Q2 2020 Shenandoah Telecommunications Co Earnings Call
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Welcome to Shenandoah Telecommunications second quarter 2020 earnings conference call.
Today's conference is being recorded.
At this time wed like to turn the conference over to Mr., John Nesbett biomass in Investor Relations for sure.
Good morning, and thank you for joining us.
The purpose of today's call. Its review Chantilly results for the second quarter 2020.
Our results were announced their press released distributed this morning, and the presentation will be reviewing is included on our Investor page at our website Www Dot Shentel Dotcom. Please note that an audio replay of this call will be made available 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, Dave Heinbach Executive Vice President Chief Operating Officer, Jim bulk senior Vice President Finance and CFO. After our prepared remarks, we will conduct a question answer session. That's always let me refer you to slide to the presentation, which contains our safe Harbor disclaimer reminds you that this conference call may include forward looking.
Statements subject to certain risks uncertainties.
These may cause actual results to differ materially from the statements have provided detailed discussion various risk factors in resi filings, which you're encouraged to review you are cautioned not to place undue reliance reliance on these forward looking statements except as required by law, we undertake no obligation to publicly update or revise any forward looking stay.
With that I'll turn the call over Chris No go ahead, Chris.
Thanks, John we appreciate everyone joining us this morning, I hope everyone is healthy insane.
I'll start by highlighting a few the outstanding operating results, we achieved during the second quarter before discussing our progress managing through significant change created by October 19, and the closing of the sprint T mobile merger.
As reflected on slide four or broadband business had a record quarter of data net additions of 6000.
To put this in perspective, we had more data net adds in the second quarter than we did and all of 2016 in 2017.
And our 2020 year to date net adds of 9000 exceed both 2018 in 2019 full year results.
As Dave will discuss in more detail later on the call. The strong second quarter results were driven by having the most robust broadband network in our markets and a combination of our rate card value proposition coping 19 stay at home directives, New service offerings complementary upgrades and service.
We initiated after the started coven 19, and glow fiber gaining traction.
Moving to slide five you see the growing cash flow generation of our businesses.
Normalized free cash flow for the first six months of 2020 grew about 63% to 82 million from the same period a year ago.
Wireless normalized free cash flow was 87 million for the first half of 2020.
We've been able to redeploy the strong cash flow from wireless and broadband business, particularly our new glow fiber and beam that works, providing new platforms for growth in the next several years.
I'm pleased with our continued focus on execution. Despite the many changes that have been driven Mike Koban 19, and the sprint merger with T mobile.
Slide six outlined some of the relevant points regarding both.
Starting with Cowen 19, we began to see a phased reopening of the economies in our markets.
Certain cases governments of Paul or store slowed these efforts as a pandemic reverse course with infections rising again.
All of our markets continue to operate under government stay at home and work from home recommendations for mandates.
These developments have created a strong residential broadband demand softened demand for wireless postpaid, which relies more on retail distribution.
We incurred approximately 4 million in kobin related charges and revenue credits in our wireless segment in the second quarter, Dave will expand on later in the call.
I appreciate the efforts of all of our employees, especially those on the front lines interface in directly with our customers.
Turning to spreads merger with T mobile.
As we've discussed undisclosed and past, earning calls our affiliate agreement outlines a sequence of options available to T mobile and us.
The negotiation period ended on June Thirtyth without an agreement on a new affiliate arrangement.
We're now in the second window of time gifts T mobile an option to purchase or Pcis business.
As of today T mobile has not exercised their option, but has until August 31st to decide to do so.
Our sprint affiliate agreement required T mobile to comply with certain restrictive operating requirements during the 90 day period.
Following their network technology brand and combination conversion notice that we received on April 1st.
This period also ended on June Thirtyth.
Subsequently on July 22nd T Mobile announced its plans to begin integration of the brands rate plans sales and networks on August 2nd.
The impact to sprint customers and our affiliate area is uncertain at this point in time.
We're trying to learn more about T mobile's integration plans and access the impact to our business.
These integration plans are in addition to the adoption of the T mobile credit and collection policies that occurred in the second quarter.
As previously disclosed for the past year, we've had a dispute sprint regarding the resetting of the travel fee.
After inability to negotiate a reasonable outcome, we invoked her binding arbitration rights. The arbitrators ruled in June to reset the travel fee continuing the 18 million per year for the period 2019 to 2021.
We're pleased with the outcome and to have this issue behind us.
Jim will provide more details on the dispute in merger related operating and financial impact on our second quarter results.
Lastly, T mobile sold to boost prepaid business dish networks on July 1st.
We continue to operate the boost business under the same economic terms as we had with sprint.
We've begun to collaborate with dish on their marketing plans for this project going forward.
Before turning the call over to Jim I'd like to remind everyone of the timeline and options as shown on slide seven regarding the sprint T mobile merger.
I said earlier, we were in the 60 day period that gives T mobile the right to exercise an option to purchase the assets for Pcis operations for 90% of the entire business value through an appraisal process as outlined in our affiliate agreement.
T mobile does not exercises 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 or purchase option T. Mobile must then so decommission legacy networking customers dinner service area.
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.
Before reviewing our financial results for the second quarter. Let me first comment that we had an unusual number non routine and nonrecurring charges and credits in our financial results do because it related actions at sprint T mobile order developments.
Slide nine highly sprint T mobile merger with elements and their operating and financial impacts on the second quarter results.
As Chris mentioned earlier, we resolve this spring travel to skew the binding arbitration during June to travel the has reset the 18 million per year for the period 2019 2021.
As a result, we recognized 21 billion to travel revenues during the second quarter 2020.
For services that we have provided since May 2000.
If you recall, we recognize 6 million to travel revenue in 2019 prior to sprint ceasing payments.
Sprint paid the 21 million in July.
Going forward, we will recognize to collect 1.5 million for bought through the end of the three year period.
Now turning to the integration activities during the second quarter.
Spread adoptive T mobile credit collection policies that shorten the time frame by 40 days caught he has to announce and disconnect the customer service.
As a result, approximately 4400 postpaid involuntary disconnects were accelerated into the second quarter subscriber results.
Excluding this policy change postpaid churn for the second quarter, what it did about 20 basis points lower for 1.37%.
There was no impact, albeit that during the quarter.
Last week, we implemented in employee retention bonus plan after the sprint T mobile merger announcement in 2018 that was condition on the closing of the merger and certain other conditions.
Closing of the merger now makes here I mean, it's probable and.
And we accrued 1.2 billion in expense in the second quarter 2020, and expect won't Kirk another 1.2 million due to the ended the expected vesting period in the fourth quarter 2021.
Please now refer to slide tend to discuss our financial results for the second quarter.
Consolidated revenues were 169.5 million in the second quarter 2020, as compared to 158.9 million in the second quarter 2020.
20 Ninee.
Adjusted EBITDA for the quarter was 80.9 million compared to 67 million at the same period last year.
The increase in both revenue and adjusted EBITDA was primarily due to the resolution of the sprint travel dispute in the wireless segment.
Turning to slide 11.
Consolidated operating income was 43 million for the second quarter compared to 24 billion in the second quarter 2019.
Earnings per share for the quarter was 68 cents per diluted share compared to 26 cents per diluted share in the prior year period.
The resolution to the sprint travel dispute and lower depreciation in the wireless segment for the primary drivers of the year over year for us.
Turning now to our segment results on slide 12.
Our wireless operating revenues for the second quarter 2020 increased 8.6 million to 119.7 going into the same period a year ago.
The increase in revenue was due to 19.5 million increase in spring travel revenue as mentioned earlier.
1.5 million due to subscriber growth.
700 validated higher voting NVNO revenues.
Partially offset by declines up 6.9 million in equipment sales.
It's more customers Balkans Oman.
3.2 million due to higher advertised customer contract call that are netted against revenues 1.4 million in cobot related prepaid customer retention credits.
And 1.2 million cobot related postpaid pit that in connection with the keep Americans connected pledge.
Second quarter 2020, adjusted EBITDA for the wireless segment increased 29.2%.
67.7 million.
In addition to the revenue increase of 8.6 million equipment cost of goods sold declined 6.3 million.
Advertising expense declined 3.8 million.
Partially offset by 1.1 million in coated related payroll expenses.
<unk> thousand and legal fees related and travel dispute.
600000 higher operating taxes.
Due to a nonrecurring benefit recognized in the second quarter 2019.
500000 higher cell site was an expansion of our network.
400000 employee retention bonus accrual related to this from T mobile merger.
Moving to slide 13.
Revenue in what our broadband segment grew 1.6 million or 3.3% to 50.1 million in second quarter 2020.
Driven by an increase of 2.2 million in cable residential in SMB revenue.
Due primarily from a 16.6 increase in broadband or to use and lower bundling discounts and promotions.
Fiber enterprising wholesale revenue by $100000 due to an increase in enterprise backhaul sort of gets.
Oh, Wow Arlette revenues declined 1.2 million or 20% primarily from lower government subsidy DSL customers.
Broadband adjusted EBITDA for the second quarter declined 1.9 million.
20 billion from the same period a year ago.
The decline was due to 1 million dilution from the launch of the globe fiber.
And 2.5 billion at higher payroll falls from accommodation of supplemental Koby 19 compensation expense for customer interface employees, an increase in benefit plans and higher incentive accrual from strong broadband operating results.
On slide 14.
Our segment record revenues grew 41% to 4.3 million and adjusted EBITDA grew 46.1% to 2.7 longing for the second quarter 20, twond due to a 9.5% growth and tenants.
And 29.3% increase in the average lease grade due to amendments to the intercompany leases.
Moving to slide 15.
We ended the second quarter was 715 million in debt with an effective interest rate up 2.5%.
Net leverage ratios normalized funds from travel revenue was 2.2 types.
With 218.7 million in total liquidity.
Growing free cash flow and no short term material debt maturities. We are in excellent shape to continue to invest in organic and M&A opportunities.
And now I'll turn the call over to date.
Thanks, Jim and good morning, everyone on slide 17, we summarize them more detailed the impacts it koeppen 19 on our wireless segment as Chris pointed out earlier in the call after an abrupt closer to 40% of our sprint branded postpaid retail stores at the end of March we gradually reopen stores throughout the second quarter and I'm proud to report the substantially.
All locations are now open for business.
However, as a result of these store closures gross adds were down 28% from the prior year period, and the second quarter. Conversely, postpaid voluntary churn declined 23% or 28 basis points versus the prior year period on lower reporting activity industry wide.
As a sprint affiliate we participated the Fccs keep Americans connected pledge and suspended nonpaid disconnects relating to cope with 19.
Brent collections practices returned to business as usual July 1st However, we estimate the 10 basis points of involuntary churn favorability in the second quarter will likely reverse in the third quarter. As a result, we recognized a 1.2 million dollar contra revenue charge in postpaid for expected bad debts related to these deferred disconnects.
Additionally, we recognized $1.4 million and prepaid coded related revenue retention credits in the second quarter to keep boost customers connected.
Sprint discontinued this practice in June and subsequently divested the boot business. The dust networks on July Onest, and we look forward to working with dish and growing to boost business and our service area.
During the second quarter, we focused on keeping our employees safe while continuing to provide are essential communication services.
We incurred approximately $1 million and additional expense in the quarter for cold and related paid to idled employees and supplemental pay for frontline wireless.
Lastly, we reduced advertising spend by $2.8 million versus the prior year period due to the stay at home directed in our markets in the soft retail store traffic from the pandemic.
Turning to slide 18, the Kobin related impacts in our broadband segment were decidedly positive as our proactive programs to introduce new prepaid plans faster minimum speed tiers with higher data allowances and temporary relief to non pay accounts, we're all very well received by our customers.
As Chris noted at the start of the call. We added record gross and net broadband data or to use in the quarter driven impart by the launch of the new 25 make prepaid plan for $25 per month, which result in approximately 1000 new subs.
We also realized an impressive 83 basis points improvement churn year over year, driven by the ongoing operating improvements in our network operations and new rate card with approximately 25 basis point to this improvement related to the temporary suspension of non pay disconnects related to coated.
With more customers sheltering in place and seem renewed value in traditional video services, we realize their first net positive quarter in video or to use in over five years.
Lastly, we incurred approximately $400000 for idled employees and supplemental pay benefits for frontline workers and our broadband segment in the quarter.
As we turned back to wireless and slide 19, we show the key metrics of our postpaid wireless business. We added approximately 846400 postpaid subscribers at the end the first quarter, sorry second quarter as a result, the aforementioned retail store closures in the quarter and as previously noted postpaid gross additions for the second call.
For 2020 for materially impacted versus the prior year, while the mix of phone and connected device addition shifted to a 70 30 ratio as compared to approximately 70 525 phones to devices in the same period in the prior year.
Postpaid net losses totaled approximately 1300 in the quarter driven entirely by the steep decline in gross adds in the quarter related to coated.
However are combined postpaid churn was down year over year in the wake of the impact of coded to 1.55% as others in the industry have reported we too so our voluntary churn declined commensurate with the drop we saw on postpaid gross adds is overall porting activity declined in the quarter.
As Jim already highlighted as a result of a new collections policy enacted by T. Mobile in April sprint branded postpaid non pay disconnects were accelerated by approximately one month, resulting in the purge of approximately 4400 subs in the quarter.
Excluding the impact from the collection policy change our postpaid net adds in churn would've been approximately 3001, 0.37% respectively.
In addition, we estimate approximately 2300 disconnects were deferred in the quarter related to spread the commitment to the keeping their keep Americans connected pledge. We expect this will increase in voluntary churn in the third quarter by 10 basis points as these customers we entered the collections process.
Postpaid ARPU declined $1.68 year over year, driven primarily by sprint promotional discounting into a lesser extent the increase in the mix is connected devices in the base.
As a direct result of the pandemic net 40 results were relatively flat this quarter with the dot nine seven to one ratio.
Lastly, 5% to 5.7% of our postpaid base upgraded their phone in the quarter at 13.1% of the base was comprised of connected devices, such as watches and tablets at the end of second quarter.
Moving to slide 20, and our prepaid business.
We had a particularly strong second quarter inspite of the pandemic, we had approximately 289400 prepaid subscribers at the ended the second quarter with prepaid gross and net additions of just over 39000 10000, respectively.
In addition, prepaid churn was down an impressive 59 basis points versus the prior year period.
Second quarter ARPU decreased a $1.45 year over year as a result of Kobin retention credits issued to boost customers during the quarter.
Excluding these retention credits prepaid ARPU would have been relatively flat with prior year.
In summary, while we face tremendous kobin related headwinds in our postpaid wireless business. The continued strikes of our prepaid business and the second quarter resulted in the 11th consecutive quarter of combined postpaid and prepaid net wireless subscriber growth.
Now turning to slide 21, and our broadband segment total income and cable RG use grew an impressive 5.2% year over year in the second quarter, two approximately 176000 compared to approximately 167500 and the same period in the prior year.
As Chris highlighted at the start of the call.
We added roughly 6000 net broadband or to use in the quarter through <unk> organic growth, which is a tenfold increase to the prior year period. We're very pleased to report that aren't coming cable broadband penetration, increasing 38.5% and the second quarter last year to 44.1% this quarter on the strength of our new broadband speeds rate.
Hard surface improvements and increased demand related to covert.
Broadband segment data churn declined a remarkable 83 basis points to 1.32% in the second quarter, representing the 13th consecutive quarter of year over year churn improvement.
Average revenue per customer decreased slightly versus the prior year to $121.38 driven by temporary reductions to revenue as a result of coven 19 related actions.
Temporary increases and data allowances minimum speed increases to 50 Megabits per second at no charge. The introduction of limited time offer of the 25, Meg prepaid Internet planned previously mentioned and the reduction to late payment and reconnect fees all contributed to the year over year decrease.
Substantially all homes now passed in our cable markets are capable of broadband speeds of up to one gig per second with approximately two thirds of our residential base any upgraded areas having migrated to the new powerhouse branded regard.
This time last year.
Roughly half of residential subscribers run rate plans of 10 Megabits per second or less now 71% of subscribers are on plan to 25, megabits per second or higher with an average subscribed download speed of 72 Megabits per second well out of the reach of our DSL competitors.
As evidenced by our strong results and increasing penetration and reducing churn over the last several quarters. We are achieving our goal is constructing and even deeper competitive moat and they come and cable markets we serve.
Turning to slide 22, we continue to gain momentum with our new fiber to the home edge out strategy called glow fiber.
Glow had 1331 customers at the end of the second quarter.
The totaled 10.1% penetration rate comprised of 1900 54 total Archie you.
Some of our most mature neighborhoods in Harrisburg, Virginia, our first market launched we're already seeing penetration rates approaching 40%, which exceeds our terminal penetration rate objective.
We are particularly proud of the relative lack of churn we're seeing in our most strategic product in the bundle high speed Internet with only <unk>, 0.67% churn in the quarter.
Approximately 34% of new glow fiber high speed Internet subs are electing to one gig tier with retails for $90 per month, including whole home Wi Fi, which is contributing to stronger than planned data ARPU.
Our streaming TV and voice services.
Continued to exceed expectations, with 31% and 16% attachment rates respectively.
Meanwhile, fiber construction efforts in our first four markets are progressing very well and also exceeded our expectations in the quarter in spite of concerns related to covert 19.
Approximately 7800, new residential and small business Passings were released the sales in the quarter with a total of 13173 glow fiber passing through the end of the second.
We expect to have approximately 25000 total new passing through at least to sales by the end of the.
On slide 23, we have depicted our fiber and cable footprint, including the table to summarize our progress in each flow fiber market.
Total passings approved to build has increased by over 10000 within our seven initial markets as we continue to fine tune our construction modeling efforts.
As a result glow fibers total approve passings across all seven franchise approve markets now stands at 87517.
We continue to invest aggressively and market expansion efforts in our region.
And expect this number to continue to grow as we progress in our franchise in negotiations and other neighboring communities.
We also continue to make great progress toward our goal of launching the new fixed wireless broadband offering in the second half 2020 targeting roughly 300000 rural households across portions of Virginia, West, Virginia, and southeastern Ohio.
Leveraging the two to five gigahertz licensed spectrum, we acquired in 2019.
We now have active beta customers on the new fixed wireless network.
And have validated speeds of up to 100 Megabits per second download far exceeding offers by DSL satellite with competitors and these on cable to areas of our spectrum footprint.
We'll continue to update you on status at 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 24.
We added two new small cells in the second quarter 2020, bringing total towers and small cells to 228 with total tenants, increasing 9.5% year over year to 413.
We had a backlog of 112 open orders related to upgrades of existing tenants, where the addition of new tenants at the end of June 2020.
Finally, slide 25 provides an update to our 2020 capital spending results.
Capital expenditures were $66.6 million second quarter, 2020, compared to $79.1 million at the end of the second quarter in 2019.
The 12 and a half million dollar decrease in capital expenditures was primarily due to a $30 million decline in wireless spending.
The intelligent Parkersburg network expansions were completed in the first half 2019 and planned Retuned sliver territory expansion projects have been deferred as we await further clarity on or features an affiliate of the new T mobile.
We are confirming our updated guidance on capital spending from the first quarter of between 125 and $148 million with substantially all of the reduction to prior guidance reflected in our wireless.
However, as we noted last quarter with our strong liquidity and cash flow generation, we continue to invest aggressively in our broadband in fiber networks. Despite the pandemic induced economic uncertainty in our current operating environment.
Thank you very much and operator, we're now ready to take questions.
Thank you.
And as a reminder to ask a question ladies and gentlemen, you did you wouldn't need to press star one of your telephone.
Withdraw your question. Please press the pound key.
Please standby will be compiled kuni roster.
And our first question comes from the line of Ric Prentiss with Raymond James Your line is now open.
Thanks, Good morning, guys.
Hey, Rick.
Hey, I hope you and your family employees continue to say save a well during the cold and 19.
Hey, Brian.
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Likewise, let a.
A lot of moving pieces here, obviously are busy earnings day or impact maybe in a couple areas.
First.
And all the coded 19, Carl call outs as far as different line items.
Did you guys adjust EBITDA to remove the cobot 19 impacts or does fuzzy, but they're really affect the full blown up code at 19.
Yes, Rick we did not remove them so we thought it.
We've got does include the pulling back.
And is it possible.
To kind of summarize.
At by wireless and broadband.
What kind of the total magnitude of puts and takes on cobot 19 impact on EBITDA was because some companies are calling out here is how much we spent on.
Here's how much cobot 19 impacted us within the quarter and then also maybe as we think going forward the third quarter fourth quarter, where you think those.
Those different cost levels might be.
Yeah Rick.
On the wireless side. It was just about $4 million of Ah between incremental expenses and retention credits and bad debt expenses into like.
Hey into second quarter numbers.
On the brought the insight obviously that number was closer to a million.
And it's apart from what it yeah.
Yeah, it's hard for future impacts.
I think.
Bad debt expense really I think we've taken the accrual I don't expect it to get any worse and it should come down in future periods on that side.
A lot of the programs that we had for.
Implemental paper or our employees, where customer facing some of that is being phased out as we speak so that should be lower going forward as well.
Okay.
And then obviously the elephant in the room is still the relationship with T mobile.
Can you update us as far as how active the discussions are obviously August 2nd is not very far away as far as them.
Moving to the sprint brand and do you need to then increased advertising.
Until a decision is made.
Yes, Rick that the discussions continue to be active and and constructive so we're in routine and active dialogue with with our friends in Bellevue.
The increase in advertising you know in lieu of you know the integration plans were.
Fairly sure that in the short term yeah, we're not expecting any.
Major negative impacts we expect to have access to.
The new rate plans that Theyve announced we'll be able to sell those in our sprint branded stores and so forth and we're evaluating our longer term plans in terms of.
Potential advertising changes or other changes, we might need to make in lieu of their integration plan, but nothing to announce.
One final one just on that process when you consider the 90% of entire business value on the first option is chosen that.
They exercise their option to buy your wireless business.
How does the comps play into it is or is there a need to look at USM T mobile sprint purchase price how does how did kind of comps play into that discussion on devaluation of TBD.
Jim you want to take them.
Yeah, Rick we think as an affiliate we should be our that's precedent transactions are looking back at other affiliate transactions now I know a lot of than have not been recent but there was a.
Dozen or so as your as you are well aware and comprehensive just come back in 2005 FY 2010.
I mean sprint affiliates and Nextel affiliates that I think are a good copper out for our program U.S. seller. You mentioned is regional player there not tied to a national company either their expenses are going to be higher their growth is lower <unk> as a result Hopkins affiliated with the national National brand.
Great well good luck into best wishes you your family employees as we make it very these turbulent times.
Yes.
Thank you Rick.
Thank you again as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one when your telephone into withdraw your question. Please press the pound Keith.
Our next question comes from the line of how many of course on with Vws financial Your line is now.
Hi, good morning.
Could you.
Talk about the boost relationship did you need to do like aside deal with them and how does that.
Kind of spill over into the T mobile negotiations.
Yes, Hi, this is Dave I'll start and then ask Jim to to bolt on here, but in terms of how that how that works, our prepaid and postpaid business.
Contemplated in their entirety any affiliate agreement.
With now T mobile previously spread of course.
And we're in active dialogue with the folks addition actively supporting their their efforts to market sell the food brand and in our.
Our region. So they really havent, they haven't factored and we don't have any side deals or anything in that regard Jim any anything else you want to add to that.
Yes, no our economic relationship is the same as it was before the sale.
Okay and then.
Could you elaborate.
On the report ratio dropped from dual one thing that's the first time in a very long time.
Just on that.
It is it is the first time in a very long time and I.
I think it's entirely coven related.
You know can't candidly 14 activity was down across the board as you know and.
And we didn't see any.
Material change in the competitive landscape for environment in the quarter. It was just totally.
At normal quarter on on pretty much every level on the postpaid front and was most notably impacted.
Just by the production to a retail store traffic and retail store closures.
Okay. My last question was.
No.
The new to programs are being in place the affords us the promotions. So that those are lower rate cards than what you used to the are you required to advertise those.
And how's that going to impact our true if are you able to mitigate some of the him.
Downward pressure.
On the broadband side.
Bob and also the wireless I with T mobile promotions they've implemented.
Yes on on broadband the.
The the activities that we undertook as a result of the pandemic really all.
Expired with started the third third quarter here. So we gave a temporary relief to non pay subs, we the numerated the expected impact there, it's only about 700 subs potential.
And we we did offer new prepaid plan, it's a thousand subs.
At 25 Bucks, a month, but that that rate card or rate plan will expire.
Here shortly as we revamp our overall prepaid.
Broadband rate card and <unk> and set of offerings and the.
They were handling the temporary speed increases is that those those are expiring as well and then we're inviting customers to retain that speed for a modest Upcharge war.
To go back to the rolled speed and the temporary relief. We offered in terms of data allowances, we were actually going to allow to customers to retain those.
And.
And as we've seen a significant uptick as you might expect on traffic and so we expect that to normalize.
Overtime. In addition to the new unlimited rate plan that we introduced in terms of our data tiers.
We feel as though on overage charges and the like will be net neutral on revenue from where we expected to be this year. So that's a long way around the barn to say that we're not expecting any long term impacts as a result of the actions we took or the discounting that we offered.
And to the contrary based on the strong subscriber growth. We've seen in addition to the normalizing some of these temporary activities. We think we'll see a pretty good uptick in the future on pricing in postpaid.
As you know where we elect to.
To leverage spreads and now T Mobile's national rate card and so we're we're.
I'm not entirely in charge of of how we moderate or mitigate any impacts from from any decisions. They decide to make in terms of discounts or adjustments and the like that's that's why we noted those in the quarter.
Yes, and one on that one thing to add on the wireless side or the the service play into T. Mobile is launching next week or more aggressive than what we've seen previously with sprint, but on the flip side. There. The handset offers actually have changed recently and here is less service discounts that we are.
Providing starting in July on that side. So I think the two things are going to offset each other as we go forward.
All right I appreciate that thank you.
Thank you.
Thank you.
As a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one of the telephone into withdraw your question. Please press the pound key.
Uh huh.
Hi.
I'm not showing any further questions at this time. So this does conclude today's question and answer session I would now let's turn the call back the jumbo for closing remarks.
I'd like to thank everyone again for joining our call. This morning, there's a lot going on we will keep you posted as things progress and I hope everybody states safe and healthy thanks, everyone.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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