Verizon Communications Inc. (NYSE:VZ) Q4 2023 Earnings Call Transcript

Verizon Communications Inc. (NYSE:VZ) Q4 2023 Earnings Call Transcript January 23, 2024

Verizon Communications Inc. beats earnings expectations. Reported EPS is $1.08, expectations were $1.07. Verizon Communications Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to the Verizon Fourth Quarter 2023 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for questions following the presentation. [Operator Instructions] Today’s conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to your host, Mr. Brady Connor, Senior Vice President, Investor Relations.

Brady Connor: Thanks, Brad. Good morning, everyone, and welcome to our fourth quarter earnings conference call. I’m Brady Connor, and I’m joined by our Chairman and Chief Executive Officer, Hans Vestberg, as well as our Chief Financial Officer, Tony Skiadas. Before we begin, I’d like to draw your attention to our safe harbor statement, which can be found on Slide 2 of the presentation. Information in this presentation contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties. Discussion of factors that may affect future results is contained in Verizon’s filings with the SEC, which are available on our website. This presentation contains certain non-GAAP financial measures.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the financial materials posted on our website. Earlier this morning, we posted to our Investor Relations website a detailed review of our fourth quarter and full year results. You’ll find additional details in the earnings materials on our Investor Relations website. We’d like to note that Verizon’s fourth quarter reporting earnings per share were negatively impacted by a number of special items, which are discussed in the written remarks available on our Investor Relations website. The largest of the impacts was also disclosed in our 8-K filing last Wednesday. Excluding these special items, adjusted EPS for the fourth quarter was $1.08.

With that, I’ll turn the call over to Hans.

Hans Vestberg: Thank you, Brady. Good morning, everyone, and welcome to our fourth quarter 2023 earnings call. I hope you all had a great start of 2024. I’m pleased to report that Verizon closed out the year with a strong fourth quarter, finishing off a year of solid operation and financial performance. For us, 2023 was a year of continuous improvement and important actions across the business. We made significant changes to how we operate and to our team, and those changes paid off. We stabilized our core business and positioned the company for renewed growth and profitability. We built strong momentum quarter after quarter, culminating in a very good holiday season. And finally, we met the guidance that we provided to you in each of our key performance indicators.

Entering 2024, Verizon stands ready to further unlock our performance potential at an accelerating rate. We now have all the assets, the best team in the business, and a focus on continued operational excellence to deliver even better results going forward. Let me share some full-year highlights with you. Wireless service revenue for 2023 was $76.7 billion, a 3.2% year-over-year increase. We delivered outstanding volumes during a healthy fourth quarter where our customers clearly embraced our offerings. Full-year adjusted EBITDA was $47.8 billion, contributing to a very strong free cash flow of $18.7 billion, reflecting our disciplined and strategic approach to profitable growth. As a result of our financial strength, we raised our dividend for the 17th year in a row with a healthy free cash flow dividend payout ratio of approximately 59%.

We also reduced our year-over-year leverage, while continuing to bring CapEx back towards business as usual levels. This aligns with the capital allocation priorities we have shared in recent years. These results provide a solid foundation for Verizon’s journey and future success. And I’m pleased that we put the leadership and team in place last year that will serve Verizon stakeholders well in both the short and long term. We as a team have focused on capturing the market opportunity, and I’m proud of our progress in 2023. Just two weeks ago, Leslie Berland joined Verizon as our Chief Marketing Officer. I’m excited to bring her on board and have a great confidence in her ability to continue shaping Verizon’s premium brand perception and story.

We started 2023 determined to differentiate ourselves by investing even more in profitable growth while transforming Verizon to make the company more efficient and effective. Seeing the continued strength of the U.S. consumer, busy holiday store traffic and rising demand for mobility, broadband and private networks, we also took actions to fuel growth during the fourth quarter, and it showed in our results. A standout milestone in 2023 was our launch of myPlan, which was designed from extensive customer research to be the most flexible plan available to U.S. consumers from any wireless company. myPlan has been a great success that has seen stellar adoption. Introduced in May, we already have 13.1 million myPlan subscribers. And these customers using premium packages and our unique perks driving ARPA.

Other changes we made in 2023 include establishing a regional distribution model, tailoring our approach to every market, revamping sales composition to support productivity and introducing new price plans and promotions in Consumer and Business. Verizon Business also partnered with HCLTech to be more efficient to deliver post-sale implementation and customer support for managed network services, enhancing our customer service while saving Verizon money. These actions paired with all of our assets sets us up very well for 2024. We are now working from an effective model and this is just the start. Overall, the wireless industry is strong as we head into 2024, and we are confident in our strategy. We have great offerings with optionality to meet the needs of customers of any budget on the best network in the country.

Now, let me share a bit more how each of our service performed in the fourth quarter. Starting with mobility. We had 449,000 postpaid phone net adds, driven by improving net adds in Consumer and a continued sustainable performance in Verizon Business. Our disciplined and segmented market approach is working with customers and creating great economics for our shareholders. In Consumer, you can see the pattern of continuous improvements from the start of the year. In the fourth quarter, we delivered our best postpaid phone gross adds performance since 2019 and our best net adds in two years. We added 318,000 postpaid phone customers in the fourth quarter and our gross adds were up almost 17% year-over-year. It is clear that we have momentum in Consumer as we move into 2024, and we’ll continue to work to get our fair share on new business.

Our customer-centric offers are resonating in the market, and we’re just getting started. By leveraging Verizon’s large subscriber base and key partnership, we can deliver exclusive discount offers like Netflix and Max for just $10 a month, underscoring our industry leadership in value-driven content offerings. With our vast network coverage and the largest base of loyal customers, we’re uniquely positioned to provide targeted high-value deals that deepen relationship across connected devices, streaming and more. Within the value business, which includes our prepaid offerings like TracFone, Visible and Total by Verizon, we still have work to do but are making progress. Moving to Verizon Business. The team continued to deliver on mobility with total postpaid phone net adds of 131,000 for the fourth quarter 2023, marking our 10th consecutive quarter of postpaid phone net adds above 125,000.

For the full year, Business added 562,000 phone net adds, an outstanding result. Our Business customers are prioritizing mobility and value the optionality we offer with highly-tailored plans on the best network in the country. Now, let’s turn to broadband. For the year, we had more than 1.7 million broadband net adds, with more than 1.5 million net adds from fixed wireless access and 248,000 net adds from Fios, a nice increase over 2022. On fixed wireless access, we’re consistently adding more than 350,000 subscribers per quarter, which is part of our plan for steady, sustainable growth that exceeds what we expected at launch. Just three years of the launch, we serve more than 3 million fixed wireless access customers, well ahead of our stated goal of 4 million to 5 million subscribers by the end of 2025.

With fixed wireless access, we’re expanding into new markets and proving the value of Verizon’s connectivity. Customers are finding strong reliability and speed in fixed wireless access and that shows in our results, including a very strong Net Promoter Score. For a product that still is in the beginning, the pace of adoption has the team super excited. We expect this will be a long-term source of recurring revenue for Verizon, and we’re entering this year with a strong base for continued growth. Turning to the private networks and our 5G business solutions. We continue to see interest from large enterprises running complex logistics and operations like ports, automotive and heavy industries. In November, Norfolk International Terminal contracted us to build a second private 5G network for them.

Audi, already one of our partners in smart car development, has contracted us to build a private network for their automotive tech testing environment. And Nucor, one of the country’s largest steel companies, has us building private networks for three of its sites with more to come over the next year. Strategically, we’re building a new source of revenue expansion where we are the clear leader. Last year, we also expanded existing 5G private networks partnerships with NFL to bring new spectator and retail experience to fans everywhere. When we build relationships with these large enterprises and they see what our network can do for them, there is always potential for more business. And our network is just getting better and better every day.

With full access to our spectrum as of the end of third quarter last year, our mission is to optimize the experience in every market and expand into suburban and rural markets, where we know our consumer and business customers are eager to take up our offerings. We have been expanding and improving our network in key markets through 2023 and into this year. I have said it before and I will say it again, our network is the foundation how we offer the best value and premium experience to our customers. And we’re now seeing our investment in C-Band paying off in terms of customer experience and loyalty. Where we have C-Band, we see higher gross adds, lower churn and more step ups to premium services. We also see increased uptake of customers taking both mobility and broadband services.

Meanwhile, millimeter wave, which we have now deployed in many urban areas and all 30 NFL stadiums, sets Verizon apart with an outstanding performance at high density areas and public event spaces. And for the 32nd consecutive time, Verizon was the most awarded company in the country for wireless network quality, with the first place rankings in each of J.D. Power’s six regions. We are the network that America relies on, and we take that commitment very seriously. Looking ahead, our priorities for 2024 are crystal clear. We remain laser-focused on growing wireless service revenue and expanding our adjusted EBITDA and free cash flow to allow for a meaningful debt reduction in the year ahead. This is what our whole team is working towards and what you, our shareholders, and our Board want us to focus on.

Tony will have more details for you, but we anticipate strong wireless service revenue growth of 2% to 3.5% in 2024, which reflects our ability to sustain the top-line of our business as we continue to pursue the right balance of profitability and customer growth. Our adjusted EBITDA profile will continue to improve as we become even more efficient with growth, cost saving measures and our disciplined promotional spending. Our capital allocation priorities remain consistent. And as we lower our capital intensity from the C-Band build out and our new business structure, we expect to see continued strong free cash flow generation going forward. That will enable our Board to continue to raise our dividend and also enable us to bring down leverage.

Now, Tony will discuss the quarter as well as our operations and guidance in more detail.

Tony Skiadas: Thanks, Hans, and good morning. Executing on our plan, we finished the year strong and delivered on our financial guidance. We exited the year with good momentum and remain committed to our three priorities of growing wireless service revenue, adjusted EBITDA and free cash flow. In 2023, we set out to improve our operational performance while sustaining financial discipline. Our fourth quarter and full year results confirm that our strategy is working and that we can deliver strong financials and improve key operating metrics. Consumer postpaid phone net adds totaled 318,000 for the quarter, a substantial improvement of 369,000 sequentially and 277,000 compared to the prior year. Our Consumer postpaid phone churn of 0.88% represents a stable result even after we implemented over $1 billion of annualized pricing actions in 2023.

While we do not provide specific guidance on volumes, we wanted to share a couple of items as we look into 2024. In the first quarter, we are taking additional targeted pricing actions that we expect will result in incremental pressure on Consumer postpaid phone churn in the period. However, we expect to deliver positive Consumer postpaid phone net adds in full year 2024 as we execute on our strategy of growing our subscriber base while being financially disciplined. Postpaid phone gross adds in the quarter were up nearly 17% year-over-year. This represents our best quarterly Consumer gross add performance in four years. Our attractive myPlan offers combined with our segmented approach to the market, regional sales structure and disciplined promotional strategy continued to deliver strong results.

Additionally, postpaid upgrades remained lower as compared to the prior year. The Consumer postpaid upgrade rate was 4.4% in the fourth quarter, down 120 basis points year-over-year as a result of approximately 19% fewer upgrades. As Hans said, we continue to see better performance in markets where we have deployed C-Band. In our first 76 C-Band markets, fourth quarter Consumer postpaid phone gross add growth was 8 percentage points better than in non-C-Band markets. Additionally, Consumer postpaid phone churn in C-Band markets was 4 basis points better than in non-C-Band markets. The strong momentum in the quarter combined with the continued deployment of our C-Band network positions us well in 2024. The quality of the business we are writing in Consumer remains high as myPlan continues to drive premium plan adoption.

The premium take rate in C-Band markets for the quarter was more than 10 percentage points higher than in non-C-Band markets. Consumer ARPA of $134.10 represents an increase of 4.7% year-over-year. This was driven by new customer additions, premium plan adoption and fixed wireless subscriber growth. We expect continued and healthy organic ARPA growth in 2024. Our prepaid results remain challenged in the fourth quarter. This is in part to seasonally weaker national retail sales volumes, which is the primary sales channel for our TracFone brands. We also continue to see pricing pressures from low-end postpaid offerings. Prepaid net losses for the quarter were 289,000. During the quarter, we saw continued strong growth within the Visible and Total by Verizon brands, which we will continue to scale.

The team is also focused on our partnerships to improve the performance of the Straight Talk brand. We believe we’re taking the right steps to better position our offerings in the market and expect to see some stabilization in 2024. Verizon Business delivered another strong quarter with 131,000 phone net adds, which as Hans mentioned, is our 10th consecutive quarter above 125,000. The Business Markets Group had its best phone net add performance in the last two years, demonstrating how our value proposition is resonating with small and medium businesses. Similar to Consumer, we are taking pricing actions in the first quarter in Business that could result in elevated phone churn in the period. However, we are confident that we will continue to deliver strong business volumes in 2024.

Moving on to broadband, we delivered 413,000 net additions in the quarter continuing the pace of over 400,000 broadband net adds for the fifth consecutive quarter. We see strong demand for both our fiber and fixed wireless offerings, and we continue to see positive responses from customers regarding the quality and reliability of our services. In fixed wireless, we delivered 375,000 net adds for the quarter, growing the base to over 3 million subscribers. We launched C-Band in early 2022, and our fixed wireless success in the last two years reflects the strong demand for high-quality broadband and the strength and reliability of our product. Notably, in the fourth quarter, over 80% of our consumer fixed wireless gross adds came from C-Band markets.

The growth trajectory for fixed wireless continues to be robust and we are ahead of schedule to achieve our 4 million to 5 million subscriber goal by year-end 2025. Fios Internet net adds were 55,000, down 4,000 year-over-year. We are pleased with the success of Fios with strong gross adds and retention, reflecting the quality and overall value of the product. We expect broadband subscriber momentum to extend into 2024 as we continue deployment of our C-Band spectrum, further expand our Fios footprint and bring new products and offers to the market. Let’s now look at our financials. Consolidated revenue for the fourth quarter was $35.1 billion, down 0.3% year-over-year. This change can be attributed to the wireless equipment revenue, which was approximately 2% lower than the prior year as total postpaid upgrades declined by approximately 18%.

Total wireless service revenue was $19.4 billion, up 3.2% year-over-year. Strong revenue benefited from targeted pricing actions, more customers selecting premium unlimited plans and growth in fixed wireless access. This was partially offset by pressure from prepaid, which reduced total wireless service revenue growth by approximately 70 basis points year-over-year as well as promo amortization. Consolidated adjusted EBITDA in the quarter was $11.7 billion, a decrease of 0.6% compared to the prior year. Higher wireless service revenue and the benefits of lower upgrades were more than offset by higher marketing and bad debt expense and ongoing declines in Business wireline revenue. Adjusted EBITDA margin of 33.2% was relatively flat year-over-year.

In 2023, we implemented transformations within our Consumer customer care group as well as Business managed services. We are pleased with what we have achieved this year and our cost saving measures are meeting our expectations. We expect further progress on our cost efficiency program in 2024. Adjusted EPS was $1.08 in the quarter, resulting in full year adjusted EPS of $4.71. Turning to our cash flow summary, cash flow from operating activities for the fourth quarter was $8.7 billion, bringing the total for 2023 to $37.5 billion. This marks a year-over-year improvement of over $300 million, primarily due to working capital improvements. CapEx for the quarter came in at $4.6 billion compared to $7.3 billion in the prior year. The full year CapEx totaled $18.8 billion, which represents a more than $4 billion reduction in capital spending from 2022 as we come down from our peak C-Band spending level.

Free cash flow for the fourth quarter was $4.1 billion, bringing our year-to-date total to $18.7 billion, a $4.7 billion increase over the prior year, driven by operational improvements and the lower CapEx spending that we previously noted. We are pleased to have delivered on our guidance of more than $18 billion of free cash flow for the full year, which reflects our balanced and strategic approach to delivering profitable growth. Net unsecured debt at the end of the quarter was $126.4 billion, a $1.6 billion improvement year-over-year. Net unsecured debt increased sequentially primarily due to settling the $3.7 billion in incentive payments to satellite operators for our remaining C-Band spectrum. Our net unsecured debt to consolidated adjusted EBITDA ratio was 2.6 times as of the end of the fourth quarter, in-line with the prior two quarters.

We expect deleveraging of the balance sheet to accelerate in 2024 as CapEx comes down to BAU levels and we continue to generate strong cash flow. Additionally, we continue to benefit from our approach to managing long-term debt and have only $3.6 billion of unsecured debt maturing in 2024. Overall, I’m pleased with our momentum exiting the year and our performance in 2023, delivering an improved operational profile while also meeting our financial guidance. Now, I want to take a few moments to look ahead and walk through our 2024 guidance. Our 2024 guidance demonstrates our expectations for accelerating wireless service revenue growth. As a reminder, the reported 2023 wireless service revenue growth of 3.2% included approximately 190 basis points of benefit from a reallocation of other revenues.

Excluding this reallocation, the 2023 wireless service revenue growth was 1.3%. For 2024, we expect total wireless service revenue to grow between 2% and 3.5%. This will be driven by anticipated positive postpaid phone net additions in both Consumer and Business, continued fixed wireless access subscriber growth, further adoption of premium unlimited plans, growth in products and services, and pricing action benefits. We expect consolidated adjusted EBITDA to grow by 1% to 3% versus the prior year. This outlook reflects expected higher wireless service revenue and the impact of our cost transformation initiatives, partially offset by continued pressure in Business wireline revenues and increased wireless network operating expenses. Full year adjusted earnings per share is expected to be $4.50 to $4.70.

As noted, we expected adjusted EBITDA to grow in 2024, offset by certain below-the-line impacts. Specifically, higher interest expense is expected to impact adjusted EPS by $0.16 to $0.19, over 75% of which is driven by the continued reduction in capitalized interest related to the C-Band licenses being placed into service. In addition, EPS is expected to be impacted by approximately $0.07 to $0.09 of higher pension and OPEB expense, primarily due to the expiration of certain credits. This impact will flow through the other income and expense line on our income statement. We expect depreciation and amortization to be relatively flat in 2024 compared to 2023. Our adjusted effective income tax rate is expected to be in the range of 22.5% to 24% based on current legislation.

As discussed in prior quarters, capital spending for the full year is expected to be between $17 billion and $17.5 billion, down from $18.8 billion in 2023. While we are not providing guidance on 2024 free cash flow, we wanted to provide some additional color to aid with your analysis. Tailwinds to free cash flow will come from our adjusted EBITDA growth outlook as well as the expected $1.5 billion reduction in CapEx in 2024 based on the midpoint of our guided CapEx range. Offsets will be higher interest expense and higher cash taxes. As a reminder, the majority of the higher interest expense relates to reductions in capitalized interest. Such interest was recognized in cash flow from investing prior to placing the C-Band spectrum into service.

The higher cash taxes are primarily related to the continued phaseout of bonus depreciation in 2024 based on current legislation. Overall, we expect a strong free cash flow profile that will support our capital allocation priorities and position us for meaningful unsecured debt reduction in 2024, which we expect to come in the latter half of the year. With that, I will now turn the call back over to Hans for his closing thoughts.

Hans Vestberg: Thank you, Tony. As you heard today, we’re confident and well positioned to deliver a solid 2024. Thanks to our best-in-class network, which is only getting better, we offer the mobile and broadband services that customer value and need the most. Our industry is critical to the next wave of innovation, and Verizon is ready to capitalize on the opportunity of the AI economy to bring this technology to life for all our stakeholders. As I said in the beginning, we have the right team in place to execute the next chapter in Verizon’s history. I’m proud of the work our team accomplished in 2023 and excited what we will deliver in 2024. Our results in C-Band markets speaks for themselves and support our investment decisions, and we’re going to lean in further as we expand into suburban and rural markets while maintaining the financial discipline you come to expect from us.

We will continue to stay very close to our customers to understand their needs and preferences, so that we can offer the right promotions at the right times in the right markets. We have the right people, the right assets and the right strategy. Our focus for 2024 is on execution. It’s a winning combination, and we are very confident heading into this year. Finally, I want to remind you that we are hosting an investor event on February 5 and encourage everyone to tune in to the webcast. Given the financial update today, next month will be more of an operational and strategic update on the company. Now, Brady, we’re ready to take questions.

Brady Connor: Thanks, Hans. Brad, we’re ready for the first question.

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Q&A Session

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question will come from John Hodulik of UBS. Your line is open, sir.

John Hodulik: Hey, thanks. Good morning, guys. I’d love to drill down on the couple of things. Firstly, the sub trends, 17% growth is some real momentum. I know, Hans, you talked about a number of sort of potential drivers, but if there’s anything you could sort of be specific and sort of talk about what drove that in the quarter and is that likely to continue? Also, the account growth, is that likely to continue? And then, you talked about some churn on the price increase. Anything you could say about sort of the net add momentum as we look into ’24? That’s first. And maybe for Tony, nice service revenue growth. Any additional info you can kind of give us to sort of unpack that in terms of the price increase impact versus last year and what you’re seeing in terms of tier, that would be great. Thanks.

Hans Vestberg: Hey, John, thank you for the question. So, let me start about the subs then. On the Business side, 10th quarter in a row, more than 125,000. Kyle and his team is doing a great job. We are — our network is performing so well, so our customers just continue to buy in with us. Not only that, our offerings in our go-to-market is as strong as ever. So, we feel really good about what Kyle and his team is doing. On the Consumer side, yeah, we had a good fourth quarter, but you have seen also through the year that we have sequentially improved all the time. Everything started where we started with a new offering, myPlan, which resonates with the market, very much consumer insights in it. Then on top of that, Sampath has done a lot of changes in our structure, all the way from the go-to-market, the incentives in our stores and our decentralization of it.

So, it hangs together all the way. So, I think the most important, we have the right offerings in the market and that has really resonated on the Consumer side. So, I’m really happy with the team. We will continue to execute on the plan we have and we have started.

Tony Skiadas: Hey, John, it’s Tony. Good morning. So, just to add on to what Hans mentioned, we did really well in Tier 1 markets. As we mentioned in the prepared remarks, about 8 percentage points better, and we were also net add positive in both Tier 2 and Tier 3 markets as well. We improved our competitive positioning against all providers. We continue to build out C-Band as we said earlier and — in suburban and rural markets and we see further opportunity there. And as Hans mentioned, we have strong momentum in the VBG side as well on both mobility and FWA. So, good results. And then, on your question on service revenue, so we feel really good about the shape of service revenue in 2024. The guidance that we gave of 2% to 3.5% reflects accelerated growth, and we talked about the jump off point of 1.3% in the prepared remarks.

The midpoint of our guidance range implies over $2 billion of service revenue growth. If we think about the assumptions in the guide, in terms of tailwinds, as you know, we’ve executed a number of pricing actions, both in the back half of 2023 that do carry into 2024, as well as in recent weeks, we’ve taken further pricing actions in both Consumer and Business that will provide a tailwind. We also have an improving volume profile in our Consumer business. As we said in the prepared remarks, we expect to have positive phone net adds in Consumer in 2024 and stable Business volumes as well. And then, the third tailwind I’d point to is an increasing contribution from fixed wireless access. We have really good momentum and over 3 million subs in the base.

In terms of headwinds, prepaid has been a drag on service revenue both in the fourth quarter and the full year. It was about $142 million in the fourth quarter, and we expect the prepaid headwinds continue into 2024 as we stabilize that business. And then on promo amortization, that continues to be a headwind with the increase in 2024 similar to the increase we experienced in 2023. But when you put that all together, we like the trajectory of service revenue.

John Hodulik: That’s great detail. Thanks, guys.

Brady Connor: Yes, Brad, we’re ready for the next question.

Operator: The next question comes from Simon Flannery of Morgan Stanley. Your line is open.

Simon Flannery: Great. Thank you very much. Good morning. Just following up there on the fixed wireless, could you just give us a little bit of color around how the churn is performing? What are you seeing in terms of those cohorts that have had the service for some time? And any comments on sort of capacity and so forth? And also, are you seeing emerging seasonality in this product driven by strong back-to-school in Q3 and then maybe a little bit softer in Q4? And then, anything you can — color you can provide on your exposure to ACP and how that may affect you and your latest thoughts on the BEAD program? Thank you.

Hans Vestberg: Okay. Thank you. On the fixed wireless access, I think the product is maturing. We’re now past 3 million subs, both on the Business side and Consumer together. Clearly, the rollout and the product is unique. It has — it resonates so good in the market, the simplicity of the product and installing it, which was our idea. And even if we took out the discount that we had in the third quarter, we haven’t seen any slowdown. The product is resonating so well. We are constantly improving it. The NPS is really high on the product. And as I said so many times before, for us is to keep the same volume right now because that we are dimensioning our capacity, our capital in the best way, it’s the most efficient way. So, we will continue to be in these levels, and we think they’re very important.

And topping that, of course, that — our consumers using fixed wireless access that they are using the network as anybody else. And as I said before, we have dimensioned the network to handle it, so that’s not the challenge. And the most important for us is that we have fiberized all our network, and so we can transport all the data. The guys are doing great job on fixed wireless access across the board.