Good day and welcome to the TDS and U.S. Cellular Third Quarter 2022 Operating Results Conference Call. Please note, today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. At this time, I'd like to turn the conference over to Colleen Thompson, Vice President of Corporate Relations. Ms. Thompson, you may begin your conference.

Good morning and thank you for joining us. We want to make you all aware of the presentation we have prepared to accompany our comments this morning, which you can find on the Investor Relations sections of the TDS and U.S. Cellular websites. With me today and offering prepared comments are from TDS' Vicki Villacrez, Executive Vice President and Chief Financial Officer; from U.S. Cellular, LT Therivel President and Chief Executive Officer; Doug Chambers, Executive Vice President Chief Financial Officer and Treasurer; and from TDS Telecom, Michelle Brukwicki, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and U.S. Cellular Investor Relations website. Please see the websites for slides referred to on this call including non-GAAP reconciliations. We provide guidance for both adjusted operating income before depreciation and amortization or OIBDA and adjusted earnings before interest, taxes, depreciation and amortization or EBITDA to highlight the contributions of U.S. Cellular's wireless partnerships. TDS and U.S. Cellular filed their SEC Forms 8-K including the press releases and our 10-Qs yesterday. As shown on Slide two, the information set forth in the presentation and discussed during this call contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the Safe Harbor paragraphs in our press releases and the extended version included in our SEC filings. In terms of our upcoming IR schedule on Slide 3, we are attending the Raymond James Technology Conference in New York on December 07 and the Citi Communications Media and Entertainment Conference Scottsdale on January 05. And as always our open door policy can now be an open door phone or video policy, so please reach out if you're interested in speaking with us. I will now turn the call over to Vicki Villacrez. Vicki?

Okay. Thanks Colleen and good morning, everyone. Both our business units are well positioned to take advantage of growth opportunities to enhance their competitive positions and have tightened guidance ranges as we enter the fourth quarter. As we discuss both U.S. Cellular and TDS Telecom are in key investment cycles that are pressuring free cash flow near term. So with the goal to position us for growth and improved returns over time. Both businesses are effectively managing through inflationary and supply chain pressures through a number of mitigating actions to address these risks. Importantly, our business -- our balance sheet strength also positions us well to manage against the interest rate increases that we are currently seeing. We continue to be pleased with our financing strategy, which incorporates the combination of long-dated maturities and preferred equity. In addition to opportunistic short-term financing to help fund our network modernization investments in both businesses, and expansion into new markets at TDS Telecom. I also want to highlight that during the quarter, we repurchased a modest amount of stock at both companies. As a result, we have spent $55 million in stock buybacks this year, $26 million and $29 million at TDS and U.S. Cellular, respectively. Okay. And now I'll turn the call over to LT.

Thanks, Vicki. Good morning, everybody. If I think back to our last quarter call, we recently launched a number of new pricing and promo offers that were designed to address the subscriber challenges that we saw in the first and second quarter. And while I'm encouraged with the early results of these promotions, you can see our all-in postpaid subscriber results are still challenged. But we are seeing a number of leading indicators moving in the right direction, and I'm going to expand on that shortly. But since many of our promotional efforts are designed to address churn, we know it's going to take some time for those efforts to translate into overall improved subscriber results. Now we're seeing continued competitive intensity in that as well as the shifts in the macro economy are reflected in our numbers in this past quarter. And so let me touch on each of those briefly. From a competitive perspective, substantially more investment is required in promo expense compared to several years ago. We see that our carriers expanding into rural America. And although our exposure to cable is lower than the national average, bundled wireless with wireline adds another competitor into the mix in parts of our footprint. Doug is going to discuss the rise in bad debt expense in some more detail. What we're seeing is that although the percentage of defaults are consistent with prepandemic levels, the rate per default is greater than in the past. And we anticipate that these macro factors are going to continue through the remainder of the year, so we've lowered the high end of our service revenue and profitability guidance for 2022. We still expect to be within our original range. We remain confident that we have the right strategies in place to drive customer…

Thanks, LT. Good morning. Let's start with a review of customer results on Slide 8. Postpaid handset gross additions increased by 2,000, driven by increased out-of-line activity, as LT mentioned previously. Postpaid handset net additions were down 17,000 driven by an increase in churn, which I will discuss in a moment. However, compared to the first and second quarter our ongoing promotions drove improvements in both gross and net additions. Connected device gross additions increased by 4,000 driven by fixed wireless additions, while net additions decreased by 6,000, primarily due to higher defections, which I will discuss on the next slide. Overall, we are very pleased with our momentum in fixed wireless, and we now have a base of 66,000 customers with this product, up 40% from the prior year and 16% from the prior quarter. Let's turn to the postpaid churn rate shown on Slide 9. Postpaid handset churn increased from the prior year fairly evenly between voluntary and involuntary. Voluntary churn increased as a result of increased switching activity and aggressive industry-wide competition. Involuntary churn also increased as the frequency of non-pay customers increased to prepandemic norms. Total postpaid churn, combining handsets and connected devices, increased due to higher handset churn and certain business and government customers disconnecting connected devices, many of which were originally activated during the pandemic in conjunction with government and agency funding that has subsequently ended. Moving to Slide 10. Postpaid gross additions declined 12,000 and prepaid net additions decreased 9,000. Both declines were due to continued aggression in the competitive environment. In response, we've launched new pricing for certain prepaid plans in July, which is driving sequential improvement in both gross and net additions, which were positive in Q3 for the first time in 2022. Now let's turn to the financial results, starting…

Thanks, Doug, and good morning, everyone. We are pleased with our results at TDS Telecom for the third quarter, and I'm also pleased to report that we are continuing to grow our business by providing quality, high-speed broadband. Our strategy is working. TDS Telecom grew its footprint by 7% from a year ago, now serving 1.5 million service addresses across our markets. This quarter, we added 33,000 marketable fiber service addresses to our footprint. We are directing our investments to expand our fiber footprint in new and existing markets and to enhance our product offerings. These investments are driving revenue and broadband connection growth. In our expansion markets, we began offering service in Billings, Montana, and Green Bay, Wisconsin, and announced fiber expansion into 18 additional Wisconsin communities. In total, today, we have nearly 100 communities in our fiber expansion program at various stages of development. In our cable markets, we have upgraded to offer 1 gig speeds across our footprint and have achieved superior market share. In these markets, we are also deploying fiber in opportunistic areas. Likewise, in our incumbent wireline markets, we are very pleased that we have achieved superior market share where we've invested in fiber. In addition to our own funding, we drive faster speeds in our more rural markets by building to meet our A-CAM obligations and utilizing state broadband grants. In fact, TDS Telecom just successfully won a grant in Tennessee. This spring, the FCC issued a notice seeking comment on a proposed extension of the federal A-CAM program, which we fully support. We anticipate an extension would provide 6 additional years of revenue support in exchange for deploying higher broadband speeds. We have been working through the comment process and remain engaged with the FTC and hope to have a final rule…

Erika, we are now ready for questions.

[Operator Instructions] Your first question comes from the line of Rick Prentiss with Raymond James.

A couple of questions. We'll start on the wireless side. LT, Doug, you guys mentioned you've seen increasing in upgrades. Where were upgrades at in the quarter? And where do you think they're headed as we look into the next year?

Yes, Rick, our upgrade rate in Q3 was 8.2%. I would look for a similar trend in the fourth quarter. As we mentioned, we're running our new and existing promo throughout the end of the year, and that's driving a lot of upgrades.

Right. And one of the things you called out was also expanded competition in rural America. When you think about the voluntary churn side of things, where were you losing customers to if you think of the porting ratio kind of stats? Are you losing it to Verizon, AT&T, T-Mobile or the cable bundles?

Yes, I'll start by saying we've always lost and gained more customers from Verizon just by virtue of their market share. But with respect to trajectory as far as how that's headed, the loss share and win share, it very much reflects what you're seeing in the national trends. When you see the carriers report the winners and losers on a national basis, I would say are also -- that's reflective in our markets as well.

Okay. So you are seeing some build out -- increasing build out of AT&T and Verizon into your markets?

I would -- increasing -- well, a little bit from AT&T, what I would say is that, on a relative basis, we're losing less to Verizon than we have historically.

Yes. A couple of quick ones. On the fixed wireless side, obviously, some nice success there as others in the are starting to tap that. Who do you see is taking those services? On the opposite side of that first question, who are you gaining share from on the fixed wireless side? And I think I've seen some reports that you'd like to see some change in equipment. Help us understand kind of the trajectory there of fixed wireless, and who you're grabbing share from?

It's LT. So I think, generally, where we're selling this product and where we're seeing success, if you think about the product that we're selling, much of the sales is still on a based product. Some of it is 5G, where we've upgraded our network, but much of it is LTE. And so that product generally competes against DSL, against satellite. And so although we don't have the exact figures because we don't see kind of reporting in the same way that we do -- the wireless moves, my expectation is that's generally who we're taking share from. Next year, when we fire up mid-band, which will be at the end of next year, I expect that mix to move more towards taking share from cable companies. But at least, right now, it's primarily, I would say, DSL and [indiscernible] .

Okay. And the last one, we've seen a lot of movement on the DISH side as they look to hit their bogey for population coverage. Any updated thoughts on just specifically, but other partnership agreements that you might be looking into working with as we think about capital efficiency in this wireless -- competitive wireless world?

I'd kind of answer that question in two ways. I mean, certainly, from the tower side of our business, we continue to see increased interest, both from DISH, from other players as well. I've mentioned before, we kind of opened the towers up for business about 1.5 years, two years ago, and we're seeing the benefits of that. And you see it in the revenue growth on the tower side. From a deeper partnership perspective, I think things like network sharing and so on, we continue to engage in those conversations. I do think, in the long run, this concept of building out four or five, duplicative 5G or duplicative 6G networks in rural America doesn't make sense economically. And so I think there will be opportunity there. We continue to have conversations with players in the industry, but probably nothing specific to report beyond that.

Operator next question?

It's from the line of Simon Flannery with Morgan Stanley.

Great LT, just continuing on, you talked about the mid-band. So perhaps you can just give us some more color around how long it will take you to sort of fully deploy the mid-band across your footprint? And is that mostly 2023 CapEx, how does that look versus '22? And then just a broader point on capital allocation. I think you started the call talking about this is a period of investment, both on the fiber side and on the wireless side, but that's putting strain on the balance sheet on leverage. So how do you think about capital allocation here about what target leverage should be, about the dividend, about your CapEx sort of levels and considering asset sales and other options to raise capital to pay for this?

Thanks for the question. So let me start. I'll give you kind of a high-level thought about mid-band and mid-band deployment. And we've got Mike Irizarry, our CTO here, he'll add some more color and specifics, and then let me answer briefly the question on leverage, and then I'll ask Vicki to chime in since I imagine she'll have more specifics. So let me start with the question on leverage. We went through a substantive rebalancing of our balance sheet earlier this year. Overall cost of debt down substantively I think we're in a very good position to fund the investments that we're making. Yes, we spent a lot of money on C-band and 3.45 spectrum, for example. I think we also got that spectrum at a fairly attractive rate relative to the rest of the auction prices. And we were able to pay for it with, I think, very reasonably priced debt. And so I think, from an overall balance sheet health perspective, I believe we're in good shape, and that was reinforced by conversations that we had here fairly recently with the rating agencies. I think that we're in a position to be able to fund the requisite 5G investments mid-band build-out in a way that doesn't particularly further strain the balance sheet, but I'm sure Vicki can give more details. Let me talk briefly about mid-band and then I'll have Mike go into more detail. So, Simon, the strategy is that we will be starting to roll out that mid-band to our towers now. So you can -- we'll be putting those radios on towers throughout 2023. However, that spectrum does not clear until the end of 2023. And so our goal is to be able to, for lack of a better word, flip a switch towards the end of '23, early '24 and already have a substantive amount of that mid-band spectrum deployed that will help us in two areas. The first, it will help us from an overall wireless perspective, improved speed, improved quality. And so we're excited to get that out for our wireless customers. Where I also expect to see a really substantive lift is on the high-speed Internet side of the equation. We'll be able to start marketing a product. We haven't exactly decided the speeds will market at [indiscernible] given that we're seeing gig speeds in trials. And we do have our millimeter wave-enabled product out there in the marketplace of 300 megs, you can expect to see something similar from a mid-band enabled product. And we think it can be highly competitive in the marketplace. And so excited about that mid-band deployment and switching that on at the end of the year, both for both sides of that business. Mike, maybe you can give a little bit more detail about the deployment time line and when we expect to see what from the mid banner.

So LT gave a number for the end of 2023, and we're on track to light those sites up. We've started to design, purchase order and all the design stuff to launch those up. And as we've done with other large capital-intensive complex project, we break it over multiple years. This project will be very similar. We will pick up speed after 2023 and look to activate anywhere between 800 to 1,000 sites per year, very strategically targeted where we can improve the customer experience, offload capacity and also synergize that with the fixed wireless opportunity that LT talked about. So we're excited about it and on track to meet that plan.

Thanks, Mike. And, Simon, I'll just jump in here on the leverage. As you know, TDS is always had a disciplined financial policy and maintained a conservative balance sheet. And that's really characterized with a significant portion of long-dated debt and preferred equity. And as I think about leverage, we don't have targeted leverage ratios per se. We need to balance that with the needs of the business. And as LT said, and I said in my opening comments, both our businesses are going through an investment cycle at the same time because they're taking advantage of a window of opportunity that we think is really important to position us for the long-term growth that both -- that everybody has been talking about going forward. The balance sheet has -- strength is really providing us with that room. And we've got the spectrum purchases paid for and behind us. They're really good spectrum. And now we need to stay focused on our fiber build-outs and our 5G modernization. I'd also say that we have increased our leverage to support our businesses, but our intent is to stay at levels that we feel comfortable managing the business at, which is moderate really for our industry overall. And as LT mentioned, our -- Moody's and S&P reaffirmed our credit rating because they're supportive of the type of investments that we're making. It's -- these investments are for the long-term sustainability of our business, and they're critical. We're well within our bank covenants. We've got room, and our plans incorporate the capital spending that we've got going forward.

Okay. Operator, we're ready for the next question.

Philip Cusick from JPMorgan.

LT, maybe you can just talk about where you see this market going, the wireless market growing? AT&T was aggressive for the last few years. Now Verizon is matching them, giving away handsets to existing customers. T-Mobile is only going to get wider footprint and cable is taking share as well. I see you fighting hard, and I see the creativity, but this doesn't seem to be working out. So without going back through your script, help investors understand why they should have faith that you can turn the direction of subscriber growth without destroying profitability in the business?

Phil, you don't want me to go back through my script, I'm disappointed. I was really looking forward to moving back to..

And I heard the whole thing. And I listened to it.

So if I take a step back and I think about the strategy that I articulated a couple of years ago and that we have reinforced every time we're on one of these calls. It's a strategy that has at a really high level of three components. It is how do we try to stabilize the postpaid consumer side of the business, while investing in growth areas of the business and while driving increased levels of operating efficiency and capital efficiency. Let me take those one by one. The first, stabilizing postpaid. Last year, and up until the first two quarters of this year, we struck, I believe, a really good balance of profitability and subscriber growth. The first two quarters of this year, coming out of the pandemic, we saw substantive increase in voluntary churn. And so we felt that we needed to address that and address it aggressively. So what we've done in the past quarter is we've gotten much more aggressive on the upgrade side of the house. The more you can get customers under contract at a really high level, you can think of in-contract customers churning at half the rate of out-of-contract customers. And so the calculus is, we need to go get more aggressive of getting customers upgraded, and you've seen that in our numbers. 54% increase in upgrades, and that's driven a substantive growth in the number of customers in contract, 59% to 62%. So there's a bear case and a bull case for that strategy. The bear case is, well, these are customers that would have upgraded any way, and consequently, we simply accelerated those upgrades. The bull case is these are customers that might have churned in the future, but, instead, now that we have them in contract, they will not…

That's helpful. Two follow-ups, if I can. One is on upgrades. At this pace of upgrades, when does that start to impact ARPU because it sort of builds over time, and we've seen that at AT&T for the last few years. We're starting to see it horizon this year. I anticipate that you're going to see a -- sort of a drag down of that ARPU growth in the next year. Is that fair?

We do not expect to see that. So yes, there are dilutive impacts to ARPU from the offer in the form of those trailing ARPU credits. However, the way that we've structured the offer, and if I take you back to the regional strategy, we trialed a number of these types of approaches in our different regions before we launched this across the majority of our footprint. And the reason that we did that is we wanted to strike the right balance between aggressiveness and driving upgrades but also bringing customers up to rate stack. And so what you've seen is an expansion in ARPU due in no small part to the promotion. And our teams are doing a really nice job selling things like insurance and moving people up to rate stack irrespective of the promotion. But the promotion is moving people up the rate stack, and that is having -- that is offsetting some of that negative future ARPU trend. So no, we do not forecast further dilution in ARPU just because of this. In fact, we think we're going to be able to continue to expand ARPU. Maybe not exactly at the rate that you've seen this year, but we don't forecast ARPU dilution.

That's helpful. And then finally, you mentioned bad debt. It sounds like a similar rate but higher losses. Should I interpret that to mean that you're losing more per customer? And is that a function of the very large handset subsidies you've offered over the last two years. How have you changed -- if that's correct, how have you changed your credit scoring, maybe address that going forward?

Yes. So we always -- we have done some credit tightening strategically recently. We are looking at doing potentially more of that. We're always balancing our credit policy against the gross add potential of the good ads. And so we're very surgical in how we do that. And so we think we're in the right place. The reality is, as LT and I both mentioned during the call, the frequency of write-offs is back to pre-pandemic levels, and the rate per write-off is up about 15% since prepandemic levels. And so we have been making adjustments to our credit policy. We've been implementing additional anti-fraud measures in our stores, and we've been changing some of our collections strategies and tactics as well. So we are all over it, but there is a macro environment -- a macroeconomic aspect of this that is driving the majority of the increase.

Next question, please?

Your next question comes from the line of Michael Rollins.

Two questions. First, I think back to the history of U.S. Cellular, I think back to a time where the company should Chicago and St. Louis because the performance in those markets weren't matching other parts of the portfolio. Do you have a similar situation today where there's a tale of two cities where there's a certain percentage of your markets that are operating at one level. And then another subset of the markets operating at a different level, different trend, different level of competitiveness? And if you can -- if that's the case, if you could maybe unpack some of those details, that would be great? And then just separately, just kind of curious, LT, where you're standing on the strategic front these days in terms of the urgency to try to take some strategic actions along the lines of ideas you've talked about in the past to try to change the narrative for U.S. Cellular over the longer term?

Mike, so -- as in any business, you're going to see some variability in terms of the profitability of our geographies. There isn't a 80-20 or some obvious delineation line. There's a range of profitability. Generally, that profitability correlates to two factors. The first -- and you will find neither of these surprising. The first factor is market penetration, where we have higher share, we generally have higher profitability. And the second is availability of high-quality spectrum. So where we have a strong spectrum position and we deliver a strong network experience because of it, we generally see higher profitability, better levels of network efficiency and so on. And so there's certainly a range, but I don't think there's anything surprising in terms of what's driving that range. From a strategic perspective, that's a really broad question. In terms of sense of urgency, I think we have a consistent sense of urgency in terms of executing the strategy that I articulated in my answer earlier. And so in terms of investing in areas of the business where we see attractive growth, we absolutely have urgency behind that. And so a continued focus on digital, for example. If we are going to serve customers with lower costs in a more variable fashion, serve people the way they want to be served, certainly coming out of the pandemic we have to invest more in a strong digital experience. And we're seeing that. Two years ago, our average score on the App Store was 1.5 stars, we are north of four now. And so that's an example of an area where we have urgency behind it. Certainly, high-speed Internet, we have the same urgency, opening up our towers, the same urgency. There's two more macro factors that I've discussed in the past. One…

Yes. No, thanks, LT. Actually, you did a great job articulating the position of both of our companies. As I mentioned in my comments, TDS Telecom is very excited about the funding that is available, both at the state level and at the federal level. We are part of the A-CAM program today and are very excited about where that A-CAM extension program could take us that certainly could provide additional funds to take even higher speeds to many, many customers in our most rural areas. And then outside of the A-CAM, we, too, see opportunity with the bead program. And as LT mentioned, we anticipate and hope that a lot of that money does go towards funding fiber for those unserved or underserved customers that are out in our territories. But there will be a place also we see for fixed wireless. Fiber might not be economical to go everywhere and so this could be a nice blend of helping fund fiber and helping fund fixed wireless for the enterprise.

Operator, we are ready for the next question.

Your next question comes from the line of Serge Dluzhevskiy with Gamco Investors.

LT, maybe the first question is on your differentiated market approach and some of the offers that you try in those markets. And it seems like what you trialed before now you rolled out to a wider base in the third quarter. But I guess my question is, how are those local offers performed in the third quarter? And what do you need to take a greater step forward this local market approach so that it has a more meaningful impact on your customer intake and share?

Sergey, so if I break out our local offers since we -- just put a bit of math behind it to give you a sense of how much trialing we do. Since we regionalized about 18 months ago, I think we've run over 75 different promotional permutations of whether it's upgrade offers, or whether it's offers that are more designed to drive gross adds. We currently have a variety of different offers running across our footprint. In our lower-share markets, where we're running our flat rate offers, we're seeing very good performance from a gross add perspective. In our existing same as new markets, we've seen attractive add-a-line improvements. And I won't rehash since already gave me a hard time about requoting things from my script, I won't do it again. But you get a sense of what we're seeing from an upgrade perspective and an ad align perspective in the areas where we're running our existing same as new promotion. The key dynamic is, are those promotions going to drive the desired churn -- the voluntary churn performance that we need them to? In the markets that we trialed them in previously, it took us 6 months or so, 6, 7 months to see the improvements in voluntary churn. And so if you forecast that forward, that helps explain why we are cautiously optimistic that we're going to see that voluntary churn trend turn in the fourth quarter and into early next year. But you don't know. The bet on upgrades is that the bull case will prevail and not the bear case, and that the people that are upgrading are doing so, they might have been future churners, but we've been able to put an attractive offer in front of them. They have confidence in our network. They…

Got it. maybe I'll ask a follow-up question to Mike's question around strategic actions, but maybe just a different permutations of that. So obviously, the turnaround is taking a bit longer than you would like. And I guess, in light of the current competitive environment and capital markets environment. How do you view financial engineering moves that may surface value or highlight value of your various assets, whether it's towers investments in wireless partnerships and new spectrum that could provide you with additional capital to invest in growth and also just provide broader strategic flexibility?

So in terms of the timing, I'm actually -- I think that, from a strategic perspective, if I look at the growth investments that we've made and the performance of those growth investments, I think it's right on track. I think from a stabilizing postpaid, it's a very challenging competitive environment out there. And I think that we're trying to navigate it about as best as we can. You used the word financial engineering, and that's what I want to avoid it. I want to make sure that we have the financial capacity to make the investments that we need. I think that the corporate team and our finance team did a really nice job of restructuring our balance sheet to give us the flexibility that we need to purchase the mid-band spectrum that we did. I don't see, in the near term, new spectrum auctions on the immediate horizon. They're going to further stress that. We have a good plan that Mike articulated about building out C-band, making those investments on the network modernization that we need to make. And I think our balance sheet is in a good place to do that. And so, luckily, I don't feel the need to engage in that financial engineering because we took advantage of an environment of cheap debt. And I think we now have a position to continue to execute the strategy and do so in a way that helps us take share in the marketplace and helps us continue to drive those growth areas. And so I'm happy with the flexibility that we have. I think we're in a good place from a balance sheet and an asset perspective. And now it's time to continue to execute that strategy and start to see the benefits in the marketplace. So thanks for the question, Sergey.

Okay. And my last question, could you talk a little bit about the progress that you've made over the last quarter or two in terms of business and government sector as far as kind of revenue growth, in terms of share? And what are the top objectives, maybe for next year? And where do you see this going in terms of size and impact from the company over the next few years?

Yes. Sorry, I'll be quick because I think we're out of time. But briefly, we continue -- I talked in the last quarter in more specifics about some of the momentum that we were seeing on the private networking side, on the IoT side. We continue to see good demand for those products from our customers. At a very high level, we have three trends that we're working through on the business side. The first is a negative trend, which is we have connected devices that were gross adds that were driven by government subsidies that happened during the pandemic, and we're seeing people disconnect those. They're not porting them. They were to port them to a competitor, I would be worried, but they're not porting them. These were subsidy-driven devices and the subsidies have gone away and those devices are churning off. On the postpaid handset side, we want to see revenue stability, and, generally, we're seeing that -- and then where we're seeing -- where we want to have upside is on those new areas of growth, IoT, private networking. And you want those areas of growth to offset the challenges that you have in connected devices. And we're seeing that. So we're seeing the interest from enterprise clients, from small business clients. We're being brought into deals that I don't think we would have been brought into before, before we had invested in that distribution and invest in those operational capabilities. And so I'm comfortable with that balance because if you think about the negative drag, we're on the back end of that negative drag in terms of connected device disconnects from the pandemic, whereas, I believe, we're only at the beginning of what we're seeing from IoT, private networking and some of these enterprise 5G use cases. So I remain optimistic about where we're going from a B2B perspective. Thanks for the questions everybody.

That was our last question, operator.

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