a significant impact on our performance, gross add performance or otherwise. And I think that just reflects the fact that they're very, very different propositions. I mean the question, of course, we do have on fixed wireless access, given the extensive mobile network experience that, Stratton has, and I have, and Veronica has, and Ettienne Brandt and Vishal Dixit. So many of our teams come from the mobile segment, and we have a good understanding of the economics there is at what level of usage does FWA become uneconomic, because, as we all know, wireless networks are not engineered to handle the kind of significant data volumes that we see on our network. I mean that's a question for the wireless industry question for you to think about. But the short answer to your question is no, we don't see a significant impact on our performance as a result of FWA. So operator, next question, if we can. Thank you.

There are currently no additional questions waiting at this time. [Operator Instructions]

Thanks, operator. I think we can conclude the call now. Thank you all for joining, and we will talk to you next quarter.