Q4 2019 Earnings Call
Star one on your telephone please be advised that today's conference is being recorded if you require any further systems. Please press star Zero I would now like Panda conference over to your speaker today, Jennifer Bilodeau.
Please go ahead.
Good morning, and thank you for joining us the purpose of todays call. Its review Syntels results for the fourth quarter and your ended December 31st 2019, our results were announcing a press release just released last night in the presentation will be we're getting is included on her better paid at our website Www Dot Shentel dotcom. Please note that an audio replay of this call will.
He made available later today the details are set forth in the press release announcing this fall with its on the call today or Chris French President and Chief Executive Officer, Dave Heinbach Executive Vice President and Chief operating Officer, and Jim bulk Senior Vice President Finance and CFO. After our prepared remarks, we'll conduct a question answer session as always let me refer to slide.
She was a presentation, which contains our safe harbor disclaimer I remind you that this conference call may include forward looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from the statement.
[laughter], you'll find a detailed discussion of various risk factors in our FCC filings, which are encouraged to reveal you are cautioned not to place undue reliance on these forward looking statements except as required by law. We undertake no obligation to publicly update or revise any forward looking statements, but that I'll turn the call, but Chris go ahead, Chris.
Thanks, Jim we appreciate everyone joining us this morning.
As you see on slide four 2019 was a busy in successful year for Shentel.
We completed major upgrades to our networks that have already begun to produce positive returns on investment.
We upgraded our cable networks to DOCSIS, three dot one technology, enabling download speeds of up to one gigabit per second to subscribers across 99% of our footprint.
The network upgrades combined with our new rate card and improvements in customer service and operations drove cable data penetration rates to just over 40% I'm, 37%, a year ago, well broadband churn decreased and impressive 20 basis points year over year.
This year, we also completed network coverage upgrades and distribution expansion efforts at our south and west markets, including the recently acquired markets in the region around Parkersburg West Virginia.
These network in associated distribution improvement were among the key drivers for Shentel to deliver record gross and net ads in the fourth quarter and year ending 2019.
An important part of our strategic plan is to invest a new services that we believe will accelerate our growth in future years.
2019 was a pivotal year in developing and launching our fiber to the home service, which we branded glow fiber.
We're very pleased that we were able to go live in her first market in Harrisburg, Virginia, approximately a year after our board approved the initiative.
I'm very proud of the efforts of the glow fiber team that's stepped up to translate a vision for new service into a revenue generating reality within a relatively short timeframe.
We're just getting started with low fiber as Dave will explain in more detail later on this call, but I'm very excited about the growth potential of this new initiative.
On similar note, we identified pockets of our existing markets that were underserved or had no broadband service at all and created a business plan to deliver a fixed wireless broadband service to these household.
We executed the first part of this effort in 2019 with the purchase up to that five gigahertz wireless spectrum that will cover target market of approximately 300000 households.
We're now in the second phase of development and expect to launch a service offering up to 100 Megabits per second download speed in the second half of this year.
Although both of these initiatives will be dilutive broadband adjusted OIBDA and 20, Connie we have a long history of turning our investments in new services and businesses into contributions to increasing shareholder value.
In addition to organic investments we were also opportunistic in 2019 in completing a tuck in acquisition and our broadband segment.
Big Sandy broadband was acquired in February and added 4800, RG used to our broadband segment and expanded our income with cable footprint into the state of Kentucky.
Lastly in October 2019, our board of directors authorized or for share repurchase program for up to $80 million and we repurchased approximately 200000 shares for an aggregate 7.2 million in the fourth quarter.
I'm really pleased with a great progress we made in 2019 as we continue to execute on our strategic plan.
Turning to slide five consolidated revenues grew 3 million from 2018.
To 633.9 million in 2019, driven by 10.8 million and broadband revenue growth, partially offset by $7.1 million decline in the wireless segment.
The wireless segment was adversely affected by the ongoing dispute was spread in resetting the travel fee.
We recognize 12 million in lower travel revenue in 2019 compared 2018.
We now expect the arbitration hearing to resolve travel fee dispute and early second quarter.
Consolidated adjusted OIBDA was 260.9 million as compared to 264.6 million due to the 12 million travel revenue decline in the wireless segment, partially offset by growth of 3.9 million in broadband 3.6 million in the core wireless business and 600.
Thousands in the tower segment.
Operating income grew 4.1% to 97 million and diluted earnings per share grew 18.3% to $1.10 per fully diluted share.
As noted on slide six we continue to generate strong cash flow normalized free cash flow, excluding the capex for the new glow fiber and fixed wireless services grew 7.9% to an all time record 139.2 million driven primarily by our wireless segment.
We continue to take a balanced view to capital allocation in 2019, we invested 35.5 million in new broadband services 10 million in broadband acquisitions returned 21.1 million a value to shareholders through both our growing dividend and the share repurchase program.
We also used 53.2 million to repay debt to qualify for the lowest borrowing rate and our term loan agreement.
We expect to take a similar balanced view to deploying capital in 2020.
Before I turn the call over to Jim to review, our financial results I'd like to comment on the status of the proposed merger sprint and T. Mobile on February 11, the U.S. judge in the Sprint T mobile antitrust proceeding ruled in favor of the company's while there's still a few additional steps for the company's to complete this ruling appears to clear the.
Path for the merger to close.
As discussed on prior calls and highlight again on slide seven our sprint affiliate agreement provides multiple options that start when the merger closes.
We have only had very preliminary conversations with T mobile on our wireless segment future.
And expect those conversations to pick up in substance over the coming weeks.
We can cannot comment anymore on these discussions at this time, but we will continue to work towards obtaining an outcome that isn't the best interest to our shareholders.
With that I'll now turn the call over to Jim to deliver the details of our financial results.
Thank you, Chris and good morning, everyone.
Before reviewing the financial results I'd like to first speak to the segment changes that we announced last week and are incorporated into the earnings release and 10-K filings that we made last night.
As shown on slide nine we separated our tower and PCGS businesses into two segments from the legacy wireless segment.
We have also combined our legacy cable in wireline segments into a new broad based broadband segment.
The broadband segment now includes our incumbent cable franchises or fiber enterprise in wholesale business.
New glow fiber in fixed wireless services, and our telephone business engender della County.
These changes are consistent with how we allocate resources.
Evaluate performance and better enable peer comparisons these changes do not change Shentel is consolidated results.
Now turning to the fourth quarter 2019 financial results. Please refer to slide 10.
Consolidated revenue was 161 million in the fourth quarter 2019 relatively flat with the same period in 2018 as broadband and tower segment revenue growth of 3.8 billion and 700000 were offset by 4.4 million lower sprint travel revenue, resulting from the ongoing dispute with sprint over.
Resetting the travel fee.
Consolidated adjusted EBITDA for the quarter was 63.5 million compared to 69.1 million in the same period of last year due to a decline in the wireless segment operating income decreased 4.1 million to to 22.9 million.
Earnings per share for the quarter was 27 cents per diluted share compared to 30 cents per diluted share in the prior year period.
And our wireless segment highlights on slide 11.
Wireless operating revenues for the fourth quarter, 2019 decreased 3.5 million to $112.4 million as compared to 115.9 million in the prior year period.
The decline in revenue was due to a 4.5 million decrease in sprint travel revenue.
Partially offset by 1.2 million increase in equipment revenue due to higher postpaid gross adds in the quarter.
Adjusted OIBDA for the wireless segment decreased 70 million to 80 248.7 million in the fourth quarter 2019, compared to 55.7 million in the prior year period.
In addition to the revenue decline of 3.5 million tower rent and maintenance expenses increased 3 million from 107 more sell selling 107 more cell sites at December 2019 versus the same day to a year ago 1.6 million in higher equipment costs due to higher postpaid gross adds partially offset.
By 800000 lower property taxes.
Moving to slide 12 revenue in our broadband segment grew 3.8 million or 8.2% to 49.8 million in the fourth quarter 2019, driven by an increase of 2.8 million in cable residential and small and medium sized business revenue primarily from an 11.5%.
Increase in broadband RG use.
And a 1.1 million increase in fiber enterprise and wholesale revenue.
Broadband adjusted EBITDA for the fourth quarter grew 10% to 21.4 million compared to 19.4 million in the fourth quarter 2018.
The launch of glow fiber diluted broadband adjusted EBITDA by 1.3 million.
Excluding glow fiber, our broadband adjusted OIBDA and margins would have been 16% and 45% respectively.
On Slide 13 Tower segment revenues grew 22.2% two to 3.8 million and adjusted EBITDA grew 21.3% to 2.3 million for the fourth quarter 2019, due to a combination of higher intercompany tower rents that were adjusted to market rates in the quarter and 10.
Percent growth and tenants.
Now turning to the full year 2000, 1970 segment results on slide 14, our wireless operating revenues for two to 2019 decreased 7.1 million to $443.4 million as compared to 450.5 million in 2018.
The decline in revenue was attributed to the aforementioned $12 million decrease in sprint travel revenue, partially offset by 3.2 million increase in postpaid and prepaid revenue from approximately 6% growth in subscribers.
And 1.6 million increase in roaming and NVNO revenues.
Adjusted EBITDA for the wireless segment for 2019 decreased 8.4 million to 204.7 million compared to 213.1 billion in 2018.
In addition to the revenue decline of 7.1 million tower rents increased 10.5 million from 107 more cell sites and higher intercompany tower rent rates, partially offset by 4.3 million and lower backhaul expenses from negotiating lower backhaul rates with vendors and overbuilding high price circuits.
At 99 towers.
We also benefited from 2 million in lower operational taxes, $1.8 million, lower advertising and 700000 and lower retail store rents.
On slide 15.
Revenue in our broadband segment grew $10.8 million were 5.9% year over year to 193.9 million in 2019, driven by an increase of 10.1 million or 8.2% in cable residential in SMB revenue, probably primarily from an increase in broadband ARPU.
3.3 million or 13.4% growth in fiber enterprise and wholesale revenue due to was due to 2 million increase in enterprise revenue and 1.3 million increase intercompany backhaul revenue from replacing high price circuits on our wireless segment, partially offset by 3.2 million or too.
5.3% decline in our like revenues.
Broadband to adjusted EBITDA for 2019 grew 3.9 million or 4.9% to 83.8 million compared to 79.9 million in 2018.
Higher revenues were offset by 2.9 million include fiber expenses 1.6 million in higher cost of service due to the expansion of our network footprint in higher programming and retransmission fees.
$1.5 million higher payroll costs, and 800000 in higher advertising and conditions.
Moving onto our tower segment on slide 16.
2019 revenue grew 6.5% to over year over year to 13 million and adjusted EBITDA grew 8.6% to 7.9 million due to a 10.1% increase in tenants and a 2.5% increase and the lease rates.
Turning to our balance sheet on slide 17 as of December 31, 2019, we had 732 million of debt outstanding with an average interest rate of 3.26%.
Our net leverage ratio was 2.48 using annualized fourth quarter 2019 adjusted EBITDA.
We ended the year with 177 million in liquidity, including 75 million and available revolving line of credit.
Our strong balance sheet cost of capital and cash flow generation will be a key advantage in growing our business long term.
And now I'll turn the call over to Dave.
Thanks, Jim and good morning, everyone I'll start by going over some of our operational highlights from the fourth quarter of 2019.
On slide 19, we show the key metrics of our postpaid wireless business. We had approximately 844000 postpaid subscribers at the end of the fourth quarter.
Net additions for the fourth quarter 2019 were approximately 21000 for postpaid compared to 10000 in the fourth quarter 2018, the incremental net gain year over year was driven by the second consecutive quarter of record phone additions and record connected device additions on the continued strength of terrific local market execution.
Combined postpaid churn rose 15 basis points year over year to 2.05% with phone churn, increasing 13 basis points year over year in connected device churn remaining relatively flat.
Approximately nine basis points of the year over year increase in churn was driven by higher port outs to Verizon as a result, a more aggressive unlimited pricing in the retail business and continued inroads by Comcast extended the mobile in our region. The balance of the churn increase relates to connected device Adeline promo roll off.
In contrast, gross adds increased an impressive 32% year over year by over 17000 with phones, representing 70% of total postpaid activations and up 19% versus the prior year.
Postpaid ARPU declined approximately a $1.93 year over year, driven primarily by spent sprint promotional discounting and to a lesser extent the increase in the mix of connected devices in the base.
This quarter March 9th consecutive quarter, we've enjoyed a positive poured into port out ratio with a one dot oh nine to one ratio for the fourth quarter of 2019.
We have however seen a steady decline in our 40 ratio over the last several quarters as weakness in the sprint brand has begun impacting consumer behavior in our markets, particularly in relation to horizon.
In spite of these headwinds we continue to increase our retail presence and finished the quarter with 178 sprint postpaid branded doors, which was an increase of 10% year over year.
Lastly, 8.6% of our postpaid base upgraded their phone in the quarter and 12.2% of the base was compressed comprised of connected devices, such as watches and tablets at the end of 2019.
Now moving to slide 20, we had approximately 274000 prepaid subscribers at the end of the fourth quarter and prepaid gross and net additions were just over 39000 2400, respectively for the fourth quarter, which was largely consistent with prior year period.
Fourth quarter prepaid churn dropped four basis points year over year to Ford out five 2%, while ARPU increased 44 cents is the mix of our prepaid subscribers on the boost brand continued to increase slightly to 91.2%.
Lastly, we increased our boost branded door locations, 2% to 162 year year, which represents a slower rate of growth than we expected related to the announced plan to sell to boost branded subscribers to dish as part of the sprint and T mobile merger concessions.
Turning to slide 21, and our broadband business total RG use grew 3.4% in the fourth quarter to approximately 169000 compared to approximately 163500 and the prior year. We added roughly 1000 net broadband RG use in the quarter through organic growth and are pleased to report that our legacy broad.
And penetration increased from 37.4% fourth quarter last year to 40.6% this quarter on the strength of our new broadband speeds and rate card average revenue per customer increased to $114.19 year over year, driven by a combination of broadband speed upgrades and annual video price.
Increases.
Substantially all of our homes passed in our cable markets are now capable of broadband speeds of up to one gig per second with approximately 54% of our base in the upgraded areas having migrated to the new powerhouse branded rate card as Chris noted in his opening remarks, the speed upgrades service improvements in new rate card, we launch in the second.
I have 2018 continued to improve customer satisfaction and reduce churn in fact, we've enjoyed eight consecutive quarters at year over year broadband churn improvement with the 19 basis point reduction and broadband churn this quarter as compared to fourth quarter in 2018.
Notably in 2018 over half of our broadband data subscribers run rate plans of 10 Megabits per second we're less whereas now two thirds of subscribers are on plans of 25 Megabits per second were higher with an average subscribed download speed of 63 megabit per second which is well out of the reach of our DSL competitors.
Very pleased with our teams continued progress in achieving our goal of constructing an even deeper competitive moat and the cable markets we serve.
Turning to slide 22, we added 17 towers in 2019 and increased total tenants by 10% year over year to 404, we have 11 towers slated for construction and our 2020 plan and had a backlog of over 140 open orders related to upgrades of existing tenants, where the addition of new tenants at the end of 2019.
We wanted to provide you a brief update and our progress and the launch of our new fiber to the home service glow fiber glow offers a compelling suite of services with residential internet speeds of up to two gigabits per second.
Paired with a whole home Wi Fi offering. We also offer 40 years of video service delivered via our glow branded streaming app in a residential voice offering delivered via voice over IP.
On slide 23, Weve depicted our fiber in cable footprint, including a table to summarize our progress in each glow fiber market construction is well underway and our first four markets, which include Harrison Berg Stanton front ROI on Winchester, Virginia and will also begin construction this year and lunch Bergen sale in Virginia, and just last week received franchise approval.
Roanoke.
Together. These first seven markets comprised just over 77000 target passings.
As Chris mentioned earlier, we launched our first glow fiber market Harrisonburg on October 28, with 1723 households passed at the end of 2019 and as of December 23 years.
30, Onest glow fiber had 126 customers totaling 177, RG use we're seeing the 30% attachment rate for our streaming TV service and a 12% attachment rate for home phone service, which is consistent with our projections.
While still very early we're also seeing ARPU is consistent with our current cable markets and based on our first handful in neighborhoods were achieving a broadband penetration rate of approximately 15%. After 90 days, notably roughly one quarter of our broadband subs are electing our one gig symmetrical broadband service with retails for $90.
And with whole whole home Wi Fi.
As Chris noted at the start of the call. We're also making great progress toward our goal of launching the new fixed wireless broadband offering in the second half of 2020 targeting roughly 300000 rural households across portions of Virginia, West, Virginia, Southeastern Ohio, where we recently completed the acquisition of two to five gigahertz license spectra.
We will continue to update you on status of both our glow fiber and fixed wireless initiatives as we progress in our build plans at launch of commercial services over the next several quarters.
Finally, slide 24 provides an update to our 2019 capital spending results capital expenditures were $139 million at the end of 2019 as compared to $137 million in 2018 for 2020, we plan to spend between 136 and $154 million in capital.
With the year over year increase driven entirely by our investment and our new broadband services the step down in wireless spend year over year relates to a deferral of certain network expansion projects and the Richmond Sliver territory as we await further clarity on the impact to our wireless business related to the sprint T mobile merger.
This plant level of spend in wireless this year is more consistent with the maintenance level spend assuming no additional territory expansions and it relates to maintain sufficient capacity for both the increases in data consumption.
Of our existing subscribers as well as anticipated subscriber growth and our existing territory.
So thank you very much and operator, we are now ready for questions.
Thank you as a reminder to ask a question unions Press Star 100 telephone to withdraw your question press the pound Keith. Please stand by we can probably going a roster. Our first question comes from Rick Prentiss with Raymond James Sir You May proceed with your question.
Yes, hi, good morning, guys.
When it Greg good morning, Rick.
Hey.
Couple of questions first I know you can't talk much about it but with the sprint T mobile deal looking like it's got a good shot closing April one what is the process. Chris I think you said something about very preliminary but pickup in the coming weeks is that something.
That you think we might get a resolution on within the second quarter or how long might that process drag out.
Yes, Hey, Rick this is Dave.
The agreement as as you know contemplates.
A waterfall of events.
Were and assuming April one.
We've we've got 180 days to negotiate and addendum per per the agreement. So that takes us out to let's say October one.
And then.
If we can't agree.
On an addendum to the agreement then.
New T mobile with would have 60 days to exercise their their purchase option of our wireless business, which would take us out to December one and if they declined to do that than we get 60 days to exercise our purchase option of of their subscribers and network and our and our footprint.
And that would take us all the way out to February Onest of 2021 so.
As you know the parties could negotiate something outside the agreement.
As as well and as Chris noted, we've we've been in preliminary discussions with with the folks at T mobile.
Yes, Rick. This is this is Jim just add to that if if there is a brand conversion.
T mobile decides to use their brand then everything would accelerate by roughly that 90 days.
Okay that makes sense.
So we know T mobile wants to move things as fast as they come from their side because they just feel.
The spreads I was deteriorating fast not a new but on this front side. As you noted also spreads had some problems.
Okay second question.
The 274000 prepaid customers what happens with sprint T mobile deal closes what's your anticipation of when that dish deal with close and how does that affect your prepaid base.
Well, our prepaid base in our postpaid base are really one in the same with respect to how.
We.
Would characterize our our wireless business in wireless segment and so as I think you know they were excluded.
And some of the public commentary related to the merger and so we would anticipate negotiating with new T mobile.
We're pointing to the agreement and the waterfall events with new T mobile.
With the prepaid subscriber base consistent with with how we would think about the postpaid subscriber base.
Okay, and then final one.
When we think about.
Market share in the wireless world.
If you think about your before you expanded into Parkersburg and Richmond.
What kind of penetration rates in wireless where you guys having of covered Pops and what do you think T. Mobile's market share is in your territories.
Well if you go all the way back to pre and Telos. We were we were in the mid 20% range.
Rick and then of course that got diluted with taking on additional territory related to the Intel as acquisition.
But our most mature markets have have historically performed at around that level.
We have we have some.
Subsets of those mature markets, well well above that some even approaching 50%.
And so our overarching goal as we modeled territory expansions was due at a minimum.
Get to about a 20%.
Market share.
And.
And we.
Don't have any reason to believe that that we couldn't achieve that and certainly we'd be more than willing to drive agenda and see how that would work for us as well I'm sure. It would work quite a bit better than spread brand.
If you think about the magenta caliber is out there.
What what penetration rate do you think they have in your markets currently.
We estimate.
And it's our it's kind of our own analysis, we estimate probably roughly half of what we've got.
Okay. So so in the high single digit to maybe a double digit range.
Yes, So said differently Rec, we think we reckon they have roughly about half the number of subs that we do okay. Great. Thanks, guys going to be an interesting here.
You bet.
Thank you. Our next question comes from Zacks Silver with B. Riley FBR you May proceed with your question.
Okay, great. Thanks, I wanted to follow up on Rick's question around how sort of the.
Your wireless business evolves in the context of sprint team now and I guess the first one is just.
This has been pretty vocal about looking for both infrastructure partners and retail partners as it enters the wireless space you guys check certainly shack both of those boxes can you remind us.
How the dish piece of that chemo spread consent decree effects, what you decide to do with the wireless business.
You want to field one Jim.
Yes Zack.
So our agreement with sprint, which T mobile would assume when the transaction closes.
Is a holistic approach to either with a exercise their option to purchase the whole of business, where we exercise that they decline we would have options to purchase their legacy.
Subscribers and network in our in our service area. It Doesnt contemplate any subset of that so anything related to the boost customers Virgin mobile customers I guess that are now being.
Converted to do this would have to be done through a separate negotiated transaction.
And until that or will be part of the larger transaction and until that occurs we'll continue to service those customers and and sell under those brands and receive.
The same revenue that we're receiving today under that.
Okay, I think I think thats fairly straightforward.
Then yes second.
Related is just I think we've talked about this before but you guys have invested a lot of both capex and opex in.
Lighting up that you acquired spread territories, you Havent at least I think for rich menu Havent had enough a lot of time to sort of ramp up penetration there.
So you're not getting potential subscriber contributions and the financials and when you think about.
Whether it's at private negotiation or an appraisal process, you remind us how you get credit.
For those sort of more fallow territories.
Yes the agreement.
Contemplates.
A structure, Zach where whereby we would get the greater of the return on investment.
From the investments we've made in those territory expansions or where the the capital that we had spent if we were not that there was not sufficient time for us to recover.
Our investment in those growth.
Territories.
And I think we've mentioned this before but we we really didnt expect much in the way of incremental subscriber growth. This this year in 2020.
Contributed from the Richmond, Slivered territory that was really more of a 2021 phenomenon.
And.
And so we don't foresee any.
Slowdown specifically attributed to the lack of contribution from Richard Sliver This year.
Got it and last one for me I think a couple of quarters back you'd mentioned that.
Due to the uncertainty around the yes, I guess addition announcement out with food yeah. Some of that dealers had pulled back activity.
This quarter, you're saying that.
The store growth is not as as high as you expected by that.
Yes, that's certainly makes sense, but I'm just wondering if you're if your detecting any.
Yes pull back and activity from the existing dealers.
Yes, I guess quarter to date year to date.
Well, yes, I mean look Zack.
I think it's reasonable to assume that there are a lot of folks that have a lot of unanswered questions with respect to how the merger is going to impact their businesses, particularly in third party distribution channels and we have a substantial portion as you know of our footprint, where we rely on third parties and that's true of both pre.
Hey, Dan postpaid so.
We're.
We're trying to manage that best we can but certainly it is difficult and becoming more difficult now that the.
The judges given his blessing for the the merger to proceed.
And so yes, we have uncertainty related to the boost brand with respect to the prospect of a new owner in the form of dish, but but also on the postpaid side, where folks are a little uncertain as to what their status will be in a in a new T mobile world.
Okay that makes sense. Thank you.
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Thank you and as a reminder to ask a question units Press Star one on your telephone. Our next question comes from the he'd course and with.
Vws financials you May proceed with your question.
Good morning, Thanks for taking my question.
I think a different tax on the sprint T mobile conversation.
Looking forward in for the next year once the deal closes.
Can you provide some color on Q, how you think are too.
With regards to Sprint's promotions T mobile promotions is going to look.
I wish I could.
Okay.
The.
It is unclear to us that at this point, what what exactly is going to come of the sprint rate card and promotional discounting and so on and so forth in the context of of the merger.
Yes, we do know that there have been a lot of public disclosures about.
Yes, no price increases and so on and so forth as part of the behavioral remedies associated with the merger.
But we are uncertain as to what kinds of offers are going to going to hit the market with with respect to bring in these two brands together. So we're going to take that one one data time right right with you.
Okay.
Next question, so I'm wondering on ARPU.
As you are doing the go fiber.
Rollout.
Does that are you promoting to get the customers to sign on is that going to impact ARPU next year.
We are not in fact running any promotions whatsoever, we have gone to market with the standard rate card and been quite disciplined about that we are.
Contrary to what.
A lot of folks doing the industry not not taking a.
Get get it get it now for half price for for six months or 12 months kind of an approach we are taking a very transparent approach to the rate card.
Selling services with whole numbers instead of 99 to the at the end of the.
The pricing tag line, and and trying to be very transparent about any fees and taxes surcharges and so on and so forth which is.
Why I pointed out the fact that.
Roughly a quarter of our subs are taking gig speeds. It at a rack rate of $90. A month. So we're quite pleased with that and I think it really demonstrates the markets willingness to.
To pay pay for value provided by someone other than.
Comcast.
Great. Thank you very much.
Thank you and I'm not showing any further questions. At this time I would now like to turn the call back over to Jim bulk for any further remarks.
Well I'd like to thank everyone for joining the call. This morning, and we will keep you posted as we March forward here into the new year in lot of the new developments us it looks like it's going to be an exciting year. Thanks, everyone.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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