Sebastiano Petti

Sebastiano Petti asked about the late Q1 mobile launch, whether convergence is becoming a core strategy for Cable One given competitive pressures, and the trend of 15% of the footprint facing two gig-capable wired competitors.

Answer

CEO Jamesl Holanda affirmed mobile as integral to Cable One's strategy, citing its proven value by larger peers and its role in enhancing the broadband relationship and broader digital transformation. CFO Todd Koetje confirmed the late Q1 launch target, noting the pilot focused on operational readiness. Regarding the 15% footprint with two gig-capable wired competitors, Todd explained this arises when an overbuilder competes against DSL and Cable One, and then the incumbent LEC upgrades DSL, resulting in three wired gig-capable providers. This figure has increased from high single digits a couple of years ago.

Sebastiano Petti from JPMorgan Chase & Co. asked about the late Q1 mobile launch, whether convergence is becoming a more integral part of Cable One's strategy given increased fiber overlap, and the evolution of markets facing two gig-capable competitors.

Answer

CEO James Holanda affirmed mobile's integral role, citing Comcast and Charter's success, and emphasized its value in enhancing broadband relationships and customer experience. CFO Todd Koetje confirmed the Q1 target for a company-wide mobile launch, following a successful pilot focused on operational readiness. He also noted that the percentage of passings facing two gig-capable wired competitors has slightly increased from high single digits to 15% over the past few years.

Sebastiano Petti of JPMorgan Chase & Co. inquired about the new mobile service pilot, asking if the move was a competitive response to telco convergence and what the potential go-to-market strategy might entail, such as offering free lines similar to cable peers.

Answer

CEO & President Julie Laulis explained that the decision to pilot mobile service was driven by a combination of factors, including improved wholesale economics, better mobile network reliability in their markets, and the maturity of enablement platforms, rather than being solely a competitive reaction. She stated that the company views convergence through a lens of profitability and enhancing the core broadband product. Regarding the go-to-market strategy, Laulis noted they expect to launch in pilot markets by year-end and will test various approaches to learn what works best.

Sebastiano Petti requested details on the 'unusual churn event' in Q1 and asked for the basis of management's confidence in returning to broadband revenue growth, given the quarter's subscriber and ARPU declines.

Answer

CEO Julia Laulis explained the Q1 churn was impacted by several small, nonrecurring events, including billing migration activities, the shutdown of unprofitable fixed wireless towers, and weather-related issues. She expressed confidence in future growth due to a disciplined strategic plan, successful trials of new products like FlexConnect and Lift, data from effective acquisition campaigns, a revamped new build process, and strong uptake of ancillary products like SecurePlus.

Sebastiano Petti asked if Cable One needs to adopt a mobile strategy to drive gross additions in a converging market, similar to larger peers, and followed up by asking if ARPU could remain stable in 2025 while pursuing subscriber growth.

Answer

CEO Julia Laulis stated that unlike peers, Cable One would have grown broadband units without the ACP wind-down and does not currently believe a mobile offering is necessary for growth. She emphasized the focus on organic growth through new tools and teams. CFO Todd Koetje added that their low churn makes a potentially low-margin mobile product less critical, and focusing on the core data product is more accretive. Regarding 2025 ARPU, Laulis indicated a balanced approach, using various levers to achieve overall broadband revenue growth rather than committing to stable ARPU.

Sebastiano Petti inquired about the operational and financial impact of the billing system conversion freeze, the potential for the new pay-as-you-go pilot to be dilutive to ARPU, and Cable One's broader strategic position as a potential consolidator versus an acquisition target.

Answer

President and CEO Julia Laulis clarified that the billing system freeze was a temporary operational necessity that limited marketing flexibility for about 20% of customers but had no other major impact. She stated that the pay-as-you-go pilot is not currently ARPU dilutive, as early adopters have an average ARPU higher than the entry-level price. Regarding strategy, Laulis affirmed that Cable One's expertise in its specific market types makes it a natural aggregator, though the future remains dynamic.

Sebastiano Petti with JPMorgan Chase & Co. asked about the expected shaping of TDS Telecom's 200,000-250,000 in-year fiber service delivery for 2026, considering Q4 2025's strong performance and past weather implications. He also sought an update on Array Digital Infrastructure's C-band spectrum monetization strategy, including market conversations and the potential impact of upcoming spectrum auctions. Finally, Petti questioned TDS's share repurchase strategy, specifically if the company would consider buying Array Digital shares given the implied look-through discount. He also asked if TDS Telecom's implied EBITDA guidance for 2026 suggests growth when excluding divestitures.

Answer

Ken Dixon, President and CEO of TDS Telecom, expressed confidence in 2026 fiber goals due to stable, record-high crew counts maintained through winter, strategic investments in internal construction capacity, and a healthy funnel of service addresses. Anthony Carlson, President and CEO of Array Digital Infrastructure, reiterated the attractiveness of C-band spectrum, its immediate deployability, and the potential for multiple acquirers, emphasizing that Array is not a forced seller. Vicki Villacrez, EVP and CFO of TDS and Array, stated that each company's board determines its capital allocation, and Array is focused on standing up its new tower business. Walter Carlson, President and CEO of TDS and Array, declined further comment on share buybacks. Kris Bothfeld, VP of Financial Analysis and Strategic Planning for TDS Telecom, confirmed that beyond the impact of divestitures and legacy revenue declines, the 2026 Adjusted EBITDA guidance implies growth driven by fiber investments and business transformation efforts.

Sebastiano Petti asked about the expected quarterly shaping of TDS Telecom's 2026 fiber service delivery, given the strong Q4 2025 performance. He also sought an update on Array's C-band spectrum monetization strategy, including market conversations and the impact of upcoming spectrum auctions. Additionally, he questioned whether TDS would consider buying back Array Digital shares instead of its own TDS shares, and if the implied TDS Telecom EBITDA guidance for 2026 suggests growth excluding divestitures.

Answer

Ken Dixon, President and CEO of TDS Telecom, emphasized execution, stable crew counts from Q4 2025 into Q1 2026, and strategic investments in internal construction capacity for consistent 2026 fiber delivery. Walter Carlson, President and CEO of TDS and Array, and Anthony Carlson, President and CEO of Array Digital Infrastructure, reiterated the attractiveness and value of Array's C-band spectrum, noting it's deployable immediately and they are not forced sellers. Vicki Villacrez, EVP and CFO of TDS and Array, stated that each company's board determines its capital allocation. Kris Bothfeld, VP of Financial Analysis and Strategic Planning, confirmed that TDS Telecom's 2026 adjusted EBITDA guidance implies growth when excluding divestitures and legacy revenue declines, driven by fiber investments and transformation efforts.

Sebastiano Petti asked about the expected trajectory for fiber broadband net additions, the competitive landscape in expansion markets, and how the upcoming pipeline of spectrum from various sources might influence Array's monetization strategy for its remaining C-band assets.

Answer

Kristina Bothfeld, VP of Finance & CFO at TDS Telecommunications, stated that the company still targets year-over-year improvement in fiber net additions, which are expected to accelerate in the second half of the year along with address delivery. She also noted that the competitive landscape in expansion markets remains favorable. Douglas Chambers, Interim President & CEO of Array, explained that because Array's C-band spectrum is highly desirable and has build deadlines not until 2029, the company has the flexibility to be opportunistic in its monetization strategy to maximize value amidst changing market supply.

Sebastiano Petti from JPMorgan Chase & Co. inquired about the long-term nature of TDS Telecom's increased sales and marketing costs and whether potential FCC spectrum cap changes are influencing UScellular's C-band monetization strategy.

Answer

An executive from TDS Telecom explained that while near-term investments in sales, construction, and transformation are pressuring 2025 adjusted EBITDA, they are designed to drive future growth. Laurent Therivel, CEO of UScellular, stated that potential FCC spectrum cap changes are not the primary driver for monetizing their remaining C-band assets; the key factor is receiving a fair value offer that is above book and market value.

Sebastiano Petti asked about the in-year shaping of TDS Telecom's fiber service delivery for 2026, updated thoughts on C-band spectrum monetization, and the board's view on potentially buying back Array Digital Infrastructure (AD) shares versus TDS shares. He also questioned if TDS Telecom's implied 2026 EBITDA guidance suggests growth excluding divestitures.

Answer

Ken Dixon (President and CEO, TDS Telecom) expressed confidence in 2026 fiber goals due to stable crew counts and strategic investments in internal construction capacity. Anthony Carlson (President and CEO, Array Digital Infrastructure) reiterated the attractiveness of C-band spectrum for 5G and its established ecosystem, noting that Array is not a forced seller. Vicki Villacrez (EVP and CFO, TDS) stated that each board determines capital allocation and Array is focused on growing its new tower business, declining to comment on specific AD share buybacks. Walter C. D. Carlson (Chairman of the Board, TDS) reinforced that share buyback decisions are for each board. Chris Bothfelt (VP of Financial Analysis and Strategic Planning, TDS) confirmed that TDS Telecom's 2026 Adjusted EBITDA guidance implies growth when excluding divestitures and legacy revenue declines, driven by fiber investments and business transformation.

Sebastiano Petti from JPMorgan Chase & Co. inquired about the expected shaping of TDS Telecom's 200,000-250,000 in-year fiber service delivery for 2026, considering seasonal weather impacts. He also asked for an update on Array Digital's C-band spectrum monetization strategy, including market conversations and the influence of upcoming spectrum auctions. Furthermore, he questioned whether TDS would consider buying back Array Digital shares instead of its own TDS shares, given the implied look-through discount. Lastly, he asked if TDS Telecom's implied 2026 EBITDA guidance suggests growth when excluding divestitures.

Answer

Ken Dixon, President and CEO of TDS Telecom, expressed confidence in 2026 fiber goals due to stable, high crew counts maintained through winter and strategic investments in internal construction capacity. Anthony Carlson, President and CEO of Array Digital Infrastructure, reiterated the attractiveness of C-band spectrum for 5G, its established ecosystem, and potential buyers beyond the big three carriers, noting that the availability of other spectrum could positively affect demand. Vicki Villacrez, EVP and CFO of TDS, stated that each company's board determines capital allocation, and Array Digital is focused on standing up its new tower business. Walter C. D. Carlson, Chairman of the Board, TDS, reiterated that share buyback decisions are for each board. Chris Bothfelt, VP of Financial Analysis and Strategic Planning of TDS, confirmed that TDS Telecom's 2026 Adjusted EBITDA guidance implies growth when accounting for divestitures and legacy revenue declines, driven by fiber investments and transformation efforts.

Sebastiano Petti asked for an update on the installed but not yet billed balance for the Wavelengths business, comparing it to the third quarter. He also inquired about the progress of discussions for other data centers following the termination of a previous LOI, and whether any cash proceeds from asset sales are factored into the upcoming $750 million secured debt refinancing plans.

Answer

CEO Dave Schaeffer reported that the installed but not yet billed Wavelengths balance remained comparable to the third quarter, despite an improvement in unit installations. Regarding data centers, he clarified that backup offers for the previously discussed facilities also cover other assets, and Cogent Communications prefers an all-cash purchase over owner financing. Schaeffer stated that the company's $750 million secured debt refinancing plan does not assume proceeds from data center sales, though such proceeds would enhance overall financial flexibility.

Sebastiano Petti inquired about the installed but not yet billed balance for the Waves business in the quarter and the progress on monetizing other data centers, specifically if cash proceeds from asset sales are factored into debt refinancing plans.

Answer

CEO Dave Schaeffer noted that the installed but not yet billed Waves base was comparable to the previous quarter, indicating progress in eating into the backlog while building new. He clarified that the previous LOI for data centers was terminated due to financing terms, and new negotiations are underway. CFO Tad Weed explained that while data center sales are taxable events, existing NOLs and bonus depreciation are expected to offset any gains, preventing net income taxes. Dave added that proceeds from data center sales are not assumed in the upcoming debt refinancing plans.

Sebastiano Petti asked about the investment required for the wavelength business, the expected pace of installations, and the timeline for improving provisioning times from the current 30 days.

Answer

CEO David Schaeffer stated that wavelength provisioning times have improved dramatically to 30 days, with a goal of reaching two weeks. He anticipates ramping up to 500 installs per month after grooming the existing backlog. Schaeffer noted that major CapEx for the wave footprint is complete, with elevated near-term spending focused on data center conversions, not wave expansion. Sales force investment is centered on training rather than extraordinary expense.

Sebastiano Petti sought clarification on the non-recurring product revenue contributing to Q4 EBITDA strength, specifically if it had a low margin contribution. He also asked about the book-to-bill timing for Lightpath's total contract value and the concentration of competitive intensity across Optimum's operating footprint.

Answer

CFO Marc Sirota clarified that the 'one-time' revenue was from Lightpath's hyperscaler activity, which is expected to continue as networks are built and contracts scale, contributing to ongoing growth. He declined to provide specific contract details due to confidentiality but expressed optimism about Lightpath's pipeline. Chairman and CEO Dennis Mathew described the competitive landscape as consistent, with 70% fiber overbuild and 85% fixed wireless in the East, and 50% fiber and 80% fixed wireless in the West, emphasizing Optimum's strong product, pricing, and network position for competition.

Sebastiano Petti sought clarification on the non-recurring revenue contribution to Q4 EBITDA, the timing and phasing of Lightpath's total contract value, and the concentration of competitive intensity across Optimum's operating footprint.

Answer

CFO Marc Sirota clarified that the 'non-recurring' revenue was related to Lightpath's hyperscaler activity, which involves recognizing revenue as networks are built, and expressed optimism for continued growth in this segment. He declined to provide specifics on individual contract terms. Chairman and CEO Dennis Mathew stated that competitive intensity remains consistent across the East (70% fiber overbuilt, 85% fixed wireless) and West (50% fiber overlap, 80% fixed wireless), emphasizing Optimum's strong product and network positioning.

Sebastiano Petti inquired about Viasat's 'tower model' for direct-to-device (D2D) and the confidence in multiple D2D players emerging without specific spectrum, as well as the company's considerations for its L-band spectrum ownership, balancing franchise value growth with the current high demand for satellite spectrum.

Answer

Mark Dankberg, Chairman and CEO, explained that multiple D2D players are likely due to existing mobile satellite service spectrum, national security/sovereignty requirements, and L-band's weather resilience. He emphasized that high power levels for D2D require coordination with other operators and adherence to 3GPP standards. Mr. Dankberg stated that Viasat's L-band strategy, including the Equatys venture, aligns with financial objectives of increasing cash flow, reducing debt, and wise investment, viewing spectrum ownership as crucial for controlling destiny and maintaining long-term option value.

Sebastiano Petti from JPMorgan Chase & Co. asked for elaboration on Viasat's direct-to-device (D2D) tower model, questioning the confidence in multiple D2D players emerging given spectrum availability, and how the sovereign angle might influence this. He also inquired about the strategic considerations for Viasat's L-band spectrum and the Equatys venture, specifically whether the focus is on controlling its own destiny and maintaining long-term option value, especially given the current high interest in satellite spectrum.

Answer

Mark Dankberg, Chairman and CEO of Viasat, explained that significant satellite spectrum has been allocated for mobile satellite services for decades, serving valuable functions. He noted that national security and sovereignty concerns often lead countries to require operators to comply with national telecommunications laws, supporting the emergence of multiple players. Dankberg clarified that the potential for communicating with off-the-shelf cell phones relies on increased power levels for mobile satellite service, which necessitates careful coordination to avoid interference with neighboring frequencies and operators. He stated that Viasat's network design adheres to 3GPP standards and avoids interference, leveraging its suitable spectrum and understanding of these issues.

Sebastiano Petti followed up on Viasat's global spectrum portfolio, asking for clarification on the 100 megahertz of harmonized MSS spectrum mentioned in the Space42 announcement. He also inquired about the anticipated milestones for the Equitus Space42 project, including future partnerships with MVNOs and additional investors, given the targeted service launch within three years. Finally, Petti asked about metrics beyond traditional book-to-bill ratios that Viasat uses to demonstrate its ability to monetize its growing backlog, particularly in communication services.

Answer

Chairman and CEO Mark Dankberg clarified that the 100 megahertz figure refers to the combined spectrum holdings of Viasat and Space42. For the Equitus Space42 project, Dankberg indicated that the detailed transactions for additional customers, investors, and MNOs are being finalized over the next couple of quarters and years, emphasizing the complexity of defining specifics for each constituent. CFO Gary Chase, addressing backlog monetization, stated that the company focuses on achieving specific business outcomes such as continued growth in aviation and government SATCOM, stabilization and growth in maritime, and leveraging Flight 2 capacity for fixed broadband, rather than specific backlog recognition metrics. He noted that the backlog underpins future growth, and capacity is becoming available.

Sebastiano Petti followed up on the Equatys Space42 announcement, seeking clarification on the 100 MHz harmonized MSS spectrum and anticipated milestones for partnerships with MVNOs and additional investors, as well as the timeline for service launch. He also asked for insights into backlog growth, the cadence of backlog recognition, and other metrics beyond book-to-bill ratios for monetizing the growing backlog.

Answer

Mark Dankberg, Chairman and CEO, clarified that the 100 MHz refers to the combined spectrum of Viasat and Space42. He indicated that further details on Equatys partnerships and transactions for customers, investors, and MNOs would emerge over the next couple of quarters and years. Gary Chase, CFO, addressed backlog, stating that the focus is on turning current efforts into future growth, particularly in Aviation, Government Satcom, and Maritime, with capacity from Flight 2 addressing Fixed Broadband declines, rather than specific backlog monetization metrics.

Sebastiano Petti followed up on the direct-to-device (D2D) strategy, asking why a shared infrastructure model would be advantageous against standalone LEO constellations, and requested an update on the Ligado bankruptcy court approval timeline.

Answer

CEO & Chairman Mark Dankberg explained that D2D capacity is more efficiently increased by aggregating spectrum, which a shared model enables, rather than by increasing power, which is capital-intensive. This approach is more economical and mitigates interference. Regarding Ligado, he confirmed that the timeline is dependent on the court and that slippage is possible, with an update to follow the court's decision.

Sebastiano Petti of JPMorgan Chase & Co. inquired about the status of the strategic review for the Defense and Advanced Technologies segment, the confidence in the ViaSat-3 F2 launch timeline, and whether softer EBITDA guidance was due to increased ground network costs.

Answer

Chairman and CEO Mark Dankberg stated the strategic review for the defense business is ongoing and that the company is still on track to ship the ViaSat-3 F2 satellite this summer, with the updated in-service date reflecting post-delivery uncertainties but not materially impacting the financial outlook. Chief Financial Officer Garrett Chase clarified that the ground network costs were previously disclosed and are not the driver for the updated EBITDA guidance.

Sebastiano Petti of JPMorgan Chase & Co. asked about the broader ecosystem impact of United Airlines' partnership with Starlink and the feasibility of Viasat deploying a hybrid LEO-GEO solution for in-flight connectivity, similar to its maritime offering.

Answer

Chairman and CEO Mark Dankberg responded that for airlines, the primary focus has shifted from simply offering free service to monetization and differentiation, which Viasat supports with software and integration. He confirmed that a hybrid LEO-GEO solution is Viasat's strategy for aviation, as it combines LEO's low latency with GEO's superior capacity in high-demand areas like airports, creating a better overall passenger experience.

Sebastiano Petti asked if Ziply Fiber's strategy has changed given the U.S. competitive environment, where scaled fibre operators focus on penetration and cable operators on churn reduction. He also sought an update on BCE's non-core asset sales for balance sheet optimization in 2026.

Answer

Mirko Bibic, President and CEO, BCE, confirmed that Ziply's strategy and execution remain unchanged, with penetration ramping as expected and pricing typically below cable. He explained a deliberate strategic reset for Ziply's build plan to expand beyond its ILEC footprint into higher-growth markets, leading to a near-term slowdown in passings but a ramp-up in H2 2026 and beyond. Curtis Millen, CFO, BCE, stated that asset sales are underway and will play a role in reaching the 3.5x net leverage target by 2027, with more transparency provided upon agreements.

Sebastiano Petti from JPMorgan Chase & Co. asked if Ziply Fiber's strategy in the U.S. had changed given the competitive environment, where scaled fiber operators focus on penetration and muted ARPU growth, and cable operators prioritize churn reduction over price increases. He also sought an update on BCE's non-core asset sales for balance sheet optimization in 2026.

Answer

President and CEO Mirko Bibic stated that Ziply's strategy and execution remain unchanged, with penetration ramping as expected and pricing typically below cable. He explained a strategic reset post-acquisition to expand Ziply's fiber build broader, resulting in a near-term slowdown in passings before a significant ramp in H2 2026 and beyond to reach 3 million locations by 2028. CFO Curtis Millen confirmed ongoing focus on capital allocation and balance sheet strengthening, with asset sales playing a role in achieving the 3.5x net leverage target by 2027, and updates to be provided as agreements are reached.

Sebastiano Petti sought an update on the $1.5 billion cost savings target, its shaping, and whether it's a run-rate exiting 2028. He also asked about the shaping of consolidated EBITDA growth over the forecast period, considering potential margin compression from Ziply and PSP ramp-up.

Answer

CFO Curtis Millen stated they are halfway through the $1.5 billion cost savings, which will accelerate and lead to relatively flat EBITDA margins overall, but increasing EBITDA dollars. He explained that cost focus allows absorption of U.S. subscriber growth and funding of AI-powered solutions, with Ziply's margins remaining healthy.

Sebastiano Petti from JPMorgan asked if BCE's strategy for U.S. fiber growth had shifted regarding organic build versus M&A, and inquired about the potential for offering a converged mobile and internet service in the Zipline footprint.

Answer

President & CEO Mirko Bibic stated the immediate focus is executing the build plan with Zipline and the PSP partnership, but they remain open to accretive M&A to reach their 8 million passings goal. On convergence, he emphasized that customers prioritize superior broadband, which Zipline provides, but BCE will be ready to offer a bundled service when the time is right.

Sebastiano Petti asked about BCE's strategy for the U.S. fiber market, questioning the balance between organic growth and M&A, and the potential for a converged mobile offering. He also requested a quantification of enterprise service revenue.

Answer

President & CEO Mirko Bibic stated the immediate focus is on the organic build-out with Zipline and the PSP partnership, though they remain open to accretive M&A. He noted that while a bundled mobile service is a future possibility, Zipline is performing strongly without it. EVP & CFO Curtis Millen added that the Bell Business Markets (BBM) segment is experiencing low double-digit revenue growth.

Sebastiano Petti of JPMorgan Chase & Co. asked for clarification on the deleveraging math, the rationale for the specific $1.75 dividend level, and the company's confidence in the U.S. greenfield fiber opportunity.

Answer

CEO Mirko Bibic stated the $1.75 dividend level was chosen by the Board to provide flexibility for deleveraging, growth investment, and shareholder returns. He expressed confidence in the U.S. fiber plan due to extensive due diligence and the partnership structure. CFO Curtis Millen clarified that net proceeds from the MLSE sale are part of the sources and uses for the Ziply acquisition, impacting the leverage calculation.

Sebastiano Petti asked about the impact of the macroeconomic outlook on enterprise spending and advertiser behavior. He also questioned the U.S. fiber strategy, asking if BCE sees a future need to partner with a wireless operator or launch an MVNO to compete against converged offerings.

Answer

Mirko Bibic, President and CEO, explained that the U.S. market structure differs from Canada's, as Ziply Fiber primarily competes with a single cable operator in its footprint, not integrated providers, making a wireless partnership not an immediate necessity. Regarding the macro environment, he highlighted continued strength in Internet net adds, multiproduct bundling, and premium wireless subscriber growth as key drivers, while noting that recent market price increases need to be sustained.

Sebastiano Petti asked for an update on the run-rate of the $150-$200 million cost savings program and questioned how the company is evaluating the prepaid versus postpaid wireless mix, given the strong prepaid results and the focus on attracting newcomers to Canada.

Answer

CFO Curtis Millen stated that while they don't report quarterly progress on the savings, they expect to reach the full run-rate benefit by the end of Q4. CEO Mirko Bibic explained that strong prepaid growth is aligned with their premium postpaid strategy, as it establishes prepaid as the proper entry point for price-sensitive customers, who can then be migrated to higher-value postpaid plans over time.

Sebastiano Petti inquired about the 2028 business revenue growth guidance, questioning why there isn't an upside given the larger PCF total addressable market and accelerating NaaS adoption, and asked for insights into revenue shaping.

Answer

Kate Johnson, CEO, emphasized the conservative approach due to the time required for structural change in critical infrastructure and the market's ability to absorb it, likening it to the cloud transformation. Chris Stansbury, CFO, added that while the additional $2.5 billion in PCF deals helps, it takes three years for routes to build. He noted that the digital side, including NaaS, presents a significant opportunity, and while current projections are linear, there's potential for a J-curve adoption, but the company is providing a 'middle-of-the-fairway' estimate.

Sebastiano Petti inquired about the 2028 business revenue growth guidance, questioning why there isn't an upward revision given the increased PCF total addressable market and accelerating NaaS digital adoption metrics, relative to previous expectations for NaaS and PCF contributions.

Answer

Kate Johnson, CEO, emphasized the time required for structural change in critical infrastructure and the market's cautious absorption of such changes, noting that Lumen is being conservatively optimistic. Chris Stansbury, CFO, acknowledged the additional $2.5 billion in PCF deals would help but noted the three-year build-out time. He indicated that while there might be some revenue impact and potential pull-forward of growth inflection, the company's digital adoption projections are currently linear, with potential for overachievement as a J-curve adoption materializes.

Sebastiano Petti inquired about the increased 2025 cost savings target, its potential impact on 2026 EBITDA, whether the RDOF giveback was included in original guidance, and the drivers behind the declining tax benefits from the reconciliation bill.

Answer

EVP & CFO Chris Stansbury clarified that the RDOF giveback was not in the original guidance. He explained that future tax benefits will decline for positive reasons: lower CapEx post-divestiture and reduced interest expense from deleveraging. He maintained the 2026 EBITDA inflection outlook but noted the strong 2025 performance makes calling the exact timing more difficult.

Sebastiano Petti requested more detail on the top-line revenue dynamics influencing the 2025 EBITDA outlook, particularly regarding public sector performance and the timeline for AI-related network fabric revenue to drive overall business growth.

Answer

CFO Christopher Stansbury clarified that while Lumen does not provide specific revenue guidance, 2025 trends are expected to be similar to 2024, influenced by planned service disconnects. He anticipates improvement in 2026 as PCF revenue begins to ramp, projecting overall revenue growth in the 2028-2029 timeframe based on current product growth rates. He noted that public sector growth in 2025 is difficult to predict due to the first-half disconnects.

Sebastiano Petti of JPMorgan Chase & Co. inquired if the incremental PCF announcement follows a similar timeline and structure as the previous deals and asked for clarification on the drivers for the expected sequential EBITDA acceleration in Q4 2024.

Answer

EVP and CFO Chris Stansbury confirmed the incremental PCF deals are very similar in structure, margins, and cash flow timing to the initial $5 billion. Regarding EBITDA, Stansbury explained the expected Q4 improvement is due to typical seasonality, such as lower summer construction and energy costs, as well as intentional investments made in Q3 to accelerate the company's $1 billion cost-out program.

Sebastiano Petti (JPMorgan Chase & Co.) sought clarification on whether AT&T's year-end leverage target assumes cash inflows from the Lumen joint venture. He also asked about the expected seasonality of fiber and Fixed Wireless Access (FWA) net additions over 2026, and any anticipated distribution changes for these services.

Answer

CFO Pascal Desroches confirmed the year-end leverage target includes expected cash proceeds from an equity partner in the Lumen JV and growth in EBITDA. CEO John Stankey anticipated continued seasonality in broadband, with higher volumes in the second half of 2026, but noted footprint expansion would offset some of this. He cautioned that the rapid Lumen transaction close means a compressed pre-planning phase, leading to a 1-2 quarter learning curve for integration and operational ramp-up. COO Jeff McElfresh added that distribution assets are already in Lumen territory, and the go-to-market strategy remains consistent with proven winning plays, with FWA advertising ramping nationwide.

Sebastiano Petti sought clarification on whether the year-end leverage target assumes cash inflows from the Lumen joint venture. He also asked about the expected seasonality of FWA and fiber net additions, particularly if the second half of the year will see higher volumes than the first, and any anticipated distribution changes for fiber and FWA.

Answer

CFO Pascal Desroches confirmed that the year-end leverage target assumes cash from an equity partner for the Lumen assets, alongside EBITDA growth. CEO John Stankey expects continued seasonality in broadband, with higher volumes in the second half, but noted that footprint expansion will partially offset this. He highlighted a compressed pre-planning timeline for Lumen, anticipating a two-quarter ramp for integration and operational efficiency. COO Jeff McElfresh stated that existing distribution assets in the Lumen footprint are robust, and no significant changes to the go-to-market distribution strategy are expected.

Sebastiano Petti asked about the seasonality of Fixed Wireless Access (FWA) subscriber results, comparing it to fiber, and the pacing of FWA expansion with the EchoStar spectrum. He also sought an update on Gigapower, including any new ISP partners and the assessed risk of wholesale partners meeting their targets for the 60 million fiber homes.

Answer

Chairman and CEO John Stankey acknowledged some seasonality for fixed wireless during the holiday season, similar to fiber, though potentially less dramatic due to no home installation and a business focus. He expressed satisfaction with the Gigapower partnership and model, expecting AT&T to remain the anchor provider with a dominant share. Stankey viewed additional providers on the network as an extension to increase penetration at the margin, rather than a problem for AT&T's retail activities.

Sebastiano Petti asked about the expected seasonality of fixed wireless (FWA) net adds in Q4, similar to fiber, and the pacing of FWA expansion with the deployment of EchoStar spectrum. He also requested an update on Gigapower's progress, including potential new ISPs, and assessed the risk of wholesale partners meeting fiber deployment targets.

Answer

Chairman and CEO John Stankey acknowledged that consumer behavior during the holiday season likely introduces some seasonality to FWA net adds, though potentially less dramatic than fiber due to no in-home installation and a stronger business segment focus. He noted that AT&T lacks extensive historical FWA seasonality data. Stankey expressed satisfaction with the Gigapower partnership, expecting AT&T to remain the anchor provider with dominant customer share. He views additional wholesale providers as an opportunity to increase penetration at the margin rather than a risk to AT&T's retail activities.

Sebastiano Petti of JPMorgan Chase & Co. asked for expectations on consumer wireline subscriber growth in the second half of the year, particularly for fiber. He also questioned if there has been any change in the level of competitiveness from cable providers, such as increased bundling.

Answer

CEO John Stankey stated that he expects normal seasonality to apply to fiber net adds in the second half of the year. He highlighted that an increasing share of these net adds are coming from cable competitors, as the initial wave of migrations from AT&T's own copper customers has matured. Stankey expressed confidence in the team's ability to continue gaining its fair share of the market and marching up penetration, which is now north of 40%.

Sebastiano Petti of JPMorgan asked about management's confidence in reaching the high end of its Mobility EBITDA guidance and whether a weaker economy could jeopardize the long-term fiber build target.

Answer

CFO Pascal Desroches expressed confidence in the mobility guidance, citing the absorption of Q1 launch costs, benefits from upcoming pricing adjustments, and accelerated cost actions. CEO John Stankey affirmed his commitment to the fiber build, describing it as a long-term, structural investment and a share-take opportunity that is less susceptible to economic cycles. He stated his bias is to continue pressing this strategic advantage.

Sebastiano Petti asked for an analysis of the drivers behind the strong wireless service revenue growth in the business segment and how AT&T sees its market share opportunity evolving, particularly in the Fortune 1000.

Answer

CEO John Stankey identified the biggest driver for success in business wireless as improving distribution effectiveness in the mid and low end of the market, rather than just relying on broad economic growth. He stated that improving this distribution structure is a key operational focus and that progress in this area is factored into the company's forward-looking forecasts.

Sebastiano Petti of JPMorgan Chase & Co. questioned how Verizon plans to achieve 2026 free cash flow growth, including Frontier, given current CapEx trends and Frontier's cash burn. He also asked for clarification on the trajectory of consumer and Total Wireless account declines in the quarter, which saw the highest losses since Q1 2020.

Answer

CFO Tony Skiadas expressed confidence in 2026 free cash flow growth, citing strong current cash generation, significant cost transformation plans, and efficient capital spend, with CapEx likely at the lower end of the 2025 range. CEO Dan Schulman acknowledged the account declines, attributing them to the "status quo" and reiterating the commitment to aggressive customer delight, competitive offers, and a focus on winning responsibly without irrational promotional spend.

Sebastiano Petti questioned how Verizon expects to achieve 2026 free cash flow growth, especially considering Frontier's current cash burn and CapEx trends. He also asked for clarification on the trajectory of consumer and total wireless account declines, noting Q3 2025 losses were the highest since Q1 2020.

Answer

CFO Tony Skiadas reiterated expected 2026 free cash flow growth (including Frontier), citing a strong starting point, significant cost transformation, and efficient capital spend (2025 CapEx at the lower end or better). CEO Dan Schulman acknowledged the unacceptable account growth status quo, emphasizing a focus on winning smart and responsibly by prioritizing customer wants, creating best value propositions, and enhancing customer experience to attract and retain subscribers.

Sebastiano Petti of JPMorgan Chase & Co. asked for clarification on the impact of free line promotions on net adds, the cause for the sequential drop in prepaid net adds, and whether the 'early 2026' Frontier deal closing implies a delay.

Answer

Chairman and CEO Hans Vestberg confirmed the Frontier closing timeline remains on track for Q1 2026 and stated the free line offer's impact was insignificant. EVP & CFO Tony Skiadas explained the prepaid segmentation strategy is working well across all brands and has reached an inflection point where it is expected to contribute positively to service revenue growth in the second half of the year. He also noted prepaid-to-postpaid migration is not a significant factor.

Sebastiano Petti asked if Q1 consumer SG&A was artificially low and would ramp up, and questioned the strategy around accelerating fiber partnerships or builds ahead of the Frontier deal closing.

Answer

CEO Hans Vestberg stated that the current focus is on closing the Frontier acquisition and ramping up its internal fiber build as planned. CFO Tony Skiadas explained that Q1's strong EBITDA was a result of disciplined spending ahead of the April product launch, not an artificial dip, and expressed confidence in the full-year growth outlook. Consumer Group CEO Sowmyanarayan Sampath highlighted that the vast majority of the 339,000 broadband net adds were converged customers, validating the strategy.

Sebastiano Petti from JPMorgan Chase & Co. asked about the underlying growth rate of the reclassified device protection revenue, the expected pace of Fixed Wireless Access (FWA) growth considering the new MDU solution, and the outlook for consumer phone net adds, particularly in relation to immigration trends.

Answer

CFO Tony Skiadas clarified that the $2.9 billion device protection reclassification has an insignificant impact on the overall growth rate, around 5-10 basis points. CEO Hans Vestberg and Consumer Group CEO Sowmyanarayan Sampath addressed FWA, stating that while C-band deployment in less dense areas might affect the pace, the new MDU solution and accelerated Fios builds will maintain strong overall broadband growth, targeting 350,000 to 400,000 net adds per quarter. Sampath emphasized that their value proposition resonates well, allowing them to capture over 50% of industry net adds.

Sebastiano Petti asked about the underlying growth rate of the $2.9 billion in device protection revenue being reclassified. He also inquired about the expected pace of Fixed Wireless Access growth, the impact of the new MDU solution, and any potential slowdown in immigration growth.

Answer

CFO Tony Skiadas stated the reclassification has an insignificant impact on the overall growth rate. CEO Hans Vestberg and Consumer Group CEO Sowmyanarayan Sampath projected continued broadband strength, targeting 350,000 to 400,000 net adds per quarter across FWA and Fios, supported by the scaling MDU solution and Fios expansion. They noted the value proposition is resonating well with customers.

Sebastiano Petti asked about the expected trajectory for TDS Telecom's fiber net additions for the year and the competitive landscape for fiber expansion. He also questioned how the upcoming spectrum supply pipeline might influence Array's monetization strategy for its remaining C-band assets.

Answer

Kristina Bothfeld, VP of Finance & CFO at TDS Telecom, stated they still target year-over-year growth in fiber net additions, which will ramp with address delivery in H2 2025. She also affirmed confidence in their expansion markets' competitive positioning. Douglas Chambers, Interim President & CEO of Array, explained that with build-out deadlines not until 2029, Array has time to be opportunistic in monetizing its C-band spectrum to maximize value.

Sebastiano Petti questioned the rationale for not redeeming TDS's preferred stock post-transaction, sought details on the ramp-up of TDS Telecom's $100 million cost savings program, and asked about the financial impact of the Colorado asset sale. He also probed the strategic reasoning for maintaining UScellular as a separate public company.

Answer

Vicki Villacrez, EVP & CFO at TDS, described the preferred stock as foundational capital for the future structure, with the immediate priority being the repayment of bank debt. Kristina Bothfeld, VP of Finance & CFO at TDS Telecom, stated the $100 million in cost savings will ramp by 2028 and that the small Colorado divestiture's impact is already in guidance. Regarding corporate structure, Villacrez noted that post-close, they will be two strong public companies and are focused on closing the deal before considering longer-term structural paths. Laurent Therivel, President & CEO of UScellular, added that the incremental cost of being public is minimal.

Sebastiano Petti from JPMorgan Chase & Co. asked if TDS Telecom's increased sales and marketing costs are a new run-rate expense and how potential FCC spectrum cap changes might affect the monetization strategy for UScellular's remaining C-band assets.

Answer

Chris Bousfield, TDS Telecom CFO, stated that near-term investments in sales, construction, and transformation are designed to drive future growth, not necessarily a permanent cost burden. UScellular CEO Laurent Therivel added that while he is encouraged by potential FCC changes, the company's opportunistic approach to selling spectrum is driven by achieving fair value, not by waiting for regulatory shifts.

Sebastiano Petti sought confirmation on TDS Telecom's previously announced asset sales and questioned the strategic direction for UScellular's remaining tower portfolio, asking if it might become a net acquirer of assets. He also inquired about TDS's MVNO strategy and whether its current approach would preclude future agreements with scaled national wireless operators for converged offerings.

Answer

Michelle Brukwicki, SVP of Finance & CFO of TDS Telecom, confirmed the divestitures mentioned were those previously disclosed. Laurent Therivel, President & CEO of UScellular, explained that the primary focus for the tower business is increasing colocation on existing assets but that they would consider acquisition opportunities if valuations are sensible. Vicki Villacrez, EVP & CFO of TDS, detailed that their MVNO is being launched via the NCTC cooperative, which partners with a national 5G player, and they are currently in customer trials.

Sebastiano Petti asked about the EBITDA flow-through of a $45 million one-time revenue item, the outlook for cost-to-serve benefits, and updated expectations for full-year operating expenses.

Answer

CFO Jessica Fischer confirmed the $45 million item largely fell to the bottom line and reiterated the full-year EBITDA growth outlook. She maintained prior guidance for cost lines, with cost-to-serve expected to be flat to slightly down for the year. President & CEO Chris Winfrey added that long-term cost-to-serve remains a significant opportunity driven by AI tools and employee tenure.

Sebastiano Petti asked for more detail on the 2025 EBITDA growth forecast, specifically regarding operating expense trends in areas like sales and marketing as the 'Life Unlimited' brand ramps up. He also inquired how potential changes in tax policy, such as the extension of bonus depreciation, might alter capital allocation priorities between shareholder returns and network investment.

Answer

CFO Jessica Fischer projected 2025 EBITDA growth driven by mobile, new pricing benefits, and cost efficiencies. She expects programming and cost-to-serve expenses to be flat to slightly down, while sales and marketing may see low-to-mid-single-digit growth. President and CEO Chris Winfrey added that favorable tax changes (bonus depreciation, interest deductibility) would make certain capital projects more attractive, potentially boosting investment in initiatives beneficial to customers and communities.

Sebastiano Petti asked about the drivers behind the strong acceleration in podcasting revenue, especially amid competition from video platforms, and questioned how potential broadcast deregulation might impact iHeart's strategy.

Answer

CEO Bob Pittman attributed podcasting success to having popular content and noted that consumers primarily want to listen to podcasts, viewing video versions as a separate medium. He also highlighted the promotional power of broadcast radio. CFO Rich Bressler added that the strategy of avoiding paywalls, leveraging a 1,000-person sales force, and utilizing advanced ad tech are key drivers. On deregulation, Bressler stated it would not affect their strategy as they already reach over 90% of the U.S. population.

Sebastiano Petti inquired about potential cost levers to improve EBITDA in the wireless segment and asked for details on EchoStar's low-earth orbit (LEO) satellite strategy, including where the assets would be organizationally housed.

Answer

CEO Hamid Akhavan and COO John Swieringa explained that wireless economics will improve by migrating more customers onto their own network, which has lower costs, and by developing more efficient distribution channels. Regarding LEO, Hamid Akhavan confirmed it is a major strategic priority focused on global direct-to-device services, but announcements will be made when there is more substance to report. He also clarified that future LEO assets would likely be held at the EchoStar parent level, not within the Hughes segment.

Sebastiano Petti questioned the seemingly conservative revenue guidance given the strong Q1, sought reassurance that the ATG unit decline was due to maintenance rather than competition, and asked about the competitive position of the GEO broadband business.

Answer

CFO Zachary Cotner explained the guidance reflects caution around factors like ATG unit trends and potential pressure on GEO ARPU. CEO Christopher Moore affirmed the ATG decline was maintenance-related, citing market intelligence and strong 5G pre-provisioning. Moore also noted that GEO is performing well, benefiting from OEM line-fits, and that the new Galileo LEO service can serve as both a GEO replacement and a complementary offering for customers seeking multi-orbit solutions.

Sebastiano Petti from JPMorgan asked about management's confidence in the Gogo 5G timeline, the potential for cost synergies to exceed the high end of the guided range, and clarification on the capital allocation policy regarding shareholder returns versus leverage targets.

Answer

Executive Chairman Oakleigh Thorne expressed confidence in the 5G timeline, noting the chip fabrication is the last critical step. CFO Zach Cotner confirmed that the company will exceed its synergy target, with $27 million in run-rate savings already achieved, primarily from labor. He stated that deleveraging is the current priority for capital allocation, with shareholder returns to be re-evaluated once leverage is within the target range, which he expects to be by year-end.

Sebastiano Petti of JPMorgan Chase & Co. inquired about the outlook for 2025 free cash flow after Gogo withdrew its long-term guidance, and asked for an explanation of Gogo's long-term strategic positioning after acquiring Satcom Direct, particularly regarding competition from established GEO providers and the potential impact on pricing and margins.

Answer

EVP and CFO Jessica Betjemann explained that the 2025 free cash flow outlook is affected by increased interest expense from acquisition debt, lower margins on higher equipment sales due to competitive pricing, and timing shifts in both FCC reimbursements and strategic spending. Chairman and CEO Oakleigh Thorne clarified the Satcom Direct acquisition is primarily a strategic move to accelerate Gogo's LEO product growth by leveraging Satcom's distribution channels to its 1,300 GEO customers and into the MilGov market, rather than a simple GEO business acquisition.

Sebastiano Petti asked why management is not signaling upside to the 2025 EBITDA guidance given positive trends, and requested clarification on the size of the digital subscriber drag in Q1.

Answer

CFO Thomas Barry stated that while cost savings are on track, the guidance accounts for many moving pieces and the company is comfortable with the current outlook. CEO Jennifer Witz added that the guidance was designed to be solid, noting potential for reinvestment of savings later in the year. She confirmed that Q1 streaming net adds were negative but were offset by better performance in the core in-car business, keeping the company on track for its full-year subscriber goals.

Sebastiano Petti asked for clarification on the pressures affecting fourth-quarter EBITDA, including the impact of one-time costs and whether the new hyperlocal strategy might increase SG&A expenses in 2025.

Answer

CEO Dennis Mathew stated that some Q4 costs were one-time investments related to their Phase II transformation plan. CFO Marc Sirota added that normalized full-year EBITDA was down 4.4% and Q4 was down 5%, excluding one-time items like storm-related costs and transformation consulting fees. Sirota expressed confidence that the EBITDA trajectory will continue to improve into 2025, with Dennis Mathew adding that they expect EBITDA to stabilize in '25.

Sebastiano Petti inquired about future fiber passing plans beyond the 3 million mark, the margin impact of migrations, and Altice's perspective on M&A amidst industry consolidation.

Answer

Executive Dennis Mathew stated that the immediate focus is driving penetration and migrations on the existing 3 million fiber passings, noting that migrations drove 70% of recent fiber net adds. Future capital will balance penetration with new builds in high-growth areas. Regarding M&A, he gave a standard response that the company is open to value-accretive deals but is currently focused on executing its operational plan. Executive Marc Sirota added that recent industry activity reinforces the high value of their fiber assets.

Sebastiano Petti of JPMorgan followed up on the leverage target, asking for specific examples of infrastructure asset monetization being explored, such as towers or fiber. He also requested more detail on the glide path to 3x leverage, noting that the path seems unclear without significant asset sales, and asked about the real estate monetization timeline.

Answer

President and CEO Darren Entwistle provided a detailed 'recipe' for deleveraging, including EBITDA growth, reducing CapEx intensity to ~10%, real estate monetization (targeting ~$3B), copper recycling (~$0.5B net), bringing partners into Health and Agriculture, and divesting non-core assets. He stated fiber monetization is a 'no,' while tower monetization is a 'maybe.' CFO Doug French added that real estate monetization would see a lump sum payment in approximately two years.

Sebastiano Petti inquired about the MLSE acquisition structure and the path to a controlling interest. He also asked about the organic deleveraging path and what the new structured financing implies about the core business's cash generation.

Answer

Chief Financial Officer Glenn Brandt affirmed the company will manage the MLSE acquisition while continuing to delever, targeting a similar leverage ratio of around 3.7x at the end of 2025. He expressed high confidence in the company's organic cash generation, citing accelerated synergy realization, and positioned the $7 billion financing as a flexible and value-accretive move that provides optionality.

Sebastiano Petti sought clarification on the Q3 consumer fiber ARPU outlook and questioned if the updated EBITDA guidance implied a back-half slowdown, suggesting potential conservatism.

Answer

CFO Scott Beasley clarified that Q3 ARPU is expected to be roughly flat sequentially in dollar terms (but still up year-over-year) due to ACP transition plans, with a pickup expected in Q4. On EBITDA, he highlighted that the guidance midpoint was raised and implies 5% growth in the second half, consistent with the first half. He noted potential headwinds from ACP, higher seasonal energy costs in Q3, and the lumpy nature of business revenue.

Sebastiano Petti questioned the sustainability of consolidated revenue growth going forward. He also asked about any signs of a broader market slowdown or mobile substitution and requested color on the operational impact of the recent cyber incident on gross additions.

Answer

CFO Scott Beasley confirmed the expectation for continued year-over-year and sequential revenue growth in Q2 and for the full year 2024. He noted that while underlying demand is healthy, the April systems issue might push some Q2 orders into future quarters. CEO Nick Jeffery attributed Frontier's resilience to its scale and operational momentum, which smaller, capital-constrained players may lack. Jeffery also stated the cyber incident is not expected to have a material financial impact.