Q1 2020 Earnings Call
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After the speakers presentation, there will be a question and answer session. The ACA question going the session you wouldn't be surprised solid and one on your telephone. Please be advised that today's conference is being recorded if you acquire any further assistance. Please press Star then zero.
I would now like to hand, the topic. So what's your speaker today, John Nesbett, I am meth and Investor Relations washing fail. Please go ahead.
Good morning, and thank you for joining us the purpose of today's call distribution tells results for the first quarter 2020 results were announced in the press release distributed this morning, and the presentation will be revealing is included in our investor page for website Www Dot Shentel Dotcom. Please note that an audio replay of this call will be made a daily.
A little later today the details are set forth in the press release announcing this call.
With us on the call today, or Chris French President and Chief Executive Officer Daytime Dark Executive Vice President Chief Operating Officer, Jim Book, Senior Vice President Finance and CFO. After our prepared remarks, we will conduct a question answer session as always let me refer you to slide to the presentation, which contains are safe Harbor disclaimer reminds you that this conference call me.
Include forward looking statements subject to certain risks uncertainties. These may cause our actual results to differ materially from the statements and provided detailed.
Discussion of various risk doctors and nurses he filings which are occurs to review.
Caution to not 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. Okay with that I'll turn the call over to Chris now go ahead, Chris.
Thanks, John.
We appreciate everyone joining us this morning, and I hope everyone is healthy and safe.
These are uncertain times as we all try to navigate the impacts of the covert 19 pandemic and work towards a rational and safe return to some sense of normalcy.
I want to start, but first thinking or employees and members of our management team.
I couldn't be more proud of how they all quickly and efficiently adjusted to a new way of doing business.
In an extremely short amount of time, we were able to implement many practices to address employee safety, while continuing to deliver our services to customers, who are relying on our central services and networks more than ever.
Slide four provides a high level outline of some of our actions taken to protect our employees as well as our customers and communities.
With telecommunications deemed into central service, we were able to seamlessly continue most of our customer facing operations. Although we did have to temporarily close about 40% for sprint branded retail stores.
Additionally, you can see several growth initiatives, we implemented to benefit our customers during this difficult period.
The temporary changes include upgrading broadband speeds of more than 27000 customers to a minimum of 50 megabits per second increasing broadband data allowances.
Spending disconnects for customers unable to pay due to coven 19 in introducing a lower cost prepaid broadband plan.
Jim and Dave will provide more details and their reports, but you'll see that our broadband and tower segment results were generally unaffected by Cove and 19.
And our wireless segment, we had good financial results, but the pandemic impacted subscriber growth.
Wireless recurring revenue from EUR 1.1 million PCR subscribers remained steady, but postpaid subscriber sales momentum began to slow in the second half of March as result of the temporary closure sprint branded retail stores in the stay at home directives.
We expect this interruption will continue until communities more fully reopened.
I do not expect that the long term growth prospects of our wireless business will be materially affected.
Moving to slide five you see our growing cash flow generation strong liquidity and modest leverage and position us well to weather the economic downturn driven by Kogan 19.
Normalized free cash flow for the first quarter 2020 more than doubled to 36 million from the same period, a year ago, driven by the strength of our wireless segment.
As of March 31, we had 195 million in liquidity with a net leverage ratio of 2.4 based on approximately 600 million of net debt in annualized first quarter 2020, adjusted operating income before depreciation and amortization.
Despite the current economic uncertainties are businesses are continuing to grow and our strong balance sheet positioned us well for new growth opportunities.
In addition to the Pan dimming.
Our Pcis operation also faces uncertainty as result of the recently completed April Onest business combination of T mobile and sprint.
With that merger closed on the first Timo will deliver to the company a network technology brands in combination conversion notice pursuant to the terms of our affiliate agreement with sprint.
As outlined on slide six this notice starts a 90 day period to negotiate mutually agreeable terms and conditions under which we would continue as an affiliate of T mobile or other alternative transaction.
If the parties have not reached a mutually acceptable agreement by June 30.
T mobile will have a 60 day period to exercise an option to purchase the assets are pcis operations.
For 90% of the entire business value through an appraisal process as outlined in our affiliate agreement.
If T mobile does not exercising purchase option. So until then have a 60 day period to exercise an option to purchase the legacy T Mobile network and subscribers in our service area.
If we do not exercise our purchase option T mobile most and so are decommission this legacy network and customers under service area.
We're focused on entertaining and outcome that isn't the best interest of our shareholders. As we work through this process. We will not provide any additional updates were making any additional comments regarding ongoing negotiations with T mobile unless and until it's appropriate to do so.
With that I'll now turn the call over to Jim to review the details of our financial results.
Thank you, Chris and good morning, everyone.
Please refer to slide eight.
Consolidated revenues were 153.2 million in the first quarter 2020, as compared to 158.8 million in the first quarter 2019.
The change was due to an 8.5 million decline in the wireless segment revenues, partially offset by strong growth of 2.9 million and 700000 into broadband in towers segments.
The primary driver in the wireless segment change was due to a 4.5 billion decline in sprint travel revenue in the first quarter 2020, resulting from the ongoing dispute with sprint are resetting the travel date.
The binding arbitration hearing for the spring traveler fee is scheduled for later this quarter with a willing expected shortly thereafter.
Consolidated adjusted EBITDA for the quarter was 64.2 million compared to 67.7 million in the same period of last year due to the due to the pending sprint dispute.
Ics, excluding sprint travel revenue consolidated adjusted EBITDA increased 1.6%.
Turning to slide non consolidated operating income was 23.1 million for the first quarter 2024 down 1.7 million from a year ago.
Earnings per share per share for the quarter was 27 cents per diluted share compared to 28 cents per diluted share in the prior year period.
The sprint travel revenue decline was the primary driver for both declines.
Turning now to our saying that results on slide 10.
Our wireless revenues for the first quarter 2020 decreased 8 million to one or 4.1 billion for the same period a year ago decline in revenue was due to a 4.5 million decreases from travel revenue as mentioned earlier, a 3 million decline due to higher amortized customer contract costs that are.
Netted against revenues.
And the 2.5 million decline in equipment sales as more customers bought stones online or through core through third party dealers.
Partially offset by a 1.7 million increase in postpaid and prepaid revenue growth in subscribers.
First quarter 2020, adjusted EBITDA for the wireless segment decreased 5.4 million.
Year over year to 49.2 million.
In addition to the revenue declined 8.5 million.
Our rent expense increased 1 million from 92 more cell sites at March 2020 versus the same day to a year ago.
Partially offset by 1.9 million decline in equipment cost of goods sold.
1 million in lower advertising expense.
800000, onetime sale can use tax refund.
Moving to slide 11.
Revenue in our broadband segment grew 2.9 million or 6.2%.
To 49.8 million in the first quarter 2020.
Driven by an increase of 2.5 million in cable residential in SMB revenue.
Due primarily from a 9.9% increase in broadband RG use and lower bundling discounts and promotions.
Steve will expand on shortly we have great momentum in broadband growth in both our income that cable and new CLO fiber services.
Fiber enterprise and wholesale revenue grew 1.1 billion due to an increase in enterprise and bat backhaul circuits, while our lack revenues declined 550000, or 9.7% lower DSL and switched access revenue.
Broadband adjusted EBITDA for the first quarter grew 4.3% or 900000 to 20.9 million compared to 20 million in the first quarter 2019.
As expected launch of grow fiber diluted.
Broadband adjusted EBITDA by 1 million in the first quarter, excluding gold fiber, our broadband adjusted OIBDA growth rate and margins would've been approximately 9.5% and 44% respectively.
On Slide 12 power segment revenues grew 22.9% to 3.7 million in.
And adjusted EBITDA grew 25.5%.
2.3 million for the first quarter 2020, due to 10.9% growth and tenants.
And an 11.4% increase in average lease rate.
And now ill turn call over to date.
Thanks, Jim and good morning, everyone on Slide 14, we show the key metrics of our postpaid wireless business. We had approximately 848000 postpaid subscribers at the end of the first quarter.
Until the impacted the Corona virus pandemic took hold in the second half of March postpaid gross adds were up 8% year over year. However, as Chris mentioned, approximately 40% of our sprint branded retail stores were temporarily closed in the second half a march which drove a 13% reduction in sales through our dealer channel year over year.
Was only partially offset by increases in our national and web channels.
As a result postpaid gross adds for the first quarter 2020 were up only slightly year over year with the mix of phone and connected device additions roughly in line with the same period in the prior year.
Postpaid net adds were driven entirely by connected devices for the first quarter 2020 and were approximately 3600 as compared to 5800, the first quarter 2019.
While the mix of phone versus connected device net adds in the quarter were similar to the first quarter in the prior two years, we estimate that had we maintained consistent gross and net trends throughout the month of March we would have posted positive net phone adds in the quarter.
Lastly, 5.6% of our postpaid base upgraded their phone in the quarter and 12.9% of the base was compressed prized of connected devices, such as watches and tablets at the end to 2020.
Combined postpaid churn was flat year over year at 1.9%.
As others in the industry have reported we to expect our voluntary churn to decline commensurate with the drop were seen in postpaid gross adds as overall porting activity has declined and will likely persist through at least the second quarter.
Turning to involuntary churn as a result of a new collections policy enacted by the new T. Mobile in April after the close of the merger non pay disconnects had been accelerated by approximately one month.
As such we expect during voluntary disconnects to double in the month of April before returning to normal levels.
We've also supported spreads adoption of to keep America connected plays pledge, which has temporarily suspended non pay disconnects related to the corona virus for approximately 4% of our postpaid subscribers and will likely also caused an increase in involuntary churn once the pledge expires likely by the end of the second quarter.
Postpaid ARPU declined $1.96 year over year, driven primarily by sprint promotional discounting and to a lesser extent the increase in the mix of connected devices in the base.
However, amidst all of this dislocation as a result of the pandemic this quarter marks the 10th consecutive quarter. We've enjoyed positive poured into port out ratio in postpaid with a one dot Oh wait to one ratio for the first quarter 2020.
As we previously reported we've seen a steady decline in our porting ratio over the last several quarters. This weakness in the sprint brand as we got impacting consumer behavior in our markets, particularly in relation to horizon.
Moving to slide 15, we add approximately 279000 prepaid subscribers at the end of the first quarter 2020.
Prepaid gross and net additions were just over 39000 5000, respectively with first quarter churn consistent with prior year.
We were pleased with the performance of our prepaid business, which was inline with our expectations. In spite of some weakness in gross adds as a result, a pandemic driven reductions in retail traffic and some more recent competitive inroads by metro and the cable MBS knows.
First quarter ARPU decreased slightly by 21 cents year over year as the mix of our prepaid subscribers on the boost brand increased to 99% with spreads transition of Virgin mobile branded subscribers to the boost brand.
Turning to slide 16, and the broadband business total income and cable or to use grew 1.5% in the first quarter two approximately 171000 compared to approximately 168800 in the prior year.
We added roughly 3000 net broadband RG use in the quarter through organic growth, which is a 50% increase to the prior year period, and we're very pleased to report that our legacy broadband penetration increased from 38.3% in the first quarter last year to 41.7% this quarter on the strength of our new broadband speeds and rate card.
Hi band data churn declined five basis points to one dot for 8% the first quarter, which represents the 12 consecutive quarter of year over year churn improvement.
Average revenue per customer increased to $114.62 versus prior year, driven by a combination of broadband speed upgrades in annual video price increase.
Substantially all homes passed in our cable markets are now capable of broadband speeds of up to one gigabit per second with approximately 64% of our residential base in the upgraded areas having migrated to the new powerhouse rate card. This time last year.
Roughly half of residential subscribers run rate plans of 10 megabits per second or less.
Now 69% of subscribers are on plan to 25 Megabits per second our higher with an average subscribed download speed at 64, Megabits per second which is well out of the reach of our DSL competitors.
We are achieving our goal of constructing and even deeper competitive both in the incumbent cable markets we serve.
Turning to slide 17, we launched three additional markets with our glow fiber service in the first quarter 2020 more than doubling our homes passed to approximately 5300.
Both fiber had 453 customers at the end of the first quarter with an 8.5% total penetration rate and 682 total RG use.
We are seen at 33% attachment rate for our streaming TV TV service and an 18% attachment rate for home phone service.
Both of which are significantly exceeding our initial projections.
And our first cohort in neighborhoods inherited some Virginia, we're achieving an aggregate residential broadband penetration rate of approximately 15% after 90 days with some neighborhoods exceeding 25% penetration.
Glow fiber product level ARPU is ahead of our expectations as well on all three products in the Triple play with one particular bright spot of note. Our one gig symmetrical broadband service one gig speed tiers, achieving a nearly 30% adoption rate retails for $90 a month with whole home Wi Fi, which in spite of a higher pricing Comcast.
One gig service demonstrates the value consumers clearly perceive and a symmetrical fiber based reliable offering from a regional provider with local customer service.
On slide 18, we depict that our fiber and cable footprint, including the table to summarize our progress in each glow fiber market.
Construction is well underway in our first for active markets, which include Harrisonburg, Stan front Roiling Winchester, Virginia.
We'll also began construction this year in Roanoke, Lynchburg, and sale in Virginia with a plan commercial launch in the first half 2021.
Together these for seven markets comprised just over 77000 residential and commercial target passing.
We also continue to make great progress toward our goal of launching a new fixed wireless broadband offering in the second half of 2020 targeting roughly 300000 rural households across portions of Virginia, West, Virginia, and southeastern Ohio, leveraging our recently acquired two that five gigahertz license spectrum.
We now have active beta customers on the new fixed wireless network, achieving 100 megabit per second download speeds far exceeding offers by DSL satellite and with competitors and these on cable to areas of our spectrum footprint.
We will continue to update you on the status of both our glow fiber and fixed wireless initiatives as we progress in our build plans and launch of commercial services over the next several quarters.
Turning to slide 19, we added one new tower in the first quarter 2020.
Tenants increased 10.9% year over year to 408.
We had a backlog of 128 open orders related to upgrades of existing tenants, where the addition of new tenants at the end of March 2020.
Finally, slide 20 provides an update to our 2020 capital spending results.
Capital expenditures were $32 million in the first quarter compared to $44 million in first quarter 2019.
For 2020, we're updating our capital spending guidance to between 125 and $148 million with all the reduction to prior guidance reflected in our wireless segment.
As we previously disclosed we have temporarily deferred certain wireless network expansion projects in the Richmond Sliver territory as we await further clarity on the impact to our wireless business related to our ongoing negotiations with the new T mobile.
However, with our strong liquidity and cash flow generation, we continue to invest aggressively in our broadband and fiber networks. Despite the corona virus induced economic uncertainty and our current operating environment.
Thank you very much in operator, we're now ready for questions.
Thank you as a reminder to ask the question you want me to press Star then one on your telephone to withdraw your question. Please press the pound key again that is star then one if you would like to ask the question.
Our first question comes on the line of Ric Prentiss with Raymond James Your line is now open.
Good morning.
Hope you guys in your family employees are doing well with the coated made to stay safe.
First question I have for use with Covance 19 impacting appreciate the color on the postpaid stores, how about on the prepaid side, how many prepaid stores have been closed and and what do you expect the impact might be on prepaid side of the business.
Hey, Rick Good morning. This is Dave thanks for the well wishes and hope the same is true of you and yours as well.
On the prepaid side of the business, Rick we did see a modest impact, but it was far less than on the postpaid side most of our prepaid dealers are in strip malls and.
And not malls per se, we're we're big retail.
Establishment and designated as essential services managed to for the most parts. They opened there were some temporary closures there, but they didn't last long and substantially all of our prepaid doors are open at this point so.
The US you know the results that we saw there and prepaid which I think exceeded your expectations and were generally in line with our expectations for the first quarter.
That's good.
And speaking of prepaid how does the anticipated sale of the boost brand from the new T mobile to dish affect you guys and do you have an uptick thought on when that might occur we hear it might be happening soon.
Yes, our affiliate agreement as you know is with sprint and the agreement contemplates both postpaid and prepaid and so as we continue in our negotiations with T. Mobile our position is we're negotiating on behalf of all of our subscribers not a sub a subset so.
As you know the the prepaid subs were excluded in the arrangement that the addition T mobile.
Came to us as part of the the approval process, there and and that's still the current state as we as we sit here today.
And speaking of the sprinting when the window for as you said no updates on the negotiation until there is something to say, but conceptually back on slide six would have talked about the timeline.
How many subscribers do you guys think T. Mobile has in your footprint is it about that half level like 600000 subscribers that might be in your footprint. If it were to go down that option to standpoint, and if so how do you feel about your ability to fund if it was to go down option.
Too as far as you buying in footprint.
I'll answer the first part.
Rick and then I'll I'll see if Jim to answer the second part on the first part we would just be speculating on the number of of T mobile subs our own analysis.
You know that that is.
We got some help with some third parties to do suggests it's we think they have roughly half the subs that we do but we don't know for sure.
And so I think thats, probably a better question to ask the T mobile guys, if they want to disclose that.
We are uncertain as we sit here in terms of financing Jim do you want to handle that one.
Sure Oh, Yeah Rick.
The agreement outlines.
Yes, two ways that we could purchase these assets it may decline or option on our wireless business. One of them is 75% costs the enterprise value per subscriber.
That T mobile had immediately before the merger closed.
That number is around $5800 per so which would imply yellow purchase price per sub of about $1100.
If you assume we percent.
EBITDA margin that would imply a purchase price of around 5.8 times, which we think is very attractive something we'd be very interested in doing.
But as you know T mobile comes to that first before we have access to that option.
Great I appreciate that and then finally, one for me any thoughts about what.
Cobot 19 means as far as ARPU trends I know, usually overages are being way, but any thought on what might be trends in ARPU in postpaid and prepaid.
ARPU trends.
As you know record tough for us to predict.
Given the fact that we sell off the sprint rate card nationally.
And so as as I'm sure you would note you know we've seen a a modest decline sequentially and.
In year over year and in postpaid ARPU and we don't see any reason for for that to materially change in terms of the trajectory.
Related to covert 19, I think most of what were a tuned into on the cobot 19 impact.
It's going to.
Relate to this interplay between involuntary churn and voluntary churn and and you know on on the whole.
We think but don't know that you know with the reduction in and voluntary and involuntary churn category. Even in spite of some some uptick in the involuntary churn category that on the whole we should be.
Relatively in line with with what we hit had expected, but you know we're monitoring that situation closely but ARPU is a tough one for us to Bruce predict.
Good thoughts or whether you guys and everybody as we go through this difficult time, thanks for taking the questions. Thanks, Rick Thanks, Rick Yep. Thanks.
Yeah.
Thank you. Our next question comes on the line that will work being body FBR.
Your line is now open.
Okay, great. Thanks for your question and glad to hear that you all are safe and well.
The first one for me I know that.
Yes, Kevin I talk about how the discussions around the potential new affiliate agreement are going but hypothetically speaking if.
Yes, T mobile were too by.
The Dcs business anywhere to get add significant cash infusion from the sale of that.
Could you talk about what priorities would be for the use of that cash whether it be rod and more communications infrastructure or return of capital.
Any color there would be helpful.
Yes, ACA I'd like to take that one I think well one it's certainly premature to to discuss the uses of proceeds is we're out yes.
Still in discussions with T mobile at this point in time and not sure which direction. This is going to go.
Roger in General I would say that we'll look to.
Potentially returns on cash to shareholders and if there are some insight is full acquisitions, we'll certainly consider that in the ability to fund that with proceeds.
But it's not likely that these.
A large sum of money sitting there without intended purposes for.
That makes sense and then.
When do we think about.
But the legacy broadband footprint as well as some of the new.
Secondly for that the new CLO glow fiber builds with Covance.
Are you seeing any difficulties in terms of marketing.
Installations, and perhaps longer term.
But this more self installs more digital.
Buying by through digital channels could that potentially be a boon to your long term.
Margin trajectory in the business.
Hey, Zach this is Dave good morning, Oh field that wanted to.
Yeah, you know we had been very very fortunate thus far in our in our broadband growth ambitions to.
As Chris noted in his opening remarks, not that really have seen any material impact from from cobot 19.
In fact.
This might surprise you, but you know.
Our door to door sales.
[laughter], which we rely on for our glow fiber growth strategy.
Has largely proceeded unabated.
Although with new safety measures and not entering customers.
There is homes and you know wearing masks and conducting.
Business six feet away and so forth, but as you might expect a lot of people are home right now.
Oh and with a lot of people home.
They're able to answer the door and interact with our folks and and that's a that's been a pleasant.
Prize and all of this.
And candidly I think folks a welcome the distraction from from shelter in place.
We have seen a bit of a mixed bag on.
On permitting.
And make ready.
And our construction engine a in a couple of the municipalities that we're building in but but that's been offset by.
A couple of the other municipalities asking us to.
Accelerate because they they recognize the critical need for broadband infrastructure at this time and they welcome to the competition in investment we're making so so you know on on balance I would say that we're doing a as well as we expected to in spite of code.
At 19 in terms of channel mix on a go forward and you know more turning to digital.
Yeah, we we we expect that overtime.
That that that that will continue to to increase and we do expect.
You know some improvements to our cost structure, and and ER and not having to pay folks commissions for sales that come in through the online channel and really I think that that benefit will mostly start to accrue as we get further scale.
You know in that business because right now certainly most of the inquiries were getting for gold fiber or when are you going to be in my neighborhood and Ah, which is a great great prop and a half so but but yes, we would expect some more.
It's an improvement down the road as a digital sales.
Increase.
Got it. Thank you and then one more if I could just on that.
There was some churn impact that you guys were talking about that.
You see in the second quarter from the first was the keep America connected to that and then I think there as you say something about T mobile.
Yeah sure about about the way that.
You know disconnects I recognize there just if you could go through that again that would be.
Helpful.
Yes so.
Both of those relate to postpaid wireless and <unk>. We saw in the first 10 days of April or so is.
Essentially a new nonpaid treatment.
Elections policy was enacted that accelerated non pay disconnects by about a month or zac and that that.
That drove that big a onetime blip and and the processing of non pay disconnects.
You know as we've moved through throughout the course of the month with the offsetting.
Lower voluntary churn that we're seeing as a result of reduction in porting activity with just the general reduction in activity.
Nationally and wireless we're actually kind of.
Offsetting that that onetime blip.
That we saw in the involved.
Bucket.
And.
And I would say were restoring too you know <unk>, what we had expected the turn result to be for that for the second quarter. Thus far what we're uncertain about is to keep them keep America connected pledge appears to.
The impacting about 4% of our postpaid base. So call. It 33, 34000 subs somewhere in that the code and you know those folks are or are you know getting the temporary.
Stay.
So to speak in terms of you know there they're impacts from from code at 19, and we're uncertain. How many of those will eventually turn into a full non pay disconnect versus versus not so that's a bit of a linger.
Green issue, we expect to persist through the balance of the second quarter I think.
Chairman Pie if he has an already.
You know has been has been working with some companies and some companies have already voluntarily announced that there can extend that pledged to the ended June and so so we expect you know there to be a tail on that and potentially for that that a bucket of subscribers to grow here over the next quarter, but you know, we'll just have to keep a close.
So on that one.
Got it thank you guys.
Sure.
Thank you as a reminder to ask a question you want me to press Star then one on your telephone.
Our next question comes on the line up on like orphan with VW and financial your line is now open.
Hey, good morning, just.
A follow up on the comments you Smith.
What.
What our current situation as Jim I'll, let you chime in on that on the bad debt Reserve front, if theres anything.
To report there, but but essentially you know what what we're seeing right now is temporary dislocation I met and in terms of you know the uncertainty related to the.
There were the revision in the policy that got created by New T. Mobile. In addition to this keep America connected pledge and what the the short term impacts to to two non pay in receivables will be as a result of those those are pretty tough for us to predict right right now.
As as we sit here it didnt have any material impact in the first quarter.
But but that's basically what we're signing a light on for you to say that yeah. We're seeing a reduction in gross adds a that I think you'd just pointed out a and we expect that that reduction gross adds will abate.
As we move through the second quarter here, and we start to see signs of governors reopening.
You know states and retail business activity a quarter, our stores or for the most part opened at this point and still servicing customers, but we're seeing a big reduction in traffic as you might expect and so like that's true nationally.
Jim do you want to you want to comment on any kind of additional reserves or anything.
Oh that we might be considering.
Sure, Yes, we did not make any additional reserves the bad debt.
Wireless word broadband access the in March.
We're monitoring Dan I would expect.
Bad debt there was a line factor.
When the via that it's the financial piece of the when the voluntary disconnect occurs. So we are going to be monitoring it in the second quarter, we would expect an uptick in though.
The it dead in the second quarter for broadband in wireless, but based upon the numbers. We're seeing today I don't think it's going to be signals.
Okay, and then could you talk about this the competitive aspects of wireless market right now I know you talked about horizon earlier.
Ticking advantage the sprint brands situation.
Are you seeing that even with what pandemic going on I know your churn still remained elevated throughout Q1.
Yeah on that we as we reported to you last quarter as well we have seen an uptick in.
And port outs to rise and in particular and our territory.
Versus what we've seen this time last year or even in a in the second and third quarter of of last.
You're in and so that's really coming on two fronts. One is there a their new unlimited retail pricing.
As well as somebody in roads that Ah that Comcast is making.
As you know there there of rising up you know and Comcast cable footprint has about a 50% overlap with our.
With our wireless footprint, so I'd say the most material change.
That where we're seeing on the on the postpaid front is with horizon, the rest of the carriers, including T mobile.
Have largely been consistent with prior quarters in terms of the trends where we're seeing.
On the prepaid side you know, we we we have a as I mentioned in my prepared remarks, we have seen.
Some modest competitive and roads.
In the central PA.
Portions of our footprint by up by Metro.
And and to a lesser extent some some inroads by the Cape cable when Dnos on on the prepaid side, but but I would say at this point you know those those are just modest upticks nothing material, but but a little bit different trend and then what we'd seen in.
In prior periods.
Okay and last one for me is on the ARPU side, just given there's increasing devices with what our people continue to decline going forward.
Ah that's been the trend and I can't come up with a good reason how bad to say that the trend is is going to to to materially changed from what it has been again, we don't control pricing. That's that's done through spread and now the new T mobile and and so.
To your point as the mix of connected devices increases in the base you know those those have about one third the ARPU.
And twice the churn rate of what we see on on phones and ER and so as a result that that will have dilutive impact on on ARPU going forward and I think you know the bigger it impacted that we see candidly is on you know spreads promotional discounting, particularly on the device front.
And how will that change as the new T. Mobile you know gifts and rationalize the sprint rate card and and promotions and plans and so forth.
You know we were uncertain all I can say is that sprint's sprint's issues are now people.
Pulls issues and so my expectation is that a you know some some more rational behavior will start to the to come into the into play here is as we get further into the year and we would welcome that.
Great. Thank you.
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Thanks, and then.
Thank you you have no further questions in the queue at this time.
Oh Man. This concludes today's conference call. Thank you for participating we may now disconnect.
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