Q1 2021 Shenandoah Telecommunications Co Earnings Call
Okay.
Good morning, everyone welcome to Shenandoah time till the.
The communications first quarter 2021 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Kirk Andrews director of financial planning and analytics for sure.
Good morning, and thank you for joining us the purpose of today's call is to review <unk> results for the first quarter of 2021 a.
The results were announced in the press release distributed last night and the presentation. We'll be reviewing is included on the Investor page at our website Www Dot Centel dotcom.
Please note that an audio replay of this call will be made available later today the.
Details are set forth in press release announcing this call.
With us on the call today are Chris French President and Chief Executive Officer, Dave Heimbach, Executive Vice President and Chief operating Officer, and Jim Volk, Senior Vice President of Finance and CFO.
After our prepared remarks, we will conduct the question answer session.
As always let me refer you to slide two of the presentation, which contains our safe Harbor disclaimer and remind you that this conference call may include forward looking statements subject to certain risks and uncertainties.
These may cause our actual results may differ materially from the statements. Therefore, we have provided a detailed discussion of various risk factors in our SEC filings, which you're encouraged to review.
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 and with that I'll now turn the call over to Chris go ahead, Chris.
Thanks, Kurt we appreciate everyone joining us this morning, and hope everyone staying healthy and safe.
I'm pleased to report that we started 2021 with a strong quarter of growth in both of our operational and financial results.
I'd like to start with the leading indicators for our for natural growth.
As reflected on slide four we added approximately 13000, new passing in the first quarter with total passing is now just under 260000.
Our diversified last mile of broadband networks grew an impressive 48000, passing so year over year.
Glo fiber branded fiber to the home business added 5800, new passing.
Excluding the launch of service in the Virginia markets of sale of them during the first quarter.
Roanoke in Lynchburg in April.
We also added approximately 5800 passengers with are being serviced during the quarter with service now available in five counties in Virginia.
Lastly, the completion of the acquisition of Canadian cable, one and December 31st.
Added over 1000 homes passed to our income and cable network.
Turning to slide five broadband data net additions increased by over 4200 for almost 62 per cent from the first quarter 2020.
With the tailwind from COVID-19 slowing our incumbent cable net additions of 2500 have returned to pre COVID-19 growth levels.
However, glo fiber and being now make up more than 40% of of the broadband data net additions keeping our organic penetration growth rates among the industry leaders.
We believe that we have of superior value proposition relative to our competitors in all markets. We serve as reflected by the outstanding broadband data churn results across all of our services.
Construction pace of our age out of network expansion and our hyper hyper local marketing and customer service are critical components for driving sustainable double digit revenue growth for Jim and Dave will provide more details on later in the call.
Moving to slide six I'd like to transition now to provide a brief update on the pending sale of of wireless assets and operations the.
The Hart Scott Rodino waiting period expired on April 26, without the the department of Justice, taking action, thus, allowing the transaction to be consummated pending regulatory approvals from the Federal Communications Commission and the public Service Commission of West, Virginia, which we expect to secure in the next 60 to 90 days.
The asset purchase agreement with T. Mobile is expected to be executed during the same timeframe and we expect to close on the sale in early third quarter.
Related to the pending wireless sale on April 5th we announced an organizational restructuring plan that will reduce our workforce by approximately 340 employees or 30% of our total base about.
About 90% of of the reductions are employees, who support the wireless operations and who will not automatically transfer to the T mobile as part of the transaction.
We are coordinating the T mobile to assist in transitioning to them as many of the affected employees as possible following the closing of the sale.
We're also proactively providing career transition services and severance pay and benefits to those non hard by T mobile to assist with the disruption of uncertainty for the affected employees and their families.
The first wave of employees will exit of May cause we have recognized restructuring costs in the first quarter results for continuing and discontinued operations of approximately 600000 of 200000, respectively.
Most of the employees impacted by the work force reduction will exit following the closing of the sale and then the required transition services, we expect to realize annualized run rate operating expense savings for continuing operations of approximately $4 million.
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 to discuss our financial results for the first quarter.
Broadband revenue grew 10, 8% to $55 2 million driven by an increase of $5 9 million or 16% and residential and SMB revenue.
Primarily from of 24, 1% increase in broadband data RG use and an increase in video <unk> of $6 28.
Our luck and other revenue declined $700000 or 15, 2% to $3 7 million, primarily from fewer DSL subscribers and lower government support and intercompany from service.
Broadband adjusted EBITDA for the first quarter grew one 7 million or eight 3% to $22 4 million from the same period a year ago.
The revenue increase of $5 4 million was partially offset by $2 1 million increase in compensation expense 900000, and higher software and professional fees and 500000 and higher programming and retransmission fees.
The compensation expense increase was due primarily from increased staffing to support the growth of low fiber.
And lower capitalized labor.
We passed along the increases in per branding and retrans fees to our customers for January.
On slide nine our segment revenue grew 25, 1% to $4 7 million and adjusted EBITDA grew 45% the $3 2 million for the first quarter 2021 day.
286% growth in tenants and 14, 7% increase of the average lease rate due to amendments to the intercompany leases.
Moving to slide 10.
Holiday the revenues grew 12, 3% of $59 7 million in the first quarter 2021.
Consolidated adjusted EBITDA for the quarter grew 19, 1%.
$17 one.
The increases were primarily due to strong broadband of tower revenue growth.
Turning now to the full year 2021 outlook on slide of love It.
We are reaffirming our 2000 of 'twenty one outlook, we expect consolidated revenues to be $241 million to $248 million.
And adjusted OIBDA range between 69 and $76 million.
Please note we expect the corporate expense savings from the restructuring debt, Chris discussed earlier to be back weighted to the second half of the year.
Moving to slide 12.
We ended the first quarter with 689 billion in debt with an effective interest rate of two 2%.
And $304 million of total liquidity.
Cash and cash equivalents grew sequentially by $33 8 billion to 229 million due to strong free cash flow of $74 million from our wireless segment.
That would report as discontinued operations.
Continuing operations had $30 million of negative free cash flow in the first quarter, driven primarily by 25 million of Capex and negative adjusted EBITDA for Glo fiber.
And $13 million and working capital changes.
With the pending wireless sales now expected to close in early third quarter, we are providing guidance for 2021 cash sources and uses on slide 13.
Most of the cash flows had the previously disclosed but there was one cash flow component of that I'd like to highlight.
We expect the $110 million to $120 million of free cash flow from discontinued operations as the source of cash.
This is in addition to the previously disclosed wireless sales proceeds.
This assumes we continue to own the wireless business through the second quarter and incur about $27 million of transaction and restructuring expenses at for Ram closing.
This favorable change along with minor updates the prior estimate estimates will likely result in cash at year end ranging from $62 two of $100 million before the annual dividend the world changes in working capital and any draws on our new credit facility.
We have been working with our lenders and establishing new credit facility to replace the current facility that will be paid or terminated at the closing of the wireless sales.
We anticipate of $400 million facility, consisting of 300 million and delayed draw term loans, and 100 million and revolving and of revolving line of credit.
We expect the new facility to close on the same day as the wireless sale.
But do not expect to draw of the new facility until late 2021 early 2022.
And now I'll turn the call over to Dave.
Thanks, Jim and good morning, everyone.
I'll begin on slide 15, where we've outlined our three primary product offerings to serve a variety of market dynamics.
In summary, I shouldn't tell income of cable networks service, both small towns and rural areas with broadband data speeds of up the one gig per second home phone and cable TV service across roughly 210000 homes and businesses of Virginia, West, Virginia and Maryland.
Our glo fiber service targets higher density urban markets, and our new beam Internet fixed wireless service targets, the lower density rural areas, where it isn't cost effective the bulk cable or fiber.
As Chris said at the beginning of the call. We now reach approximately 260000 homes and businesses passed which is an increase of nearly 48000 from the first quarter last year.
The common denominator in all of our offerings is to provide the leading high speed Internet service available in each market, we serve combined with superior local customer service.
With projected low and being terminal penetration rates in the low to mid 30% range and income and cable penetration in the mid 50 per cent range, we expect our broadband business to have industry, leading sustainable growth as we build out of our network over the next several years.
Now turning to slide 16, we've depicted our rapidly evolving and expanding fiber cable and fixed wireless broadband footprint.
The snap helps illustrate the integrated nature of our broadband networks and how operating leverage leverage will increase over time, given the overlap and the adjacency of our operations and our growing footprint.
Combined our multi pronged broadband growth strategy will more than triple homes passed of over 730000 in the next five years.
Well update you today on the status of our Glo fiber and beam Internet expansion progress for the first quarter and each quarter as we continue to progress in our market development and construction efforts across our region.
Now lets focus on our operating results from the first quarter.
Starting on slide 17, with our income and cable business total.
Total RG use grew an impressive eight 1% year over year in the first quarter to approximately 184700.
Compared to roughly 170900 in the same period in the prior year.
We added roughly 3000 net broadband data RG use in the quarter and ended the quarter with over 101500 broadband data RG use.
Which is an exception of 17, 8% increase to the prior year period.
We're also very pleased to report that our income and cable broadband data penetration increased from 41, 7% in the first quarter of last year.
To 48, 3% this quarter on the continued strength of our new broadband data speeds the rate card and service improvements and in spite of waning pandemic tail wins, this quarter, which drove record sales last year.
We're particularly proud of our ongoing improvements to customer lifetime value through reductions in our income and cable broadband data churn.
Churn in the first quarter continued to improve declining 19 basis points versus the prior year quarter two of record low of one dot two 9%.
Representing the 16th consecutive quarter of year over year churn improvement.
Broadband data average revenue per user in the quarter increased slightly versus the prior year period to $78.12.
As our new powerhouse branded rate card leveraging the improved value proposition based on our DOCSIS three one speed upgrades now comprises three fourths of the base.
Contributing to our healthy broadband data of <unk> and reductions to churn or changes that we made the data allowances. In addition to the introduction of an unlimited data plan in October 2018.
Before we launch the new rate card and increased allowances between 10, and 20% of our customers were receiving of surprise bill any given month with average monthly overage charges of roughly $35, but at the end of the first quarter 2021, only 2% of customers received overage charges and over 12000 broadband data subscribers.
Our incumbent cable network, we're on a $30 per month of unlimited plan, comprising 17% of the total broadband database.
In addition of 79% of broadband data subscribers are now on plans of 25 megabits per second or higher.
With an average subscribed download speed of 82 Megabits per second.
Which is well beyond the reach of our DSL competitors.
Now turning to slide 18, and our rapidly expanding glo fiber business <unk>.
<unk> had approximately 7700 total RG use at the end of the first quarter with a 16% aggregate broadband data penetration rate across all markets comprised of just over 5500, new glo fiber customer relationships.
The first quarter last year was our first full quarter of selling Glo fiber services. We're very proud to have added over 7000 net glo fiber are you using the last year and continue to be very bullish on our residential and small business fiber edge out investment thesis.
We continue to see extraordinarily low churn in our glo fiber broadband data product with only 86 basis points of churn in the quarter.
Broadband data <unk> was down year over year to $74.24 in the quarter as a result of the change in accounting for deferred revenue from the account level for the product level.
But importantly, not due to discounting in fact, we continue to see a higher percentage of new subscribers electing our higher priced $80 per month gigabit speeds here, which is our standard rate card offer.
We think this clearly demonstrates the value close subscribers see in an all fiber based broadband data service offered by our local company with superior local customer service.
In the first quarter 2021, 48% of new subs adopted that one gig speed tier comprising 43 per cent of the overall glo fiber customer base.
Our streaming TV and voice services continue to perform very well with 25% and 16% attachment rates in the quarter respectively.
At the end of the first quarter $2021 68 per cent of Glo fiber customers, where the where single play broadband data only.
<unk> 25 per cent of subsequent of double play and 7% were in the Triple play.
Slide 19 depicts the status of our active and approved glo fiber markets as of the end of the first quarter.
Our first glo fiber market in Harrisonburg, Virginia reached nearly 21% aggregate broadband data penetration in the quarter with some of our most mature neighborhoods in that community already in excess of 30 per cent broadband data penetration.
As Chris pointed out at the start of the call.
Construction efforts for Glo are progressing very well and exceeded our expectations again in the first quarter with roughly 5800, new residential and small business passing is constructed and released to sales.
This was particularly impressive given the ongoing pandemic headwinds.
And the tough weather conditions, we experienced during the winter months in our mid Atlantic region here of the country.
Glo fiber now has total passing <unk> of 34400, and the pace of our construction will be accelerating as we head into the summer months, we expect out of approximately 74000 total glo fiber passing us by the end of the year.
We launched the sale of in Virginia market in January in Roanoke Lynchburg. This this month and we're very excited to be able to bring more choice to consumers across the state of Virginia with ultrafast symmetrical low latency high speed Internet service.
In addition, we now have franchise approval in markets in Maryland, the Panhandle of West, Virginia, and Central Pennsylvania.
Total glow target passing to of increased across all franchise approved markets to over 170000.
We continue to make inroads with new municipalities and surrounding counties.
We're now past the halfway mark in our goal of constructing 300000 Glo fiber passing is over the next several years, where the healthy pipeline of new franchises across our region as we start the second quarter.
On slide 20, we've highlighted our early stage results in our emerging fixed wireless broadband data service called beam Internet.
In providing this new broadband service, we're leveraging our expertise in designing building and operating wireless networks over the last 25 years as the sprint affiliate.
Unlike fixed wireless offerings, you may read or hear about from the big three mobile operators beam Internet leverages professionally installed high gain outdoor amount of equipment on the customer's home, which ensures optimal network performance and capacity.
The foundation of the beam networks of the five G ready LTE based core the leverages secure of tier one European equipment vendors and licensed mid band spectrum in both the two five and three five gigahertz bands that we acquired over the last couple of years expressly for this purpose.
Beam has offered from commercial grade towers or small cells that are predominantly fiber fed ensuring high reliability and low latency.
Customers receive of robust indoor Wi Fi signal of leveraging the same euro of mesh Wi Fi technology that we use in our glo fiber markets and for all new customers in our income and cable networks too.
Lastly, bean customers will get the same great customer service that all sense of customers have come to expect from our local call center agents and technicians.
Beam subscribers totaled nearly 500 at the end of the quarter with an impressive broadband data ARPA of $73 in 2014.
We believe that folks would pay a premium for quality reliable unlimited high speed Internet connection in areas, where cable and fiber have not and likely will not be constructed given the low density nature of these areas in our footprint, but.
But we've been pleasantly surprised to see the nearly two thirds of customers have adopted our $80 per month 50, megabit per second speed tier, which has exceeded our expectations and a strong validation of our rural broadband investment thesis.
Penetration in this early stage investment reached $3 one per cent in the quarter and churn came in just under 1%, which is very encouraging to see given the fixed wireless delivery model has the number of nuances to it as compared to wireline base technology like cable and fiber.
We're now servicing just over 15000 target households, and plan to construct nearly 70, new beam sites in 2021, which we expect to increase target households passed to approximately 45000 by the end of the year.
Turning to slide 21.
Total tower tenants increased eight 6% year over year to 443.
This includes 236 intercompany tenants primarily for our wireless operations.
We had a backlog of 140 for open orders related to upgrades of existing tenants or the addition of new tenants at the end of the first quarter.
Finally, slide 22 provides an update to our year to date capital spending results and guidance for our continuing operations for 2021.
We're no longer providing wireless guidance is the result of the pending sale and discontinued operations presentation.
Capital expenditures for $39 million through the first quarter compared to $23 million in the first quarter of 2020.
The obvious driver of the year over year increase relates to the accelerating investments in our glo fiber and beam internet fixed wireless broadband initiatives.
For 2021, our guidance for the full year is $157 million to $168 million as we continue to invest aggressively in the expansion of our fiber cable and fixed wireless broadband networks.
Of the $55 million to $60 million of capital spend in our legacy broadband operations roughly $24 million of success based in support of the continued growth in our commercial and wholesale fiber business and the increase in broadband data penetration, we expect to achieve in our income and cable markets.
The one hundreds of 105 million of Glo fiber and beam related capital spend in 2021, approximately 74 million is related to design and construction of new five of new fiber and fixed wireless target, passing and $13 million related to connecting new fiber and fixed wireless subscribers.
Thank you very much and operator, we're now ready for questions.
Thank you.
As a reminder to ask the question.
The press Star one on your telephone delay draw your question press the pound key.
The spend biolay compile the Q&A roster.
Our first question comes from the line of Rick Prentiss from Raymond James You May begin.
Can you guys hear me okay.
We can now.
Okay.
I won't say can you hear me now.
The wireless humor.
Down the road from you guys in D. C lots going on I'm wondering if you can talk a little bit about how you think.
You might be able to benefit or take.
Anticipating the E B b the emergency broadband benefit, but also how you see things shaking out on the infrastructure Bill obviously, the case not all of the way day, but how do you think it might affect you guys. Both of the ABB infrastructure Bill and whatever else you are seeing in D. C area.
Yeah. Thanks, Thanks, Rick Good morning early morning for you.
On the on the E B.
<unk> fried that's tough to say isn't it.
We we applied on an expedited basis and are approved to provide that in our in our footprint in.
You know, it's hard to say, Rick, but we think we're going to see maybe roughly 4000 gross activation lift this year from participating in that program assuming that it stays funded.
And through the fall.
And so it's it's it's you know of.
The nice program that we look forward of participating and we're ready we've.
Just obviously received word yesterday that I think may 12th the is the start of the program. So so we're looking forward to the jumping in there.
As it relates to the infrastructure Bill.
We probably don't have enough time on this call it to kick around all of the you know the.
The twists and turns that that may end up taking as it makes its way through Congress, but.
And as just as a general statement.
We see more opportunity than the threat associated with increased spending in the sector and so we think we're uniquely positioned to take advantage of that.
A given our relationships in D C. Given our near adjacency here and in that regard and be just just given the nature of of the relationships that we have in surrounding municipalities and counties and with the co ops and so on and so forth. So we think kind of across the spectrum, where we're pretty uniquely positioned.
Particularly given our financial strength and our strong legacy in the region.
Okay and as you think of one of the questions. We get a lot is a lot of for us about low Earth orbit satellites leos as they're called and people wondering.
Spacex Starlink come in and disrupt rural markets like what you guys operate them and can you share of its a little bit of what you see in the selling of competitive landscape and maybe a little bit more thought about what kind of population density areas, you're serving versus where you see satellite having the success.
Yeah.
In terms of the things that keeps us awake at night here and I don't think Leos is is one of them I know that that's grabbing a lot of headlines.
Especially more recently.
But you know our our beam Internet fixed wireless service, we think.
Is is really the only product that we're offering where where you know the.
The the densities would be.
Consistent with those that you would expect the satellite based offerings the target.
But we think that you know with it with the L.
LTE standards based <unk> ready network that the today is capable of delivering 100, Meg but down the road is likely going to be capable of delivering 300, Meg in the not too distant future with low latency in fiber based backhaul that's terrestrial based.
We still think we're going to have a superior product offering there the.
Of the thing is we're just a little bit dubious about the yeah.
The the economic model of the underlying business model and the cost of customer equipment and I think we both know that.
There's a lot of maturing that needs to take place for for that business to achieve any kind of scale, where we're at has anything close to the subscriber level economics like for like we see.
Okay and last one for me you guys day to do.
On the acquisition of the cable space.
A few months back.
What is the appetite out there any thoughts of the capital gains tax on the agenda in Washington at the right.
Shake out some people interested in selling.
Yeah on the M&A front, Rick we continue to be an opportunistic acquirer and we have been and continue to be in dialogue with.
The number of operators and in and around our footprint. We have competed in a couple of auctions.
Unsuccessfully.
You know the market is very frothy and we'd like to be disciplined in terms of how we we think about M&A as one of the tools in our tool kit. So.
I would characterize us as of as an opportunistic acquirer of assets with all of the consolidation debt that has occurred and continues to occur in the industry.
It's probably why were more predominantly focused on the organic growth strategy. Because we think the returns are exceptional and candidly. We you know we think generally based on where we've seen transactions over the last couple of years it seem to be on the accelerating as regard.
We think we can create our own luck.
At the at much lower cost.
The much higher level of accretion to our shareholders by by building on our own then than buying somebody elses problems.
Right makes sense and good luck closing the deal with T. Mobile I think last one for me then usually of T mobile as the closed transactions on the first day of the month of first or second month of the quarter. So should we think maybe hopefully July one is higher probability of an August one or how do you kind of handicapping it.
Jim you want to field that one.
Yes, Rick that that is accurate.
T mobile has expressed the same to us and we're we're comfortable with that so I would say we need to get I think the long pole in the 10 is the FCC approval here, but I think it's likely that that will occur.
And the next 60 to 90 days.
And if it gets done before the end of June we cleaned the closed July one I would say the average eight would likely be August one.
Okay. It makes sense and you Gotta Love, Charlie, Oregon, calling T mobile the Grinch. So I know you guys had a quite a process to get that one over the finish line. So congrats on being almost there.
Thanks Richard.
Yeah.
And once again that start of one quick question Star one.
Our next question will come from the line of Matt of course, <unk> from <unk> financial.
You may begin.
Good morning. So the first question I had was are you seeing any changes in the.
Your subscriber habits of now that the of COVID-19 restrictions are loosening.
Hey, good morning, how net.
You know not not really not yet and the data that we look at we are we continue to see.
Steady increase in consumption.
I think you know last month, we clocked in at the average of over now.
400 gigs per per sub consumed.
On our on our networks and it's even a little bit higher metric on the glo fiber networks than that.
And.
What we're going to obviously pay close attention to that as things continue to open up here, but but now I can't say that we've seen of any material change in behavior.
Yeah.
One thing to that the.
The one thing we haven't seen changes as customers switching or switching off of the higher bandwidth plans that day.
The adopted during COVID-19.
As you can see in our in our record low income being cable churn of.
One point below one 3%. So we think that that's here to stay.
Okay.
And then as you're expanding all of fiber and beam.
What are you learning along the way that you're.
Incorporating into the new markets and the homes that you're passing either from a marketing standpoint, or just the customer outreach.
Yeah. The there they're two different there are two different animals, but what we're seeing is that there's a there's a convergence of occurring.
Now as we as we engage at the at the county level.
We're primarily focused with or are being fixed wireless offering so.
As we as we move through this cycle and we think about you know the three prongs of our resi and SMB broadband strategy right. We have our hybrid fiber coax incumbent cable networks that we continue to extend and and do line extensions on.
And we've got spectrum and I'm sure you've noted on the map, we've got spectrum basically surrounding all of those areas that we can do further edge out.
With fixed wireless to the extent are our franchise into areas that maybe the cable plant doesn't cover and I think the same is really true with with Glo fiber.
In the sense that in the urban and suburban areas for the densities of little higher.
And it makes good economic sense for where we're going to continue to stay focused on constructing fiber, but but edge out with with.
With fixed wireless and.
And so we're kind of pursuing the strategy at both ends and meeting in the middle of the if you will and what I mean by that is.
We're deploying beam right now and pretty low density rural areas, but what we're finding is the.
The those folks have a desire for fiber to right everybody had the desire for fiber so between an unsubsidized fiber build approach and maybe of subsidized fiber build approach kind of back to Rick's question. In addition to the globe or the the bean fixed wireless strategy, we really feel like we.
We've got all of the basis covered here so.
In terms of what we've learned and in any.
Given market I'd say that the experience has been pretty homogeneous across our different glo fiber markets. Thus far in terms of any kind of we haven't seen any kind of unique competitive response or or any kind of unique customer profile or anything in that regard I think generally speaking everybody is very very happy on the glo fiber side to have a choice.
Versus cable.
And you know they're there.
There are there's the there's a ton of demand.
We're happy to be able to bring consumers choice there and thus far as you know we haven't had to do any discounting to win customers. So we're not leading with price for leading with value.
And then on the Bean side folks are just thrilled to have any viable broadband connection whatsoever of a lot of folks moving from low speed DSL or from satellite.
And it's really the life changing if you look at some of the social media posts for for beam subs, its really heartwarming stuff because you know the folks finally can work or study from home when when previously they they haven't been able to do that effectively.
Okay and then my last question was given the increase in the free cash flow for the wireless business any intention to accelerate your capex net.
Homes past plan.
The the acceleration of of Capex is really more of the operational governor than it is.
Free cash flow of governor on it so.
We're pushing the team very hard.
And they're responding very very very well.
As I mentioned in my scripted comments were.
We're going to be accelerating the pace of construction as we move through the year here and you can expect that that'll that'll increase yet again as we move into next year.
But it does take a while to get this locomotive moving down the tracks and once it is then it's it's a it's going to take on of momentum out of the town, but we're still you know.
Uh huh.
Place and INR development here, where.
We wanna be reasonable with our expectations of what we can put on the team to go get done so last year roughly 25000 passengers constructed this year.
It'll be a little less than half of that but almost or sorry, a little less than twice that but but almost twice that in next year. We would expect to probably construct about 75000 or so so that's more of an operational constraint that of financial constraint and then on the beam side.
It's really the the constraint there is on the site acquisition from them. It takes a while to do the RF design and engineering work and then you know find or construct the towers or small cells.
And that that's really the governor there so Jim I don't know if theres anything you want to add to that but.
In summary, it is not a financial constraint, it's more operational in terms of how fast we can go.
Yeah, I agree and then on the <unk>.
Free cash flow was really a result of just owning the wireless business longer each month, we owned it.
Yes.
It's very profitable and it's generating a lot of cash so.
The small delays in the closing has generally been a part of net positive from us.
From a cash flow perspective.
Okay, great. Thank you.
Once again.
Again, Thats star one for questions one more for questions.
And I'm not showing any further questions in the queue.
Well I'd like to thank everyone for joining the call. This morning, and we look forward to updating you in July.
The continued progress here.
Chantelle with gloves and deep thanks, everyone and have a good day.
Yeah.
This concludes today's conference call. Thank you for participating you may now.
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