Q1 2024 Frontier Communications Parent Inc Earnings Call

Cole: Good morning. Thank you for attending today's Frontier Communications first quarter 2024 earnings call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. I'd now like to turn the conference over to our host, Spencer Kurn. Please go ahead.

Good morning. Thank you for attending today's frontier Communications' first quarter 2024 earnings call. My name is Colin and I'll be the moderator for todays call all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

If you'd like to queue for a question you can do so by pressing star one on your telephone keypad now.

Like to turn the conference over to our host Spencer Kurn. Please go ahead.

Yes.

Spencer Harris Kurn: Good morning, and welcome to Frontier Communications' first quarter 2024 earnings call. This is Spencer Kern, Frontier's Head of Investor Relations, and I'm joined on the call today by Nick Jeffery, our President and CEO, and Scott Beasley, our CFO. Today's presentation can be followed through the webcast available in the events and presentations section of our investor relations website. Before we start, please see our safe harbor disclaimer on slide two. This is a reminder that this conference call may include forward-looking statements that involve risks and uncertainties that may cause actual results to differ materially from those expressed today. During the call, we may also refer to certain non-GAAP financial measures, which are defined and reconciled in our earnings materials. With that, I'll turn the call over to Nick.

Spencer Harris Kurn: Good morning, and welcome to Frontier Communications' first quarter 2024 earnings call.

Spencer Harris Kurn: This is Spencer Kurn frontiers head of Investor Relations and I'm joined on the call today by Nick Jeffery, our president and CEO and Scott Beasley our CFO.

Spencer Harris Kurn: Today's presentation can be followed within the webcast available in the events and presentations section of our Investor Relations website.

Spencer Harris Kurn: Before we start please see our safe Harbor disclaimer on slide two.

Spencer Harris Kurn: This is a reminder, that this conference call may include forward looking statements that involve risks and uncertainties that may cause actual results to differ materially from those expressed today.

Spencer Harris Kurn: During the call. We may also refer to certain non-GAAP financial measures, which are defined and reconciled in our earnings materials with that I'll turn the call over to Nick.

Nicholas Simon Jeffery: Thanks Spencer. Good morning everybody.

Nicholas Simon Jeffery: Thanks, Brent good morning, everybody I'm here today with Scott and we're excited to share our Q1 results with you let's.

Nicholas Simon Jeffery: I'm here today with Scott, and we're excited to share our Q1 results with you. Let's start with the headline for the quarter. We had a strong start to the year and delivered positive revenue growth for the first time since 2015. This is a major inflection point for our company, and it's a far cry for us, having achieved EBITDA growth last year for the first time in more than a decade. Until now, Frontier has been a story about reinvention.

Nicholas Simon Jeffery: You talked with the headline of the quarter, we had a strong start to the year and delivered positive revenue growth for the first time since 2015.

Nicholas Simon Jeffery: This is a major inflection point for our company and its the fault followed for US having achieved EBITDA growth last year for the first time in more than a decade.

Nicholas Simon Jeffery: Until now from there have been a story about reinvention.

Nicholas Simon Jeffery: Today, while our reinvention accelerates, our story turns to one of growth. Through consistent execution over the last three years, we've delivered an operational turnaround and emerged as a leader in the fiber industry. Let's talk about how we've achieved this.

Nicholas Simon Jeffery: While our reinvention accelerates, our three times to one of growth.

Nicholas Simon Jeffery: Through consistent execution over the last three years, we've delivered an operational turnaround and emerged as the leader in the fiber industry.

Nicholas Simon Jeffery: Let's talk about how we've achieved it.

Nicholas Simon Jeffery: It all starts with our clear strategy to build fiber, sell fiber, improve service for all our customers, and increase operational efficiency. And at the center of our strategy sits our ambitious purpose, to build the digital infrastructure this country needs to thrive now and into the next century. This is the why behind the work that we do, and we call it Building Gigabit America.

Nicholas Simon Jeffery: It all starts with our strategy to build fiber cell buybacks improve service for all our customers and increase operational efficiency.

Nicholas Simon Jeffery: And at the center of our strategy fits our ambitious public.

Nicholas Simon Jeffery: The build the digital infrastructure in this country needs to thrive now and into the next century.

Nicholas Simon Jeffery: This is the why behind the work that we do and we call. It building Gigabit America.

Nicholas Simon Jeffery: Over the last few years, we've advanced our purpose and shown rigor and discipline in executing our strategy. First, we developed the capability to quickly and efficiently build fiber at scale. We've more than doubled our fiber footprint in just a few short years. Secondly, we've grown our fiber broadband customer base by nearly 60% since 2020. And today, we have a record 2.1 million customers connected to our blazing fast fiber. Thirdly, we've improved our customer service.

Nicholas Simon Jeffery: Over the last few years, we've advanced pop up and showing the rigor and discipline in executing our strategy.

Nicholas Simon Jeffery: Firstly, we've developed the capability to quickly and efficiently build fiber at scale, we've more than doubled our fiber footprint in just a few short years.

Nicholas Simon Jeffery: Secondly, we have grown our fiber broadband customer base by nearly 60% since 2020 and today, we have a record $2 1 million customers connected to our blazing fast fiber internet.

Nicholas Simon Jeffery: Thirdly, we've improved our customer service.

Nicholas Simon Jeffery: 75% of our customer interactions are now digital, driving greater customer satisfaction as reflected in our industry-leading MPS score. And lastly, we can move faster and with greater efficiency because we've created a simpler and more digital organization.

Nicholas Simon Jeffery: 75% of our customer interactions are now digital driving greater customer satisfaction as reflected in our industry, leading NPS schools.

Nicholas Simon Jeffery: And lastly, we can move faster and with greater efficiency, because we've created a simpler and more digital organization.

Nicholas Simon Jeffery: Three years of relentless execution has brought us to where we are today, the largest pure play fiber internet company in America. And on the next slide, you can see that fiber now represents the majority of our business. With 6.8 million fiber passes, simple math puts us at 68% of the way towards our initial goal of building to at least 10 million fiber passes.

Nicholas Simon Jeffery: Three years of relentless execution is both as to where we are today the largest pure play fiber Internet company in America.

Nicholas Simon Jeffery: On the next slide you can see that fiber now represents the majority of our business.

Nicholas Simon Jeffery: With $6 8 million fiber popping simple math puts us at 68% of the way towards our initial goal of building to at least $10 million type of policy.

Nicholas Simon Jeffery: Our Fibre Broadband customers now represent 70% of our total broadband customer base, and Fibre now accounts for more than 50% of our revenue and 60% of our adjusted EBITDA. We've said that as fiber becomes a greater share of our business, we become an even stronger company, and Q1 is the perfect illustration of this dynamic.

Nicholas Simon Jeffery: Our fiber broadband customers now representing 70% of our total broadband customer base on fiber now accounts for more than 50% of our revenue and 60% of our adjusted EBITDA.

Nicholas Simon Jeffery: We've said as fiber becomes a greater share of our business, we become an even stronger company and Q1 is the perfect illustration of this dynamic.

Nicholas Simon Jeffery: Let's turn to slide six to review the details. I shared at the start of the call that we achieved a positive inflection point in revenue growth this quarter. This is a result of our fast-growing fiber business continuing to accelerate. We grew our Fibre Broadband customers by 18% and ARPU by 6% this quarter. Combined, these two metrics helped us deliver total fiber revenue growth of 10%. As data consumption continues to rise, customers are increasingly turning to the best broadband product in the market, fiber. We're also seeing this need for speed translating into higher adoption of symmetrical gigabit-plus speeds, and our customers are increasingly purchasing value-added service add-ons such as whole-home Wi-Fi and premium tech.

Nicholas Simon Jeffery: Let's turn to slide six to review the details.

Nicholas Simon Jeffery: I shared at the top of the call that we achieved a positive inflection point in revenue growth this quarter.

Nicholas Simon Jeffery: This is a result of our fast growing fiber business continuing to accelerate.

Nicholas Simon Jeffery: We grew fiber broadband customers by 18% and op grew by 6% this quarter.

Nicholas Simon Jeffery: Combined these two metrics helped us deliver titles by the revenue growth of 10%.

As data consumption continues to rise customers are increasingly turning to the best broadband product in the market fiber.

Speaker Change: Bye bye.

Speaker Change: We're also seeing this need for speed translating into higher adoption symmetrical gigabit plus speeds.

Speaker Change: And our customers are increasingly purchasing value added service add ons, such as whole home Wi Fi and premium Tech support.

Nicholas Simon Jeffery: The numbers clearly show how our fiber business is lifting our overall revenue, and it's lifting our EBITDA too. We delivered 5.4% EBITDA growth this quarter as our revenue growth was supported by our continued focus on cost efficiency. This is, in fact, the third quarter in a row of accelerated EBITDA growth and our fastest quarter of EBITDA growth since 2016. Before I turn it over to Scott, let's recap our 2024 priorities on slide seven.

Speaker Change: The numbers clearly show, how our fiber business is lifting our overall revenue.

Speaker Change: And it's lifting our EBITDA to <unk>.

Speaker Change: We delivered five 4% EBITDA growth this quarter as our revenue growth was supported by our continued focus on cost efficiency.

Speaker Change: This is in fact, the third quarter in a row of accelerated EBITDA growth and how fast this quarter of EBITDA growth since 2016.

Speaker Change: Before I turn it over to Scott, let's recap our 2024 priorities on slide seven.

Nicholas Simon Jeffery: This year, we're focused on driving three simple out... maintaining strong operational momentum, delivering revenue growth, and accelerating our EBITDA growth. As our first quarter results show, we're off to a fast start, which puts us in a strong position to deliver accelerated growth for the full year. I'm excited to provide more detail on our longer-term financial goals and the path for driving increased shareholder value at our forthcoming Investor Update, the exact timing of which will depend on the strategic review process which we announced on a previous earnings call.

Speaker Change: This year, we are focused on driving three simple outcomes.

Speaker Change: Maintaining strong operational momentum.

Speaker Change: Delivering revenue growth and <unk>.

Speaker Change: Decelerating, our EBITDA growth.

Scott C. Beasley: As our first quarter results show, we're off to a fast start which puts us in a strong position to deliver accelerated growth for the full year.

Scott C. Beasley: I'm excited to provide more detail on our longer term financial goals on a path to driving increased shareholder value at our forthcoming investor update.

Scott C. Beasley: The exact timing of which will depend on the strategic review process, which we announced on our previous earnings call.

Nicholas Simon Jeffery: We're looking forward to this event, and I'll keep everybody posted on the timing. I'll wrap up by saying a huge thank you to our customers, employees, partners, and everyone who plays a role in building Gigabit America. And I want to say a special thanks to our IT team. A few weeks ago, we disclosed that we had a cyber incident that impacted some of our IT services. Our IT team was quickly able to contain the incident and worked tirelessly to get us back up and running, and I'm extremely grateful for all their hard work and dedication. And I'm proud of our whole team for rallying together to continue to serve our customers. So, thank you all. Scott, it's over to you.

Scott C. Beasley: We're looking forward to this event and I will keep everybody posted on timing.

Scott C. Beasley: I'll wrap up by saying a huge thank you to our customers employees partners and everyone.

Scott C. Beasley: The role in building Gigabit America.

Scott C. Beasley: I don't want to say a special thanks to our team.

Scott C. Beasley: Few weeks ago, we disclosed that we had a fiber.

Scott C. Beasley: That impacted some of our it systems.

Scott C. Beasley: Our it team was quickly able to contain the incident and worked tirelessly to get us back up and running and I am extremely grateful for all their hard work and dedication and I am proud of our whole team for rallying together to continue to serve our customers. Thank you old Scott over to you.

Scott C. Beasley: Thank you, Nick, and good morning, everyone. We started the year with a strong quarter of operational and financial results. We added 322,000 fiber passings in Q1, which puts us on track to achieve our goal of 1.3 million passings this year. We also added 88,000 fiber broadband customers in the quarter, resulting in customer growth of 18% year over year, while growing ARPU at the same time. Consumer Fiber Broadband Churn was also solid in the quarter, remaining low at 1.2%.

Scott C. Beasley: Thank you Nick and good morning, everyone. We started the year with a strong quarter of operational and financial results.

Scott C. Beasley: We added 322000 fiber passing in Q1, which puts us on track to achieve our goal of $1 3 million passing this year.

Scott C. Beasley: We also added 88000 fiber broadband customers in the quarter, resulting in customer growth of 18% year over year, while growing <unk> at the same time.

Consumer fiber broadband churn was also solid in the quarter remaining low at one 2%.

Scott C. Beasley: Finally, we continue to execute on our cost savings, and we have reached a cumulative $536 million of savings since we started the program in 2021. These strong operational results continue to drive our financial performance. Our financial highlights are on slide 10. Let's start with revenue.

Scott C. Beasley: Finally, we continue to execute on our cost savings initiatives and we have reached a cumulative $536 million of savings since we started the program in 2021.

Scott C. Beasley: These strong operational results continue to drive our financial performance, our financial highlights on slide 10.

Speaker Change: Let's start with revenue.

Scott C. Beasley: Our first quarter revenue was $1.46 billion, up 2% versus Q1 of last year, and we earned $1 million in net income. As Nick highlighted at the beginning of the call, growing revenue year over year was a major inflection point for us. Our $547 million of Adjusted EBITDA represents our third consecutive quarter of Adjusted EBITDA growth and our fastest pace of growth since 2016. We also generated $335 million of net cash from operations, bringing this total to $1.3 billion over the trailing 12 months.

Speaker Change: Our first quarter revenue was $1 46 billion up.

Speaker Change: Up 2% versus Q1 of last year, and we earned $1 million of net income.

Speaker Change: As Nick highlighted at the beginning of the call growing revenue year over year was a major inflection point for us.

Speaker Change: Our $547 million of adjusted EBITDA represents our third consecutive quarter of adjusted EBITDA growth and our fastest pace of growth since 2016.

Speaker Change: We also generated $335 million of net cash from operations, bringing this total to $1 $3 billion over the trailing 12 months.

Scott C. Beasley: Slide 11 shows the continued progress that we are making in growing our Fiverr customer base. We grew our total fiber broadband customers by 18% versus last year, and this number is up nearly 60% since the end of 2020.

Speaker Change: Slide 11 shows the continued progress that we're making in growing our fiber customer base.

Speaker Change: We grew our total fiber broadband customers by 18% versus last year.

Speaker Change: This number is up nearly 60% since the end of 2020.

Scott C. Beasley: We have driven this customer growth while also accelerating our Pooh growth, which, as Nick mentioned, grew by 6% year over year. Our ARPU growth was a result of three drivers, introducing faster speed tiers, price adjustments, and expanding our sales of value-added services. In Q1, over 60% of our new customers took speeds of 1 gigabit or faster, and nearly 50% of customers purchased at least one value-added service.

Speaker Change: We have driven this customer growth, while also accelerating <unk> growth, which as Nick mentioned grew by 6% year over year.

Speaker Change: Our <unk> growth was the result of three drivers.

Speaker Change: Producing faster speed tiers price adjustments and expanding our sales of value added services.

Speaker Change: In Q1 over 60% of our new customers took speeds of one gig or faster and nearly 50% of customers purchased at least one value added service.

Scott C. Beasley: We are now seeing strong execution translate into revenue growth. Our customer and ARPU growth drove a 24% increase in fiber broadband revenue this quarter, which more than offsets legacy products. The total revenue growth for consumer accelerated for the third quarter in a row to 3%. Business and wholesale were roughly flat, leading to overall revenue growth of 2%.

Speaker Change: We are now seeing strong execution translate into revenue growth.

Speaker Change: Our customer and <unk> growth drove a 24% increase in fiber broadband revenue this quarter, which more than offset legacy product declines.

Speaker Change: Total revenue growth for consumer accelerated for the third quarter in a row to 3%.

Speaker Change: Business and wholesale was roughly flat leading to overall revenue growth of 2%.

Scott C. Beasley: We expect the trends of accelerating consumer revenue growth and roughly stable business and wholesale revenue to continue for the rest of the year. Moving to slide 13, we achieved 5% adjusted EBITDA growth this quarter, driven by 12% growth from fiber products. We are also managing the decline of adjusted EBITDA from copper products, which declined 2% year over year. Let's turn next to slide 14.

We expect the trends are accelerating consumer revenue growth and roughly stable business and wholesale revenue to continue for the rest of the year.

Speaker Change: Moving to slide 13, we achieved 5% adjusted EBITDA growth this quarter, driven by 12% growth from fiber products.

Speaker Change: We are also managing the decline of adjusted EBITDA from copper products, which declined 2% year over year.

Speaker Change: Let's turn next to slide 14.

Scott C. Beasley: We had cash capital investment of $1.0 billion in the first quarter of 2025, down $125 million versus Q1 of last year. Cash capital investment was front-end loaded this year, as expected, largely due to the timing of working capital related to the bill. We expect to see capital investment decline for the remaining three quarters of the year.

Speaker Change: We had cash capital investment of 1.0 or $1 billion in the first quarter of 2024 down $125 million versus Q1 of last year.

Cash capital investment was front end loaded this year as expected largely due to the timing of working capital related to the build.

Speaker Change: We expect to see capital investment declined for the remaining three quarters of the year and we remain on track for our 2020 for capital investment to be lower than 2023.

Scott C. Beasley: And we remain on track for our 2024 capital investment to be lower than 2020. As we noted on our last call, we expect to spend less capital on the same number of passes as we consume pre-work and inventory that we built up in 2022 and 2023. Our capital investment mix is also shifting, with lower build spend but higher success-based customer acquisition spend as we increase gross assets. We continue to have high confidence that our fiber build will deliver IRRs in the mid to high, well above our cost of capital, and that once we are through the investment phase, our business should generate significant growing free cash flow.

Speaker Change: As we noted on our last call, we expect to spend less capital on the same number of passengers as we consume pre work in inventory that we built up in 2022 and 2023.

Speaker Change: Our capital investment mix is also shifting with lower build spend but higher success based customer acquisition spend as we increase gross adds.

Speaker Change: We continue to have high confidence that our fiber build we will deliver IRR in the mid to high teens, well above our cost of capital and that once we are through the investment phase our business should generate significant growing free cash flow.

Scott C. Beasley: Touching briefly on slide 15, at the end of the first quarter, we had $2.6 billion of liquidity. Our balance sheet remains healthy, with approximately 87% of our debt at fixed rates. We do not have any significant maturities until 2022. Finally, you can see on slide 16 that we are reiterating our 2024 guidance. Our adjusted EBITDA growth in Q1 gives us increased confidence that we can grow adjusted EBITDA in the mid-single-digit range for the year, which would be a significant milestone in our turnaround.

Speaker Change: Touching briefly on slide 15 at the end of the first quarter, we had $2 $6 billion of liquidity.

Speaker Change: Our balance sheet remains healthy with approximately 87% of our debt at fixed rates and we do not have any significant maturities until 2027.

Speaker Change: Finally, you can see on slide 16 that we are reiterating our 2024 guidance.

Speaker Change: Our adjusted EBITDA growth in Q1 gives us increased confidence that we can grow adjusted EBITDA in the mid single digit range for the year, which would be a significant milestone in our turnaround.

Scott C. Beasley: Before we open it up for questions, I want to say thank you to our Frontier team for delivering another great quarter and a strong start. The operator will now open the line for questions if you'd like to queue for a question.

Speaker Change: Before we open it up for questions I want to say, thank you to our frontier team for delivering another great quarter and a strong start to the year.

Operator, we'll now open the line for questions.

Operator: If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. If, for any reason, you'd like to remove your question, you can press star 2. Again, to join the question queue, please press star 1. We'll pause here briefly as questions are registered. Our first question is from Michael Rollins with Citi. Your line is now open.

Speaker Change: If you'd like to queue for a question you can do so by pressing star one on your telephone keypad if for any reason you'd like to remove your question you can press star two again.

Speaker Change: Again to join the question queue. Please press star one.

Speaker Change: So you briefly ask questions are registered.

Speaker Change: Our first question is from Michael Rollins with Citi. Your line is now open.

Nicholas Simon Jeffery: Thanks, and good morning. I'm curious if you could talk a little bit more about just maybe where you are with the strategic review, and do the current considerations infer that the analyst meeting could push beyond the end of 2Q and possibly be in 3Q?

Michael Ian Rollins: Thanks, and good morning.

Michael Ian Rollins: Curious if you could talk a little bit more about just maybe where you are with the strategic review and does the current considerations infer that the analyst team could push beyond ended Q2, and possibly be <unk> in timing.

Nicholas Simon Jeffery: Michael, it's Nick here. I mean, as we've said before, the board and executive team are always looking for ways to create additional shareholder value, and we're continuing to do just that. And the timing of the review is important because with our initial goal of building to at least 10 million fiber passes now firmly in sight, we believe it's a natural time in our evolution to look at the next phase of our growth.

Nicholas Simon Jeffery: Michael It's Nick here.

Nicholas Simon Jeffery: <unk>.

Nicholas Simon Jeffery: I mean, as we've said before the board and executive team are always looking for ways to create additional shareholder value and we're continuing to do just that.

Nicholas Simon Jeffery: And the timing of the review is important because with our initial goal of building to at least 10 million fiber path things now firmly in sight. We believe it's a natural time in our evolution to look at the next phase of our growth.

Nicholas Simon Jeffery: So, we continue to look at a number of options, including, as we said, continued optimization of our operations and financing strategy, strategic partnerships, joint ventures, divestitures, mergers, and other business combinations. And that work's going on right now very, very intensely, so the review is ongoing. And, of course, we'll come back and share more news with you as soon as we can. And whilst we did initially expect to host our investor update in Q2, we decided to wait just in case we can get more insight from the strategic review, which would be appropriate to share at that investor day.

Nicholas Simon Jeffery: We continue to look at a number of options, including as we said continued optimization of our operations and financing strategy.

Nicholas Simon Jeffery: <unk> partnerships joint ventures divestitures mergers and other business combinations.

Nicholas Simon Jeffery: It works going on right now very very intensively. So the review is ongoing and of course, we will come back and share more news with you as soon as we can and whilst we did initially expect to host our investor update in Q2, we decided to wait.

Nicholas Simon Jeffery: Just in case, we can get more insight from the strategic review, which would be appropriate to share at that Investor day. So we're really looking forward to the event.

Nicholas Simon Jeffery: So, we're really looking forward to the event. It's being planned actively right now, and we'll share more detail on our longer-term goals and plans when we get to that event. But we haven't got a date yet, but, of course, we'll keep you posted when we do.

Nicholas Simon Jeffery: It's being planned activity right now and we'll share more detail on our longer term goals and plans when we get to that event.

Nicholas Simon Jeffery: But.

Nicholas Simon Jeffery: We haven't got a date, yet but of course, we'll keep you posted when we do.

Nicholas Simon Jeffery: And just one on the business, base fiber penetration, if I read it correctly, I think that's 44.9%. Can you talk about what you're seeing in the competitive landscape? And does the progress in the base fiber markets lead you to conclude that there might even be more penetration than 45 percent over time in your markets? Thanks.

Nicholas Simon Jeffery: And just one on the business are based fiber penetration as I read it correctly I think that's a.

Nicholas Simon Jeffery: <unk> 40 for about 9% can you talk about what youre seeing in the competitive landscape and does the progress.

Nicholas Simon Jeffery: In the base fiber market.

Nicholas Simon Jeffery: Lead you to.

Nicholas Simon Jeffery: To conclude that there might even be more penetration than 45% over time in your markets.

Nicholas Simon Jeffery: Yeah, Nick, here again. Well, we've always said at least 45%. And you're right to point out that in our base markets, which are our most mature fiber markets, where we have full competition and, of course, full FWA overlay in many, many cases, a really good test case for what we think is possible to drive up ARPU, as you see in our results. Now, of course, broadband remains a competitive market, and we fight hard every single day. But I think what we're seeing in those markets is great evidence of what will be possible across our whole footprint as we continue to build out. Operator, thanks a lot. Next question, please.

Nicholas Simon Jeffery: Yes, Nick here again, while we've always said.

Nicholas Simon Jeffery: At least 45%.

Nicholas Simon Jeffery: And youre right to point out that in.

Nicholas Simon Jeffery: Our base markets, which are our most mature.

Nicholas Simon Jeffery: Labor markets.

Nicholas Simon Jeffery: We have full competition.

And of course full.

FW: FW I overlay in many many cases, a really good test case for what we think is possible.

FW: And then those base markets, we've grown penetration from about 40% just over three years ago up to now our milestone of 45% in our mature markets and I think that really underscores.

Superior nature of our product good execution and the pricing strategy, we have of having really the best product that will ever be in this market at a very competitive.

FW: Unattractive price coupled with value creation mechanisms to drive up off of as you see in our results now of course broadband remains a competitive market.

FW: I know we fight hard every single day, but I think what we're seeing in those market is great evidence of what will be possible across our whole footprint as we continue to build out.

Speaker Change: Operator, Thanks, Bob next question please.

Operator: Our next question is from Shipra Pandey with Bank of America. Your line is now open.

Speaker Change: Our next question is from Chip Rowe Pandar with Bank of America. Your line is now open.

Nicholas Simon Jeffery: Great, thank you, and good morning. I have more of a big picture question. Having recently launched coverage of Frontier, one of the main talking points in my discussions so far is, you know, the debate of where the industry is headed in the future and what the industry structure may look like. There are two developments sort of happening within broadband. We're seeing sort of a convergence dynamic with wireless and cable players.

Speaker Change: Great. Thank you and good morning, I have more of a big picture question and having recently launched coverage of from tier one of the main talking points in my discussion thus far is.

Date of where the industry is headed towards in the future and what the industry structure may look like there are two developments sort of happening within broadband, we're seeing sort of a convergence dynamic with wireless and cable players and so there is a debate of whether convergence is a necessity to defend the business and retain market share and then also the development.

Nicholas Simon Jeffery: And so there's the debate of whether convergence is a necessity to defend the business and retain market share, and then also the development of third-party fiber overbuilders and their long-term game plan in the industry. I would just love to hear your views on the topic, what the long-term industry structure might look like and why, and where Frontier fits into that picture. Thank you.

Of third party fiber over builders and their long term game plan and the industry I would just love to hear your views on the topic, what the long term industry structure might look like and why and where frontier fits into that picture. Thank you.

Nicholas Simon Jeffery: Yeah, thank you. Of course, no one has a crystal ball on this. So, you know, I can't give you a precise answer, and no one knows what's really going to happen. But if we just break your question down into its component parts, I mean, firstly, convergence. The industry data very clearly shows that the US is a converging market, driven mainly by cable operators, but nonetheless, really converging at scale. Also, just from my work experience and the analysis we've done here at Frontier, we can't find a country anywhere in the world where once convergence starts, it either slows down or reverses.

Speaker Change: Yes. Thank you. Thank you.

I of course, no one has a crystal ball on this.

Speaker Change: Can't give you a precise answer and no one knows what's really going to happen, but if we just break your question down into its component parts.

Speaker Change: Firstly convergence the industry data very clearly shows that the U S is a converging market.

Speaker Change: Driven mainly by the cable operators, but nonetheless really converging at scale.

Also just in my work experience and data analysis, we've done here at frontier, we couldnt find a country anywhere in the world, where it wants convergent stop at either slow down or reverse it. So I think it's safe to say the U S is a conversion market and that will continue to accelerate.

Nicholas Simon Jeffery: So I think it's safe to say the U.S. is a convergent market and that will continue to accelerate. However, when I look at the implications for us... As I've said on several previous calls, the need for us to have a mobile bundle coupled with fiber will really be dictated by the data that we see, and there would be two data points we'd be looking at. First of all, does our rate of customer acquisition for fiber products slow down? Secondly, does our churn go up?

Speaker Change: When I look at the implications for us.

As I've said on several previous calls.

Speaker Change: For us to have a mobile bundle coupled with fiber will really be dictated by the data that we see I know it would be two data points, we'd be looking at first of all that our rate of customer acquisition for fiber product slowdown secondly, does that churn go up and as you guys can see evidenced in a really strong Q1 results today neither of those two things is true.

Nicholas Simon Jeffery: And as you can see from our really strong Q1 results today, neither of those two things is true, and that's perhaps because convergence is a great strategy, perhaps, for legacy operators who are defending positions. But we're an attacker in the market, and our goal is to grow. So at the moment, we don't see the need to add a mobile bundle to our fiber offer. The returns on capital from investing in fiber are amazing, and that's a really good use of our capital. But we'll watch the data very, very closely.

Speaker Change: And thats, perhaps because convergence is a great strategy, perhaps for a legacy operators who are defending our.

Speaker Change: Positions, but where we're an attacker in the market and our goal is to grow so at the moment, we don't see the need to add a mobile bundle to a fiber off the returns on capital from investing in fiber are amazing and that's a really good use of our capital, but we will watch the data very very closely and if we see.

Nicholas Simon Jeffery: And if we see customer behavior change, then we're prepared, should we need it, to work on introducing a mobile bundle. We have a lot of operational experience in our team in the cellular industry, so we really know how to do it. We've kind of laid the groundwork, but we don't really see it as something we need to do right now.

Speaker Change: The customer behavior change then we've got we've got we're prepared.

Speaker Change: Should we need it to work on introducing a mobile bundle, we have a lot of operational experience and our team in the cellular industry. So we really know how to do it we've kind of laid the groundwork, but we don't really see it as something we need to do right now.

Nicholas Simon Jeffery: I think on wider industry structures, things like open access networks and overbuilders. On overbuilders, we see remarkably little activity, actually, and I think that's a reflection of the colossal white space that still exists in the U.S. market for companies to go build fiber. So if you have capital and an intention to build fiber, you should really go somewhere where there isn't a great deal of competition, and that's a very big available space for those operators, and that's perhaps a little bit why we don't see a huge amount, in fact, very little, overbuilder activity in our market.

Speaker Change: I think on wider industry structures things like open access networks and overbuild is an overbuild as we see remarkably little activity actually and I think that's a reflection of the colossal white space that still exists in the U S market to go build fiber. So if you have capital and an intention to build fiber.

Speaker Change: You should really go to somewhere where there isn't a great deal of competition and that's a very big available space for those operators and that's perhaps a little bit why.

Speaker Change: We don't see a huge amount of buy back very little over builder activity in our market and it could be a reflection of the debt.

Nicholas Simon Jeffery: And it could be a reflection of the structure of the market and the fact that capital can be deployed effectively in areas where there is perhaps less competition, and why would you come and compete with Frontier if you didn't have to? The third point of your question, I think, was about open access networks, and it's true there are some open access networks being built, and, you know, there's a discussion around CapEx light models and so on.

Speaker Change: The structure of the market and the fact that capital can be deployed effectively in areas, where there's perhaps less competition and why would you come in and compete with frontier. If you didn't have to.

Speaker Change: The third point of your question I think was on open access networks and it's true there are awesome open access networks being built.

Speaker Change: And does the discussion around Capex light models and so on.

Nicholas Simon Jeffery: I would just say building fiber always requires capital, so the question is really whose capital is it and what return can you get from it? And so, if there are open access networks being built that we might be able to access that are adjacent to our existing footprints where we can get great marketing efficiency and drive the kind of commercial and operational performance we want, we might consider looking at those, always driven by the numbers and the returns we could get. It's not likely that we will open our own networks to open access because we don't need to.

Speaker Change: Just a building fiber always required capital. So the question is really who's capa to leave it and what return can you get from it and so if there are open access networks being built that we might be able to access that are adjacent to our existing footprints, where we can get great marketing efficiency and drive the kind of.

Speaker Change: Commercial and operational performance, we want we might consider looking at those always driven by the numbers and the returns we could get.

It's not likely that we will open our own networks to open access because we don't need to we're growing healthily growing off who our brand is resonating we've a great proposition and we don't need to add anyone else on our networks.

Operator: We're growing healthily. We're growing ARPU. Our brand is responding. We have a great proposition, and we don't need to add anyone else to our network. Thank you. Operator, next question.

Speaker Change: Thank you operator next question.

Operator: Our next question is from Sebastiano Petti with J.P. Morgan. Your line is now open.

Speaker Change: Our next question is from Sebastiani Petti with J P. Morgan.

Sebastiani Petti: Your line is now open.

Scott C. Beasley: Hi. Thank you for taking the question. I just wanted to circle back on just the revenue. I think you saw the growth there within the consolidated revenue. Is there any reason to think that that will not continue on a go-forward basis? Will we continue to see the aggregate business grow from here in subsequent quarters? I just wanted to make sure I understood the slide there and that you're prepared with Mark's name.

Sebastiani Petti: Hi, Thank you for taking the question.

Sebastiani Petti: Just wanted to circle back on just the revenue I think you saw the growth there within the within the consolidated revenue is there any reason to think that.

Sebastiani Petti: And that does not continue on a go forward basis should we continue to see the aggregates business grow from here in subsequent quarters, just wanted to make sure I understand the slide there in your prepared remarks, and then overall just going back to the broadband ecosystem.

Scott C. Beasley: And then overall, just going back to the broadband ecosystem, obviously, Frontier continues to grow aided by the accelerating fiber deployment, but you're seeing just a slowdown perhaps broadly across the ecosystem. Nick, in your experience in other industries, other markets, rather than broadband, anything you see that's kind of going on under the hood? Obviously, Frontier is positioned well to continue to kind of take gross ad share, but are you seeing mobile substitution or any of that kind of occurring within your base?

Sebastiani Petti: Obviously frontier.

Sebastiani Petti: Continues to grow it's aided by the accelerating fiber deployment, but you are seeing just a slowdown perhaps broadly across the ecosystem.

Sebastiani Petti: Nick given your experience.

Sebastiani Petti: In other industries and other other markets rather than broadband anything you see that's kind of going on under the Hood, obviously frontier position us well to continue to kind of take gross add share but are.

Nicholas Simon Jeffery: Are you seeing mobile substitution or any of that kind of occurring within your base and then lastly, any color you could perhaps provide us on the fiber.

Scott C. Beasley: And then lastly, any color you could perhaps provide us on the fiber incident, perhaps trying to weigh how much you are out of the market and what that could mean to gross additions within the quarter? Thank you.

Nicholas Simon Jeffery: And then perhaps trying to wait.

Nicholas Simon Jeffery: How much you are out of the market and what that could mean to gross additions within the quarter. Thank you.

Scott C. Beasley: Sure, Sebastiano, let's, let's parse that in three, and I'll take the first one and then hand it to Nick on your questions around broadband. So on revenue, we feel good about the start to the year. We've said Q2, we expect it to be up year over year. We expect it to be up sequentially, and the same trend should continue with consumer having strong acceleration and business and wholesale roughly flat. And then we have said for the full year, we expect to grow revenue, and that would be the major inflection point for full year revenue growth in 2024 versus 2023.

Sure Sebastiano, let's let's parse that and three and I'll take the first one and then.

Speaker Change: And Nick on the on your questions around broadband so on revenue.

Speaker Change: We feel good about the start to the year.

Speaker Change: Said Q2, we expect to be up year over year, we expect it to be up sequentially in the same trend should continue with consumer having strong acceleration in business and wholesale roughly flat and then we have said for the full year, we expect to grow revenue and that that would be the main.

Speaker Change: Your inflection point for full year revenue growth in 2024 versus 2023.

Scott C. Beasley: Let me take the final part of your question on Q2 net ads. So we've said we expect Q2 net ads to be up significantly year over year. There are some tailwinds, some headwinds. I'll give you some color there.

Speaker Change: Let me take the final part of your question on Q2 net adds.

Speaker Change: So we've said we expect Q2 net adds to be up significantly year over year there are some.

Scott C. Beasley: On the tailwind side, our sales channels are performing well, our offers are responding with customers, and we have the opportunity for some pent-up demand from segments with longer sales cycles like, Now on the headwind side, Q2 is typically the seasonally slowest quarter. ACP has an unknown impact, although we do have solid offers in place. And then, finally, we did have our systems issue in mid-April that you mentioned.

Speaker Change: Tailwind some headwinds I'll give you some color there on the tailwind side, our sales channels are performing well our offer is resonating with customers and we have the opportunity for some pent up demand from segments with longer sales cycles like MDU.

Speaker Change: Now on the headwind side.

Speaker Change: Q2 is typically the seasonally slowest quarter.

Speaker Change: <unk> has an unknown impact although we do have solid offers in place and then finally, we did have our systems issue in mid April that you mentioned underlying demand is still very healthy, but there might be some of those orders that get pushed into late Q2 or into future quarters that we're going to do everything we can to drive net adds higher.

Scott C. Beasley: Underlying demand is still very healthy, but there might be some of those orders that get pushed into late Q2 or into future quarters. Now, we're going to do everything we can to drive net ads higher and get those orders installed, but some of them could be pushed into future quarters. So overall, we feel good about our net ad momentum. We expect a strong quarter in Q2, followed by a strong second half of the year.

Speaker Change: And get those orders installed, but some of them could pushed into future quarters. So overall, we feel good about our net add momentum we expect a strong quarter in Q2, followed by a strong second half of the year.

Nicholas Simon Jeffery: Scott, thanks. On the second part of your question, the kind of structural slowdown you're seeing in some parts of the industry. Yeah, look, I think the point to raise there is that what we do is really a scale game. And we are the largest pure play fiber provider in the U.S. We kind of got out of the stores early. We were fast on this.

Scott C. Beasley: Scott Thanks.

Scott C. Beasley: The second part of your question kind of structural slowdown.

Scott C. Beasley: You are seeing in some parts of the industry.

Scott C. Beasley: Yeah look I think the point to raise there is the what we do is really a scale game.

Scott C. Beasley: And we are the largest pure play fiber provider in the U S. We kind of got out of the still early we were fast on this and.

Nicholas Simon Jeffery: And, you know, we have certain structural advantages relative to our competition. For instance, our ability to overlash existing overhead cables with fiber or to use existing ducts to pull fiber through that others simply don't have. So we've got a cost and scale advantage, and that's really underpinned our ability to accelerate delivery. And we're delivering about three and a half thousand fiber passes a day and converting those, very predictably now, into new customers.

Scott C. Beasley: We have certain structural advantages relative to our competition for instance, our ability to overlap existing overhead cables.

Scott C. Beasley: Cables with fiber or to use existing duct to pull fiber through that others simply don't have so we've got a cost and scale advantage and that's really underpinned our ability to accelerate delivery and we're delivering about three and a half thousand five of policies a day and converting those very predictably now.

<unk> into new customers and that flows through into of course revenue and EBITDA growth from those customers give us an opportunity to upsell both speed.

Nicholas Simon Jeffery: And that flows through into, of course, revenue and EBITDA growth. And those customers give us an opportunity to upsell both speed and new services. And as you heard in the prepared comments, we're now having 60 percent of our intake customers buying one gig and above speed, and more than 50 percent of our customers taking one value-added service or more. So we've kind of got scale, momentum, and depth in the industry. Now, if you don't have those,

Scott C. Beasley: And new services and as you heard in the prepared comments, we're now having 60% of our intake customers buying one gig and above speeds and more than 50% of our customers, taking one value added service or more.

Scott C. Beasley: So we've kind of got to scale momentum.

Scott C. Beasley: And depth.

Scott C. Beasley: The industry now if you don't have those things.

Nicholas Simon Jeffery: I think fiber is a very, very difficult market to get into. If you're subscale, if you're capital constrained, if your costs are structurally higher than those of large operators, I think this is a difficult game to be in. And perhaps we're seeing some operators, some smaller ones in the market, beginning to feel that a little bit more and asking themselves, how do they reach scale? That's a question for them, of course, rather than for us.

Scott C. Beasley: Fiber is a very very difficult market to get into if you're subscale pure capital constrained.

Scott C. Beasley: Of course, the structurally higher than scale operators I think this is a difficult game to ban and perhaps we're seeing some operators some smaller ones in the market beginning to feel that a little bit more and asking themselves how do they reach scale.

Scott C. Beasley: That's a question for them of course, RASM for us, but I think thats whats going on we see from our perspective, a very healthy dynamic.

Nicholas Simon Jeffery: But I think that's what's going on. We see, from our perspective, a very healthy dynamic, and one that continues to accelerate this flywheel effect we've talked about before, where we build fiber, convert it to customers, upsell and cross-sell, improve customer care, get great NPS numbers that then flow through into our ability to build more, get more customers, and sell them more stuff. So that flywheel is working very well for us. Perhaps if you didn't have scale, it'd be less easy to get that going, and perhaps you'd struggle slightly more.

Scott C. Beasley: One that continues to accelerate this flywheel effect, we've talked about before as we build fiber converted customers upsell and cross sell improve customer can get great NPS numbers that that flows through into our ability to build more get more customers selling more stuff. So that flywheel is working very well for us.

Scott C. Beasley: Perhaps if you haven't got scale, it's less easy to get that going and perhaps.

Struggled slightly more.

Nicholas Simon Jeffery: Just touch briefly on your question on cyber. As I shared at the top of the call, we did have a cyber incident in mid-April that impacted some of our IT systems. And I am hugely grateful to our amazing IT team, who work absolutely tirelessly, and our core IT systems and our backups are up and running, and perhaps most importantly, financially. We don't expect any material impact. So thank you for your question, operator. Perhaps we'll take the next question.

Scott C. Beasley: Just touch briefly on your question on cyber.

Scott C. Beasley: At the top of the call. We did have a cyber incident in mid April that impacted some of our it systems.

Scott C. Beasley: And I am hugely grateful to our amazing team, who worked absolutely tirelessly and our core it systems and our back up and running and perhaps most importantly financially we don't expect any material impact from this.

Thank you for your questions operator, we'll take the next question now.

Operator: Our next question is from Jonathan Chaplin with Newstreet. Your line is now open.

Scott C. Beasley: Our next question is from Jonathan Chaplin with New Street. Your line is now open.

Operator: Thanks, guys. A couple, probably for Scott.

Jonathan Chaplin: Thanks, guys couple.

Scott C. Beasley: On ARPU, it looks like if we back up the gift card impact that it grew, FiberArp broadband ARPU grew at about three and a half percent, which is sort of right in the middle of your range. Is that a good steady state to sort of think about going forward? Or can you accelerate, given the sort of sweet drive you spoke about, Scott, towards the top end of the range? And then you laid out a very clear picture for accelerating revenue growth with consumer accelerating business flat.

Jonathan Chaplin: Probably for Scott on <unk>, it looks like you'd be backup gift card impact fiber broadband are concerned about three and a half a cent which is still the bright in the middle of your range is that a good steady state to sort of think about going forward or can you accelerate given the sort of the key drivers he spoke about Scott towards the top end of.

Jonathan Chaplin: The range.

Jonathan Chaplin: And then you laid out a very clear picture for accelerating revenue growth with consumer accelerating business flat.

Scott C. Beasley: Does that drive steadily accelerating EBITDA growth as we progress through the year as well? And I'm wondering if you can, in the context of that, just give us a little bit more color on SAC and how you think that evolves in the fiber business. Thanks.

Jonathan Chaplin: That drives.

Jonathan Chaplin: Sadly accelerating EBITDA growth as we progress through the year as well I'm wondering if you can in that context.

Jonathan Chaplin: Of that just give us a little bit more color on on stack and how you think that evolves in the fiber business.

Jonathan Chaplin: Yeah.

Scott C. Beasley: Great. Let me take those one by one.

Jonathan Chaplin: Great. Let me take those one by one on <unk>, you're right headline number was 6% that's very healthy.

Jonathan Chaplin: We have reduced our reliance on gift cards, if you normalize for gift cards and take those out it was about three 5% year over year and that's right in the middle of that 3% to 4% a year.

Scott C. Beasley: On ARPU, you're right. The headline number was 6%. That's very healthy.

Range that we've talked about so we're working hard on each of those three levers that Nick described with excellent progress there could move towards the top end of the range of 4% but.

Jonathan Chaplin: But we feel good about where we are now in the ARPA trajectory.

Scott C. Beasley: We have reduced our reliance on gift cards. If you normalize for gift cards and take those out, it was about 3.5% year-over-year, and that's right in the middle of that 3% to 4% a year range that we've talked about. Accelerating revenue growth, you talked about how that was going to flow through into EBITDA growth. I'd say we're really pleased with our EBITDA performance this quarter. 5% adjusted EBITDA growth was our fastest pace since 2016.

Jonathan Chaplin: Accelerating revenue growth.

Jonathan Chaplin: You talked about how how is that going to flow through into EBITDA growth I'd say, we're really pleased with our EBITDA performance this quarter.

Jonathan Chaplin: 5% adjusted EBITDA growth was our fastest pace since 2016 Q1's growth rate and absolute number give us increased confidence in our full year guidance, but it's still early in the year. So we've got another three quarters and we will work to keep the momentum going but we feel good about the strong start to the year.

Scott C. Beasley: Q1's growth rate in absolute numbers gives us increased confidence in our full year guidance, but it's still early in the year. So we've got another three quarters, and we'll work to keep the momentum going, but we feel good about the strong start to the year.

Scott C. Beasley: And then I think your final question was on subscriber acquisition costs. We're finding subscriber acquisition costs vary by geography and vary by unit type, in that every geography we go into has a different ideal sales channel mix. Some of the geographies rely much more heavily on door-to-door, some of them are more digitally inclined, some of them we've had a lot of success selling with partners in cross-sell and big box stores, and so the mix is going to be a big determinant of our subscriber acquisition costs.

Jonathan Chaplin: And then I think your final question was on subscriber acquisition costs.

Jonathan Chaplin:

Jonathan Chaplin: We're finding subscriber acquisition costs vary by geography, and vary by unit type and that every geography, we go into as a different ideal sales channel mix some of the geographies or rely much more heavily on door to door some of them more digitally inclined.

Jonathan Chaplin: And some of them and we've had a lot of sales lot of success selling with partners and cross sell in.

Jonathan Chaplin: Big box stores and so.

Jonathan Chaplin: The mix is going to be a big determinant of our subscriber acquisition costs now as Nick mentioned, we are at scale and we're continuing to.

Scott C. Beasley: Now, as Nick mentioned, we are at scale, and we're continuing to improve our negotiations with partners. We're continuing to improve our own processes to drive down costs. So while maybe that's not a near-term thing during this hyper-growth phase, we are working on it. Thanks for your questions.

Jonathan Chaplin: Prove our negotiations with partners were and continue to improve our own processes to drive down costs. So while maybe that's not a near term thing. During this hyper growth phase we are working to tightened down subscriber acquisition cost in the medium term.

Scott C. Beasley: Thanks for your questions, Jonathan.

Speaker Change: Thanks for your question Jonathan.

Speaker Change: The next batch of wells.

Operator: Our next question is from Greg Williams with TD Cowan. Your line is now open.

Speaker Change: Our next question is from Greg Williams with TD Cowen. Your line is now open.

Operator: Hi, thanks for taking my question. A good part of the CAPEX capital investment was vendor financing payments. I just wanted to kind of see what the cadence looks like from here on CAPEX and the vendor financing payments. Do you still intend to exit the year with a lower balance on the vendor financing payables than in 2023? Sherry and Tom, this is Scott.

Gregory Bradford Williams: And so on for Greg Thanks for taking my question.

Gregory Bradford Williams: A good part of the Capex.

Gregory Bradford Williams: He was vendor financing payments I, just wanted to kind of see.

Gregory Bradford Williams: See what the cadence looks like from here.

Gregory Bradford Williams: On Capex and the vendor financing payments you still intend to exit the year with a lower balance on the vendor financing payable spend in 2023.

Scott C. Beasley: Jerry and Tom, this is Scott. A few points on cash capital investment. So we had roughly $1 billion in Q1. That was part of our overall $3.0 to $3.2 billion guidance that we gave last quarter. And It was roughly $100 million lower than Q1 of last year. So, good year-over-year progress. We expect a material step down from Q1 into Q2, and then smaller declines in Q3 and Q4. So we're highly confident in the range that we gave, and we're right on track to deliver that.

Gregory Bradford Williams: Sure Tom This is Scott.

Gregory Bradford Williams: Viewpoints on cash capital investment. So we had roughly $1 billion in Q1 that was part of our overall 3.0 to $3 $2 billion guidance that we gave last quarter. It was and it was roughly $100 million lower than Q1 of last year. So good year over year progress we expect.

Gregory Bradford Williams: A material step down from Q1 into Q2, and then smaller declines in Q3 and Q4. So we're highly confident in the range that we gave and we're right on track to deliver that.

Scott C. Beasley: In terms of the vendor financing, you'll see that we did reduce our balance on payables and vendor financing by about $350 million. We expect that, and we only have about $50 million remaining on the vendor financing. So we expect that to kind of be in that range for the rest of the year. That would imply a large reduction as we exit 2024 versus where we exited in 2023. So we feel good about that as part of our capital.

Gregory Bradford Williams: In terms of the vendor financing youll see that we did reduce our balance on payables and vendor financing by about $350 million, we expect that.

Gregory Bradford Williams: <unk>.

Gregory Bradford Williams: And we only have about $50 million remaining on the on the vendor financing. So we expect that to kind of be in that range for the rest of the year.

Gregory Bradford Williams: That would imply a large reduction as we exit 2024 versus where we exited 23. So we feel good about that as part of our capital investment.

Gregory Bradford Williams: Okay.

Speaker Change: Got it thanks.

Scott C. Beasley: Got it. Thanks. Thanks, Anton. Operator, we'll take the next question.

Speaker Change: Yeah.

Speaker Change: Thanks, Anton operator, we'll take the next question.

Operator: Our next question is from Sam McHugh with BNP Paribas. Your line is now open.

Speaker Change: Our next question is from Sam Mchugh with BNP Paribas. Your line is now open.

Operator: Morning, guys. A couple of questions on the 23 expansion market. We can see the penetration rates look a bit more like the 21 build versus the 22 build. So just any color you can give on how we should think about the progression of those builds and the similarities or differences to the previous build. And the second question was about pension contributions. So you reiterated the guide of one hundred and twenty five million for the year.

Samuel McHugh: Good morning, guys excuse me a couple of questions on the 23 expansion market. We can see the penetration rates look a bit more like the 21 build versus the 22 Bill. So just any color you can give on how we should think about the progression of those builds on the similarities or differences to the previous builds and the second question was on pension contributions. So you re.

Samuel McHugh: Reiterated the guide of the $125 million for the year, but just in Q1, we saw a $146 million change in the cash flow on the pension and postretirement liabilities I Wonder if you could just help us square that circle almost of your numbers.

Operator: But just in Q1, we saw a change of one hundred and forty six million in the cash flow on the pension and post retirement liabilities. I wonder if you could just help us square the circle on those two numbers. Thanks.

Scott C. Beasley: Sure. So, I'll take the cohorts and then talk about the pension contribution. I mean, I think we're very much in line with where we've expected to be in expansion penetration. We've hit the target range for all of the different cohorts, but we said every cohort is going to be slightly different. They're going to have different geographic mixes.

Speaker Change: Sure. So on I'll take the cohorts and then talk about the pension contribution I mean, I think the we're very much in line with where we expected to be in expansion penetration we've hit the target range.

Speaker Change: For all of the different cohorts, but we said every cohort is going to be slightly different they're going to have different geos geographic mixes theyre going to have different build type mixes different mix of single family multi dwelling.

Scott C. Beasley: They're going to have different build type mixes, a different mix of single-family, multi-dwelling, and SMB. And so, I wouldn't draw too many conclusions from a single quarterly cohort. You've really got to look at a full year or even multiple years. And when you do that, you'll see our customer growth is very healthy, and our penetration rates are right on target with where we expected them to be. And that's with the accomplishment of 6% ARPU growth.

SMB and so I wouldn't draw too many conclusions from a single quarterly cohort you really got to.

Speaker Change: Looking at full year or even multiple years.

Speaker Change: And when you do that you'll see our customer growth is very healthy and our penetration rates are right on target with where we expected them to be and Thats with you.

Speaker Change: Accomplishment up 6% ARPA growth. So we feel good about overall expansion growth and where that's headed.

Scott C. Beasley: So, we feel good about overall expansion growth and where that's headed. On the pension contribution, there were a few moving parts, and we contributed $52 million of cash in Q1. And then there was also, given the change in discount rates and a retirement package that a number of employees took, there was a pension revaluation.

Speaker Change: On the pension contribution.

Speaker Change: <unk>.

Speaker Change: There were a few moving parts and we contributed $52 million of cash in Q1, and then there was also.

Speaker Change: Given the change in discount rates and a.

Speaker Change: Retirement package that a number of employees took there was a pension revaluation will have more details on that in the Q that will be published later today.

Scott C. Beasley: We'll have more details on that in the Q that will be published later today. Awesome. Thank you, Scott. Thanks, Sam. Operator, we'll take the next question.

Speaker Change: Awesome. Thanks, Scott.

Speaker Change: Thanks, Sam operator, we'll take the next question.

Operator: Our next question is from Peter Supino with Wolf Research. Your line is now open.

Speaker Change: Our next question is from Peter Zaffino with Wolfe Research. Your line is now open.

Operator: Hey, good morning, everybody. I wanted to follow up on Mike's question earlier in the Q&A about base penetration. Mike, or rather, maybe Scott or Nick, could you discuss the composition of your gross ads in your mature 45% penetrated markets? We're curious about their ARPU and their origin. For example, are they mostly movers? Or is this the same location switching from cable as you experienced in the younger vintages? And then, in the same market, how does ARPU compare to your base? Does it skew towards premium, or are these new gross ads more price-conscious customers like the ones targeted by your value segment promo in the first quarter? Thanks.

Peter Zaffino: Hey, good morning, everybody I wanted to follow up on Mike's question earlier in the Q&A about base penetration like rather maybe Scott or Nick could you discuss the composition of your gross adds.

Peter Zaffino: Mature, 45% penetrated markets, we're curious about their <unk> and their origin for example, I mean most removers.

Peter Zaffino: Is this same location switching from cable is your experience in the younger vintages.

Peter Zaffino: And then in the same markets and how does <unk> compare to your base does it skew towards premium or are these new gross adds more price conscious customers.

Peter Zaffino: Like the ones targeted by your value segment promo in the first quarter.

Nicholas Simon Jeffery: Yeah, hi Peter, Nick here. I mean, just to remind everybody what we've said on multiple earnings calls before, that the vast majority of our new customers come from cable. That's where we're winning. And, in fact, we have taken market share from every competitor in every geography we operate in now for a number of quarters. But Scott, do you want to pick up the specific question on that kind of ARPU and so on? Sure, sure.

Speaker Change: Yeah, Hi, Nick It I mean, just to remind everybody. What we've said on multiple earnings calls before the vast majority of our new customers come from cable.

Speaker Change: We are winning and in fact, we have taken market share from every competitor in every geography, we operate in now for a number of quarters, but Scott you want to pick up the specific question on kind of offer and sure sure. So we don't we don't.

Scott C. Beasley: Sure, so we don't differentiate externally between base ARPU and expansion ARPU. I'd say our intake ARPU is still very healthy.

Scott C. Beasley: Differentiate externally between base <unk> and expansion of our <unk> I'd say, our intake ARPA is still very healthy.

Scott C. Beasley: We have had a promotional offer in certain parts of our geography, largely to kind of smooth out the transition from ACP, that offers are resonating with customers, but we have a large portion of our customers taking our premium plan. So, we talked about roughly 60% of our new customers are taking one gig or higher. We've actually had increasing success with two gigabit and five gigabit, which has been great. And then we have a healthy portion of our customers taking value-added services at the point of sale because they realize that they want whole home Wi-Fi or YouTube TV or other different value-added services that we offer. We're encouraged by our intake offer, by our base ARPU, as well as our expansion ARPU.

Scott C. Beasley: We have had a promotional offer in certain parts of our geography, largely to kind of smooth out the transition from ACP that offers resonating with customers, but we have a large portion of our customers taking our premium plans. So we talked about roughly 60% of our new customers are taking one gig.

Scott C. Beasley: Or higher or higher we've actually had increasing success with two gig five gig.

Scott C. Beasley: Which has been great and then we have <unk>.

Scott C. Beasley: Healthy portion of our customers taking value added services at the point of sale because they realize that they want a wi fi or Youtube TV or other different value added services that we offer so.

Scott C. Beasley: We're encouraged by our intake offer.

Scott C. Beasley: Our base <unk> as well as our expansion of our business.

Nicholas Simon Jeffery: One more question, if I could on competition in your copper footprint. Is there an argument for going faster in your fiber expansion within your ILAC footprint? And could it even make sense under some circumstances to use a financial partner in order to go faster given the interest of multi-tenant models and building out their footprints?

Speaker Change: And final question, if I could on competition in your on your copper footprint is there an argument for going faster your fiber expansion within your ILEC footprint.

Nicholas Simon Jeffery: Thank you.

Speaker Change: And could it even makes sense under some circumstances to use it for neutral partner in order to go faster given the interest.

Multi tenant models and building out their footprint. Thank you.

Nicholas Simon Jeffery: Yeah, hi, it's Nick. I'll take that. Yes, look, we're building as fast as we can, and as fast as the company as a whole can sensibly manage. And by sensibly, I mean making all parts of the company work to produce the kind of really strong results you see in the first quarter. Now, why are we doing that? Of course, in part to make sure that we preserve the very attractive market structure that we operate in, where across our footprint, in 86% of our footprint, we have one or fewer gigabit-capable competitors.

Speaker Change: Yeah, Hi, it's Nick I'll take that.

Yes look we are building as fast as we can and as fast as the company as a whole can sensibly manage and by that I mean, making all parts of the company work to produce the kind of really strong results you see in the first quarter.

Now why are we doing that of course in part to make sure that we preserve the very attractive market structure that we operate in across our footprint.

Speaker Change: And 86% of our footprint, we have one or few gigabit capable competitors in market structure is one of the most attractive things about the fiber market in the U S and relatively unique in my experience relative to other markets around the world is it really a beautiful thing and one of the main reasons I wanted to come to frontier.

Nicholas Simon Jeffery: And market structure is one of the most attractive things about the fiber market in the U.S. and, in my experience, relatively unique relative to other markets around the world. It's really a beautiful thing and one of the main reasons I wanted to come to Frontier and see if we could make this the company that I think it can be. And this quarter is great evidence that we're doing that. So perhaps, Scott, any comments that you want to make on this? No, I think we have a lot of different opportunities.

Speaker Change: See if we can make this the company that I think it can be in this quarter is great evidence that we're doing that so perhaps.

Speaker Change: Scott any comments you want to make on this.

Nicholas Simon Jeffery: No, I think we have a lot of different opportunities to fund the build. We've talked about exploring different financing options, different joint ventures, different strategic partnerships. So if the opportunity comes to build even faster, that's part of the strategic review, and we're looking at that right now.

Scott C. Beasley: No I think we have a lot of different opportunities to fund the build we've talked about we will.

Scott C. Beasley: We are exploring different financing options different joint ventures different strategic partnerships. So if the opportunity comes to build even faster that's part of the strategic review and we're looking at that right now.

Speaker Change: Thanks Peter.

Speaker Change: Thank you.

Scott C. Beasley: Our next question is from Nick Del Deo with Moffett Nathanson. Your line is now open.

Speaker Change: Our next question is from Nick del Deo with Moffett Nathanson.

Speaker Change: Your line is now open.

Operator: Hey, good morning, guys. So, you know, you emphasize that over 60% of new customers are taking speeds of at least a gig. It looks like in recent months you introduced a 200 meg plan. I assume that was primarily to help with ACP customers because I think historically the lowest you've offered is 500 meg. I guess ACP was kind of the sole goal? Were you marking that more broadly? Are you planning to keep it for the longer term?

Hey, good morning, guys.

Speaker Change: Okay.

Speaker Change: You emphasized at over 60% of new customers are taking speeds of at least the gig it looks like in the recent months you introduced the 200 Meg plan.

Speaker Change: I assume that was primarily to help with ACP customers, because I think historically the lowest you've altered as 500 megs.

Speaker Change: I guess it was a.

Speaker Change: Kind of a sole goal or are you marketing that more broadly are you planning to keep it longer term.

Operator: And then second, on the bead front, can you update us on any work you're doing outside of a potential JV or other capital source to prepare for that, like getting the data models together, conducting outreach with the PUCs, and so on?

Speaker Change: And then second on the Beach front can you update us on any work Youre doing.

Speaker Change: Outside of a potential JV or other capital source to prepare for that like getting the data models together conducting outreach with the puc's and so on.

Nicholas Simon Jeffery: Yeah, thanks, Dick. I'll start, perhaps, and then, Scott, you pick up the second half of the question. Yeah, look, we're really, really pleased with the rate at which new customers are trading up our speed ladder and buying more value-added services. You know, if we track back to the beginning of this story three years ago or three and a half years ago, when we set out our pricing strategy, it was an abstract concept then, but we've really brought it to life.

Yeah. Thanks, Craig I'll start, perhaps and then Scott you pick up the second half of the question.

Scott C. Beasley: Yes look we're really really pleased with the rate at which new customers are trading up.

Scott C. Beasley: The ladder and buying more value added services and if.

Scott C. Beasley: If we track back to the beginning of the story three years ago, three and a half years ago. When we set out our pricing strategy with an abstract concept then, but we've really brought it to life and pretty much every quarter were seeing the same.

Nicholas Simon Jeffery: And pretty much every quarter, we're seeing the percent of customers taking the gig-plus service increase. And that just speaks to the fundamental demand that's out there in the market for the best, the newest, the fastest. And that's what we provide. So really, really strong traction right across the customer cohort, trading up from half a gig to one gig, one gig to two gig, two gig to five gig. And I remind everybody that our network is already 10 gigabit symmetrical capability end-to-end and would be upgradable beyond that for very, very limited capital because the fiber system is already in the ground, and we would only need to change the electronics, which is a very simple thing to do, to go way, way, way beyond that.

<unk> of customers, taking gig plus service increase and that just speaks to the fundamental demand that's out there in the market for the best the newest the fastest and that's what we provide so really really strong traction right across the customer cohorts trading up from half a gig one gig one gig to two gig 10 gig five gig and I'll remind everybody.

Scott C. Beasley: That our network is already 10 gig symmetrical capability end to end.

Scott C. Beasley: And would be upgradable beyond that or very very limited.

Scott C. Beasley: Capital because the fiber system is already in the ground and we would only need to change in electronics, which is a very simple thing to do.

To go way way way beyond that so we have a very very extendable speed price ladder and then of course, we lay our value added services on top of that and we.

Nicholas Simon Jeffery: So we have a very, very extendable speed price ladder. And then, of course, we layer value-added services on top of that, and we're finding customers really, really want to buy those sorts of things. So we're going to keep extending that portfolio as well. So that bit of the machine works really, really well. But part of our role is also to make sure we have all quadrants of the market covered. Not just the very high end, but also the on-ramp to that ladder of the lower end. Hence the 200-meg plan that you're seeing.

Scott C. Beasley: We're finding customers really where you want to buy those sorts of things. So we're going to keep extending that portfolio as well so that bit of the machine works really really well.

But part of our role is also to make sure we have all quadrants that the market covered.

Scott C. Beasley: Not just the very high end, but also the on ramp to that ladder of the lower end.

Scott C. Beasley: Hence the 200 Meg plan that Youll see that so I think best viewed as a as an experiment.

Nicholas Simon Jeffery: That's, I think, best viewed as an experiment, as a pilot, as a prototype. We do that all the time in different geographies, in different ways, trying to figure out how we create real value for our customers and unlock new values. Now, it is true that, in part, we were experimenting with ways to capture some of the ACP market. And I'll remind everybody that we actually have a relatively low exposure to the ACP market, about 4% of our customers. But there are other ACP customers out there that may find Frontier an attractive opportunity.

Scott C. Beasley: Pilot prototype.

Scott C. Beasley: When you do that all the time in different geographies and different ways trying to figure out how we create real value for our customers and unlock new value.

Scott C. Beasley: Oh Wow.

Scott C. Beasley: It is true that in part.

Scott C. Beasley: What we were experimenting with ways to capture some of the ICP market and I'll remind everybody that we're actually you have a relatively low exposure to the ACP market about 4% of our customers, but there are other ACP customers out there that may find.

Scott C. Beasley: Frontier and attractive opportunity and so we were.

Nicholas Simon Jeffery: And so we were kind of prototyping what might work for those customers, and we pulsed those pilots in and out of geographic markets all the time. We picked up on one, but you'll see many others if you look closely around the country.

That kind of a prototyping what might work for those customers.

Scott C. Beasley: I'll put it in and out.

Scott C. Beasley: Geographic markets all the time, so you've picked up on one but youll see many others. If you look closely around the country. We post them in we learn we called out we review, we regroup and we go again and we keep doing that cycled right across all speed ladder to find out what the optimal mix it and at the end of the day that result in the kind of things you've seen with <unk>.

Scott C. Beasley: We pulse them in, and we learn. We pulse out. We review. We regroup, and we go again. And we keep doing that cycle right across our speed ladder to find out what the optimal mix is. And at the end of the day, that results in the kind of things you've seen with 18% growth in our consumer fiber broadband, 6% ARPU growth, and 24% combined growth. So that's the sort of broader picture on what you're seeing with the 200 meg offer. Scott, do you want to just pick up on the second point? Sure. Let me answer your B question.

Scott C. Beasley: 18% growth in AR.

Scott C. Beasley: Consumer fiber broadband, 6% op growth in 24% combined growth. So that's the sort of broader picture on what youre seeing with the 200 Meg off of Scott do you want to pick up the second point sure. Let me answer your B question Nick.

Scott C. Beasley: Sure, let me answer your BEAD question, Nick. You're right; we are deeply involved in scaling up a team to go after BEAD in a disciplined but strong way. So we've built out our grants team. We have an excellent team.

Scott C. Beasley: You are right. We are deeply involved in scaling up a team to go after bead and a disciplined but strong way. So we built out our build out of our grants team we have an excellent team.

Scott C. Beasley: We've done a lot of data modeling and actually included the eligible locations and adjacent areas into our integrated build model, so we have an understanding of how they would fit with what we're already planning to build. We've begun outreach to states, and we've even begun the pre-qualification process with a handful of states. So in terms of timing, anybody's guess as to when that starts flowing in greater numbers, but we're ready for B.E.A.D. We think it's an important program. We'll be disciplined on it, but we think it's an exciting way to expand our total addressable market. Thanks, Nick. Operator will take the next question.

Scott C. Beasley: We've done a lot of data modeling and actually.

Scott C. Beasley: Included.

Scott C. Beasley: Eligible locations.

Jason areas into our integrated build models, we have an understanding of how they would fit with what we're already planning to build.

Scott C. Beasley: Gone outreach to states and then we've even begun the prequalification process with a handful of states. So in terms of timing.

Anybody guess as to when that starts flowing in.

Scott C. Beasley: Greater numbers, but we're ready for <unk>, we think it's an important program will be disciplined on it but.

Scott C. Beasley: But we think an exciting way to expand our total addressable market.

Speaker Change: Thanks, Nick.

Speaker Change: Operator, we'll take the next question.

Operator: Our next question is from Simon Flannery with Morgan Stanley. Your line is now open.

Speaker Change: Our next question is from Simon Flannery with Morgan Stanley. Your line is now open.

Operator: Great. Thank you very much. Good morning.

Simon William Flannery: Great. Thank you very much good morning, just coming back to the outage quickly are you or have you granted any credits to customers is there anything we should be thinking on that front.

Scott C. Beasley: Just coming back to the outage quickly, are you or have you granted any credits to customers? Is there anything we should be thinking on that front? And then you talked about the strong growth in your fiber revenue, business, and wholesale. It was particularly strong. I think it was up about 8% sequentially. I know you talked about some of the drivers like pricing actions and value-added services, but any more color you could talk about, you know, is this a good run rate going forward? Thanks. Sure, Simon.

Simon William Flannery: Then on you talked about the strong growth in your fiber revenue business and wholesale was particularly strong I think it was up about 8% sequentially. I know you talked about some of the drivers like.

Simon William Flannery: Pricing actions and value added services, but any more color you could talk about is this a good run rate going forward. Thanks.

Scott C. Beasley: Sure, Simon. Let me take the first one.

Scott C. Beasley: We'll stick to what we've said in 8K, where we don't expect it to have a material financial impact, but beyond that, we aren't talking about any specifics around customers or systems. On business and wholesale, we've said that is a lumpy business, where you get some orders, some big installations that may hit one quarter, not another quarter. We're really encouraged by the underlying strength of business and wholesale. The fiber portion of that grew healthfully.

Speaker Change: Sure Simon let me take the first one.

Speaker Change: We'll stick to what we've said in the 8-K, where we don't expect it to have a material financial impact, but beyond that arent talking about any specifics around customers or <unk>.

Speaker Change: Systems.

Speaker Change: Business and wholesale.

Simon William Flannery: We've said that is that is a lumpy business, where you get some orders some big installations that may hit one quarter not another quarter, we're really encouraged by the underlying strength of business in wholesale the fiber portion of that grew healthily, that's going to be the the driver there.

Scott C. Beasley: That's going to be the driver there. And then the offset is going to be managing the legacy product churn. And we did a really good job of that in Q1. We're staying focused on that. So, again, business and wholesale, we expect to be roughly stable throughout the year. That's plus or minus 2%.

Simon William Flannery: And then the offset is going to be managing the legacy product churn and we did a really good job of that in Q1, we're staying focused on that so.

Scott C. Beasley: And this was a good start. Thanks, Simon. Great. Operator, we'll take the next question. Our next question is from Frank Louthan with Raymond James. Your line is now open. Hey guys, this is Rahul and for Frank. You mentioned earlier in the call that

Simon William Flannery: Again business wholesale we expect to be roughly stable throughout the year, that's plus or minus 2%.

Simon William Flannery: This was a good start to the year.

Speaker Change: Thanks, Simon Greg Thank you.

Speaker Change: Operator, we'll take the next question.

Operator: Our next question is from Frank Louthan with Raymond James. Your line is now open.

Speaker Change: Our next question is from Frank Louthan with Raymond James Your line is now open.

Yeah.

Speaker Change: Hey, guys. This is rob on for Frank.

Rob: You mentioned earlier on the call that ACP is an unknown impact to you guys can you quantify your ACP exposure in terms of number of subs also what are you currently seeing in the way of fixed wireless access competition in the marketplace and then lastly have you seen any recent changes to the construction outlook.

Or is everything mostly running on schedule. Thank you.

Operator: Sure. Rob, good to hear from you.

Rob: Sure.

Speaker Change: Good to hear from me I'll take one and three so ACP and then the construction outlook and then.

Speaker Change: Pass to Nic for fixed wireless on ACP, just a few data points all of which we've shared before so our exposure is relatively low as Nick said, roughly 4% of our customer base.

Scott C. Beasley: I'll take one in three, so ACP and then the Construction Outlook, and then pass to Nick for Fixed Wireless. For ACP, just a few data points, all of which we've shared before. So our exposure is relatively low, as Nick said, roughly 4% of our customer base. But we do have an offer in the market to continue to serve that quadrant of the market. It's responding well, and we don't expect there to be a material impact. We may even be able to win some new customers that roll off of competitor ACP plans, but again, we'll wait and see there. And then three, the timing is a bit unknown.

We do have an offer in the market too.

Nic: Continue to serve that quadrant of the market, it's resonating well and we don't expect there to be material impact we may even be able to win some new customers that roll off of competitor HEB plans, but again, we'll wait and see there.

Nic: And then three the timing is a bit unknown.

Scott C. Beasley: We may see some impact from ACP roll-offs in late Q2, but more likely, the impact will be in Q3 and Q4. So that's the ACP. On your third question around the construction outlook, we see it relatively stable. We have partnerships with a great kind of national players. We have smaller regional partnerships, but in large part, they've been able to scale up to meet the demands of the industry. We've seen a number of other builders scale back their plans, and that has relieved some pressure on labor costs. So we feel confident about the year and are thankful for our partners for continuing to deliver on our capital budget and on time. And I'll pass it to Nick on fixed wireless. Yeah.

Nic: May see some impact from ACP roll offs in late Q2, but more likely the impact will be in Q3 and Q4.

Nic: So that's a CP on your your third question around construction outlook.

Nic: We see it relatively stable.

Nic: We have.

Nic: Partnerships with great.

Nic: National players, we have smaller regional partnerships and large part they've been able to scale up to meet the demands of the industry. We've seen a number of other builders scaled back their plans and that is relieve some pressure on labor costs. So we feel confident in the year.

Nic: And are thankful for our partners for continuing to deliver on our capital budget and on time and I will pass to Nick on fixed wireless.

Nicholas Simon Jeffery: On fixed wireless, I mean, it's a subject we've talked about a number of times previously, but we haven't really seen an impact of FWA on our fiber footprint, and that's probably because FWA and full symmetrical high-speed fiber really do serve very different market segments. You know, early career apartment dwellers and so on, whereas Full Fiber is a fantastic service for homes with multiple mobile devices, PlayStations, 4K TVs, all of that stuff, and, of course, for businesses.

Nicholas Simon Jeffery: Fixed wireless I mean, it's a subject we've talked about a number of times previously, but we haven't really seen an impact of FW I in our fiber footprint and that's probably because <unk> and full symmetrical high speed fiber really do so very different market segments FWS, great kind of mobile at construction sites.

Nicholas Simon Jeffery: Early carrier apartment dwellers, and so on whereas full fiber is a fantastic service for how our homes that with the with multiple mobile devices Playstations volt Tvs, all up all of that stuff and of course for the businesses.

Nicholas Simon Jeffery: And actually, if we step back, in fact, our fiber broadband has gained share against every competitor in every geography. And on our base fiber footprint, which, as I said earlier, is our most mature, where we have full competition of all sorts. We actually do have a significant overlap with FWA, yet our penetration has still systematically marched up over the last three and a bit years, now reaching a goal of at least 45%, and it's continuing to grow.

Nicholas Simon Jeffery: And actually if we step back in fact.

Nicholas Simon Jeffery: Fiber broadband has gained share against every competitor in every geography.

Nicholas Simon Jeffery: Based fiber footprint, which as I said earlier is our most mature where we have full competition of all sorts.

Nicholas Simon Jeffery: We actually do have a significant overlap with SWA.

Nicholas Simon Jeffery: Penetration has still systematically marched up over the last three and a bit years now reaching Ah.

Nicholas Simon Jeffery: <unk> of at least 45% and it's continuing to grow.

Nicholas Simon Jeffery: Now, of course, we do see FWA nibble a little bit at our copper base, although not as much, perhaps, as you might expect, and that may be because a lot of our copper base is very, very rural. But if we step back, we've consistently said that FWA is going to use a huge amount of network capacity from the FWA providers for a relatively insignificant amount of revenue, and you can all do the simple math on how that flows through.

Nicholas Simon Jeffery: Now of course, we do see <unk> enable a little bit at our copper base, although not as much perhaps as you might expect and that may be because a lot of our copper base is very very rural.

Nicholas Simon Jeffery: But if we step back we've consistently said that SWA is going to use a huge amount of network capacity from the <unk> providers for a relatively insignificant amount of revenue and you can all do the simple math on how that flows through.

Nicholas Simon Jeffery: And talking as someone who used to run a big cellular network, I would be asking very serious questions about the sustainability of the business case for FWA. When you look at the kind of cost per gig, capacity limitations, and the continuous exponential rise in data consumption as users hang more and more devices off of individual connections, now at what point does the economics of FWA break down, prices have to go up, and geographic restrictions are put in?

Nicholas Simon Jeffery: And I'm talking with someone he used to run a big cellular network.

Nicholas Simon Jeffery: I would be asking very serious questions about the sustainability of the business case for <unk>. When you look at the kind of cost per gig.

Nicholas Simon Jeffery: Capacity limitations and the continues of exponential rise in data consumption as users, having more and more devices also individual connection now what at what point did the economics. That's W. A breakdown prices have to go up and geographic restrictions put in and I think we're beginning to see some of those moves now appear in the market.

Nicholas Simon Jeffery: And I think we're beginning to see some of those moves now appear in the market, and that is just physics and economics playing out. So we don't think FWA networks were really engineered to serve the same market segment that Frontier is moving into. And with our typical usage of one terabyte and above, and of course, at a top quartile much higher than that, really full symmetrical fiber is really the best solution for connecting homes and businesses.

Nicholas Simon Jeffery: And that is just physics and economics playing through.

Nicholas Simon Jeffery: So we don't think after brain networks, where we engineered to serve the same market segment that frontier is moving into without typical usage of one terabyte and above on a quarter to top quartile much higher than that.

Really full symmetrical fiber is really the best.

Nicholas Simon Jeffery: Solutions connecting homes and businesses and one that really will never be a path for most of the physics and technology point of view and that's one reason why we're very very confident that all five of our strategy is resonating in the market and we'll continue to do over the long term.

Nicholas Simon Jeffery: And one that really will never be surpassed from a sort of physics and technology point of view. And that's one reason why we're very, very confident that our fiber strategy is responding in the market and will continue to do so over the long term. Perhaps, Spencer, back to you to close the call. Absolutely.

Speaker Change: So perhaps pent up back to use of political absolutely. Thanks, Rob for your question and thank you all for joining US we will conclude our first quarter 2024 earnings call. There and we will talk to you in 90 days. Thanks.

Spencer Harris Kurn: Absolutely. Thanks, Rob, for your question, and thank you all for joining us. We'll conclude our first quarter 2024 earnings call there, and we'll talk to you in 90 days. Thanks. Thank you all for your participation. You may now disconnect your line.

Speaker Change: Thank you all for your participation you may now disconnect your line.

We are over the long term.

Speaker Change: But over the long term.

Speaker Change: So perhaps fences.