美國無線通訊 (USM) 2006 Q4 法說會逐字稿

Good morning.

My name is Jennifer and I will be your conference operator today.

At this time, I would like to welcome everyone to the US Cellular year-end operating results teleconference.

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.

Mr.

Steinkrauss, you may begin your conference.

Thank you, Jennifer.

Good morning, everybody, and thank you for joining us during the busy earnings-released season.

This is our first earnings release conference call in some time, and I believe marks the beginning of our hosting these calls on a more regular basis going forward as we return to a normalized filing schedule.

With me today are Ken Meyers, Executive VP and CFO of TDS, Steve Campbell, Executive VP-Finance and CFO at U.S.

Cellular, both of whom will offer prepared comments.

Also joining us this morning are Jack Rooney, President and CEO of U.S.

Cellular, Jay Ellison, Executive VP Operations, U.S.

Cellular.

On the call as well is Bill Megan, Vice President-Finance and Strategic Planning at TDS Telecom who will be available to answer questions on strategy, technology, initiatives, regulatory matters and the like but will not be commenting on financial matters at this time.

A replay of the teleconference will be available today at 1 PM Chicago time, will run through midnight tomorrow.

The replay number is 800-642-1687, the passcode 6106580.

For international callers, the number is 706-645-9291, same passcode.

This call is being simultaneously webcast on the Investor Relations sections of both the TDS Web site and the U.S.

Cellular Web site.

The webcast will be available for the next two weeks, after which it will be available in the conference call archive, and remember archived calls are not updated.

We will be making some forward-looking statements today, so please review the Safe Harbor paragraph in our releases and the more extended versions on our Web site, as well as the filings with the SEC in this regard.

Shortly after we released our earnings results earlier this morning and before this call, both TDS and U.S.

Cellular filed SEC Form 8-K.

The 8-K include the TDS and U.S.

Cellular press releases we issued this morning, along with some additional information, and I encourage you to look at these documents.

Ken Meyers is going to lead off the call today and discuss TDS' delayed filings and the restatement.

Steve Campbell will then discuss U.S.

Cellular's fourth-quarter and year-end results.

While we recognize this is April, please confine your U.S.

Cellular questions to fourth-quarter and year-end results.

The only piece of first-quarter 2007 data that we have issued is retail net adds, and that was in the U.S.

Cellular press release of earlier today.

In the TDS release this morning, we reaffirmed Q4 revenues and operating income as well as 2007 guidance, both of which were covered in a press release dated February 23, 2007.

Additionally, the February 23 release contained TDS Telecom's summary operating data for year and that we customarily made public.

If you have a question on this information, you can feel free to ask a question of Bill Megan.

Both press releases were posted to the TDS Internet homepage this morning shortly after going out over the wire.

U.S.

Cellular posted their release to their Web site as well.

You'll also find posted on our Web site additional information, a reconciliation of non-GAAP financial measures that may be used by management when discussing the operating data during today's conference call, as well as any changes to the Company's forward-looking guidance.

All of this information is now included on a separate page entitled "guidance and reconciliation" to make it easier to find.

The information can also be accessed on the conference call page of the Investor Relations section of both Web sites.

TDS and U.S.

Cellular will be participating in the following conferences and would very much like to see you at any or all of these -- the Baird Growth Stock Conference May 9 in Chicago; the Morgan Stanley 12 Annual Communications Conference May 16 in Washington D.C.; the Lehman Brothers Worldwide Wireless and Wireline Conference on May 30 in New York.

Additionally, in the latter half of May, I will be meeting with investors in several cities in Ohio.

In June, in the first week, we will be appearing at the Deutsche Bank office in New York at the Bear Stearns conference in New York, and that's the second week of June.

Always, we are pleased to make members of our management teams available in Chicago, in Madison, calendars permitting, and with a little bit of advanced notice.

So with that, I now turn the call over to Ken Meyers.

Thank you, Mark.

Good morning.

As you are aware, TDS issued a press release this morning announcing that it would restate its financials to correct its accounting related to share repurchases by U.S.

Cellular, primarily in 2000.

The accounting error is only at the TDS level.

As such, there is no effect on U.S.

Cellular and U.S.

Cellular's 10-Ks being filed today.

At the TDS level, we need to follow purchase accounting rules on these repurchases.

Fundamentally, we will be writing up assets in connection with the U.S.

Cellular repurchases then testing these newer, higher balances for impairments each year.

U.S.

Cellular had a meaningful impairment in 2003 so with the higher TDS balances as a result of the application of purchase accounting, we would expect a larger impairment at the TDS level in 2003.

Similarly, all gains and losses on the trades and sales of properties by U.S.

Cellular over the last few years will now need to be recalculated at the TDS level, due to the difference in the basis once the purchase accounting adjustments are completed.

All of this work will take four to six weeks.

Thus, we will be rescheduling our annual meeting.

U.S.

Cellular, with its 10-K filing today, will not have to reschedule its annual meeting.

Further, we currently expect to file U.S.

Cellular's first-quarter 10Q in four to five weeks, potentially before the TDS 10-K.

As such, we expect to return to our joint filing schedule with the second quarter 10-Qs.

All necessary bake waivers have been secured, and as stated in the press please, this application of purchase accounting is not expected to effect cash or revenues.

So with that, let me turn the call over to Steve Campbell, Executive Vice President and CFO of U.S.

Cellular.

Thank you, Ken.

Good morning, everyone, and thank you again for joining us today.

As Mark said earlier, we are excited about today's call and we look forward to doing this again with you on a regular basis each quarter.

The fourth quarter of 2006 was a very solid one for U.S.

Cellular.

During the quarter, we added 98,000 new retail customers, 96% of which were postpaid customers.

For the full year, total retail net customer additions were 297,000.

As a result, we ended the year with more than 5.2 million retail customers, up 6% on a year-over-year basis.

Total customers, including wholesale, numbered more than 5.8 million, also up 6% year-over-year.

The postpaid churn rate for the fourth quarter was again very low at 1.5%, better than the prior year quarter level of 1.6%.

For all of 2006, the postpaid churn rate was 1.56%.

These results provide a clear proof point that we are successfully maintaining our strong focus on retaining postpaid customers who generate higher long-term revenue and profitability than do prepay or wholesale customers, and that we are delivering on our strategy of providing a high level of customer satisfaction.

At the end of 2006, postpaid customers were approximately 94% of total retail customers.

Along with the improvement in the subscriber base, we also increased revenues and improved profitability in the fourth quarter of 2006.

Total service revenues for the fourth quarter were 832 million, up 13% from the prior year.

The increase in service revenues reflected the growth in the subscriber base, as well as higher average revenue per customer, which rose to $48.15.

Key factors in the growth in ARPU were strong acceptance of our new calling plans and higher data revenues related to our EasyEdge, short messaging service and BlackBerry offerings.

In fact, data revenues were up 65% in 2006 and represented 7% of service revenues for the year.

Total equipment sales for the fourth quarter were $70 million, up 48% from the prior year.

This increase was driven by higher volume as well as higher revenue per unit, reflecting a shift to more expensive handsets with expanded capabilities.

U.S.

Cellular introduced 27 new handsets in 2006, including the MOTO KRZR K1M and several stylish new BlackBerry wireless solution offerings for consumers and business customers.

Operating income in the fourth quarter of 2006 was $64 million, compared to 66 million in 2005.

However, note that the prior-year results included a gain on the sale of assets of $45 million.

Investment and other income for the fourth quarter of 2006 was 35 million, up from 27 million in 2005.

Equity in earnings of unconsolidated entities was 28 million, including 16 million from the Company's investment in the Los Angeles partnership, which continues to perform very strongly.

For the full year 2006, the Los Angeles partnership contributed earnings of $62 million and cash contributions of $61 million to U.S.

Cellular.

Investment and other income for the quarter also included a loss of 46 million representing the fair value adjustment on derivative instruments and a gain of $70 million related to the sale of the Company's 14% ownership interest in Midwest Wireless Communications to ALLTEL in October 2006.

Income before tax and minority interest for the fourth quarter of 2006 was 99 million, up 5 million or almost 6% year-over-year.

Note again, however, that this reflects the impact of the fair value adjustment of derivatives instruments.

As we disclosed previously, changes in the fair value of the collars within the prepaid forward contracts related to the Company's investment in Vodafone ADRs are now recognized in the statement of operations on a current basis, contributing to volatility in reported earnings.

In the fourth quarter of 2006, the fair value adjustment was a loss of about 45 million, which represents an unfavorable swing of almost $81 million on a year-over-year basis.

As a reminder, the impact of the fair value adjustment of derivative instruments is both non-cash and nonoperating.

Net income for the fourth quarter of 2006 was 54 million or $0.61 per diluted share, compared to 61 million or $0.70 per diluted share.

However, as I indicated previously, the year-over-year comparisons are significantly affected by the impact of the fair value adjustment on derivative instruments.

Operating cash flow for the fourth quarter of 2006 was 209 million, up 15 million or about 8% from the prior-year quarter.

For the full year 2006, operating cash flow grew to $865 million, up 123 million or about 17% from the prior year.

Capital expenditures for fiscal year 2006 totaled $580 million and were made to fund construction of almost 500 new cell sites, increases in capacity in existing sites and switches, remodeling of new and existing retail stores, and development of our office systems.

The Company did not launch any significant new markets in 2006 and has no intentions to do so in 2007.

Instead, we remain focused on increasing customers, revenues and profitability within our existing markets.

We will continue to consider attractive opportunities to expand our footprint, as we did in 2006 with the purchase of the remaining 83% ownership interest in the Tennessee three RSA 3 markets and in January 2007 with the purchase of Iowa RSA 15, a small market of 82,000 PoPs in northwestern Iowa.

The final topic that I'd like to cover in my prepared remarks this morning is our guidance update for the full year 2007.

This is covered in the press release.

As I mentioned earlier, the Company achieved strong results with 98,000 retail net additions in the fourth quarter of 2006.

These positive results have continued into 2007.

In the first quarter of 2007, retail net additions were 146,000, up 49% sequentially and up 20% year-over-year.

As a result of this positive trend in additions, we feel that it is appropriate to raise the guidance for retail net additions for the full year 2007 from the previous range of 350,000 to 400,000 to a new range of 375,000 to 425,000.

We believe that the current guidance and the other measures continues to represent our best estimate of the reasonable outcome and should remain unchanged at this time.

As indicated in the press release, such current guidance is as follows -- service revenues, approximately $3.5 billion; operating income, 375 million to $425 million; depreciation, amortization and accretion expenses, approximately 615 million; and capital expenditures, 600 million to 615 million.

That concludes my prepared remarks.

Now, I will turn the call back to Mark Steinkrauss and we will take some of your questions.

Jennifer, we would like to open up the call now to Q&A, please.

(OPERATOR INSTRUCTIONS).

[Robert Shipman].

Good morning.

Sorry to start you guys off with a debt question, but could you give us just a quick update now that there's another accounting issue on conversations with the rating agencies?

(inaudible) stay on review at all three in particular, focus on Moody's and S&P who have you at low triple-B ratings.

Robert, as part of our preparation for this, we've talked with each of the rating agencies over late last week and we expect that we will hear from them today.

As soon as we do, we will get something out to you.

Are you confident, though, that you will be able to hold onto investment-grade ratings?

I don't know that I can say anything until I see what they've got to say.

David Janazzo.

Good morning.

TDS had announced last month that it was ceasing activity relative to the U.S.

Cellular, the buying of the remaining shares.

Can you review with us what led to that decision and when and how or what are the factors that you'll consider to reevaluate that in the future?

TDS made that announcement two years ago, and when they made the announcement, it was based upon future events and what those future events were going to be, the trading pattern of the special common as well as the relationship of the price of the two stocks, the exchange ratio.

And over the time, the exchange ratio widened and besides that, the special common traded at a substantial discount to the regular common at TDS.

In fact, it got as high as 11% us, still trading something in the 8% range.

Our expectations when that was originally done was it might get prolonged in the 2 to 3% range.

So after two years of kind of waiting, it didn't get there and we decided that the best course of action was just to pull it.

It was not an imperative for either of the companies.

At the same time, over that same period, U.S.

Cellular had options and shares that were issued related to those options that had put the 80% ownership of TDS at risk.

That was something that we did not want to (inaudible) because of the immediate tax payments that would be a result of such a deep consolidation from a tax standpoint, so it was pulled off two months ago.

Then, can we assume that you would use the same thought process going forward, the relationship of the stocks, the relationship of the special common to the common?

Well, I don't know how to answer a question about going forward because, as of right now, we had stopped all work related to any such offer.

As a legal matter, yes, we've got the ability to put an offer out in the future, but right now, all work (inaudible) completely halted.

Thank you.

Will Power.

Yes, thanks hosting a call to get us updated.

I guess my question is specifically on the wireless side of things.

I wonder if, first, you could assess your view of the current competitive landscape.

Then I guess as part of that, we've obviously seen a significant acceleration in your retail subscriber growth, both in Q4 relative to the previous periods and again here in Q1.

So I guess I wonder if you could give us a little more clarity as to what you think the principle drivers behind that are?

Thanks.

Well, I think, to your the first part of your questions about the competitive marketplace, I think we see the marketplace as being exceedingly competitive, as competitive as it has ever been.

In terms of our results in Q4 and the carryover into Q1, I think there are a couple of factors that we would cite in the strong results.

One is, as you know, a big portion of customer satisfaction is network quality, and U.S.

Cellular has continued to make the kind of investments that are needed to deliver the top-quality network.

We continue to see that in independent test results and in awards like the J.D.

Power Customer Sat.

awards that the Company continues to win, now for the third consecutive year.

Another factor is churn.

As we mentioned, we had a very, very low churn again in the fourth quarter and for the full year, which we think is reflective of the high level of customer satisfaction that we are continuing to deliver.

Other factors in the strength in the results -- we think that the new calling plans that we introduced in 2006 are increasingly gaining traction and acceptance with customers.

I think as well we've done some interesting things with the introduction of new handsets.

As I mentioned, we introduced 26 new handsets or 27 new handsets in 2006.

That portfolio is now much more attractive to our customer base.

So this is Jay Ellison.

Let me just add on.

I think Steve really hit the key point.

A couple additional items -- as in respect to the rate plans that we introduced late last year, those have really helped contribute very strongly to our lower retention rate going into the fourth quarter of the holiday season and out of the box this year based on some of the numbers Steve has already reported.

Additionally, out of those 26 handsets that Steve mentioned, we launched 11 of those from the middle of November until the end of the year, so a big chunk of our handset portfolio was overhauled in the back half of the year and into the first quarter of 2007.

Finally, along those lines, we always see very robust sales in the first quarter but in particular around the Valentine's Day, and that has continued this year as well.

We had a very robust holiday season that really starts at the end of December and in our minds almost works through to the first of March with the way that holiday fits into the retail sell-in.

Okay, great, thanks.

That's helpful.

Maybe just as a follow-on to that, is there any way to get a sense for what proportion of the subscriber growth in your Q4 and/or Q1 might have been from newer markets, St.

Louis and others, as opposed to (inaudible) (multiple speakers)?

Quite frankly, all of the growth is across the board in all of our markets.

We saw very healthy results in literally every one of our legacy core markets and very good, solid growth in the ones that we've launched over the last three or four years.

Okay, great.

Thank you.

Stephen Mead.

Yes, hello, everybody.

Could you give me an update just on where the share repurchase stands as it relates to USM purchasing its own stock?

Sure, Steve.

This is Ken Meyers.

U.S.

Cellular entered into an accelerated stock repurchase program and has bought 670,000 shares for about $49.1 million from one of the banks.

They in turn will be buying those in the open market over time.

Then what's the authorization that you're dealing with at this point?

The 670 was a combination of the 500,000 that was authorized by the board, and the reinitiation of a diminimus program that U.S.

Cellular has that allows them to buy approximately 170,000 every quarter.

Just on operational basis, as you look at the margins in 2007, as far as the expense lines in the income statement, what is sort of the -- what keeps margins -- they are improving but I'm saying what keeps margins from improving more than what you are guiding towards?

Steve, the key issues we've talked about in the past is that what you've got is, at the wireless level, you've got the newer markets that have gone through their greatest period of cash flow losses as they start-up.

Then once they hit the bottom and start growing, your revenue is growing such that when a market that may have had a significant operating cash flow loss last year is now even at break even, that 0 is now on a larger revenue base.

So what you see mathematically is a slow, gradual improvement in margin points and much more meaningful increase in actual operating cash flow dollars, like last year's 17% increase on cash flow year-over-year at Cellular.

All right, thanks.

Kevin Lo.

Good morning, gentlemen.

A couple of questions -- first, can you give us an update on your views of the upcoming 700 MHz auction, whether you plan on participating and the relative attractiveness of that spectrum?

On CapEx, you mentioned no new builds in 2007, yet you're sitting on some pretty valuable spectrum in Indianapolis and Minnesota, and one could argue the longer you wait, the more value you're leaving on the table.

Can you give us the rationale for delaying that buildout?

Is that spectrum strategic?

Okay, let me try that one.

First of all, the reason for not building any of them this year is a commitment around meeting certain free cash flow levels for purposes of our commitment to the rating agencies.

We don't see any problem doing that but that limits the amount of monetary investment.

But equally, in fact, even more important is that our whole business model, which is based around delivering a differentiated level of customer satisfaction, requires us to have the right people in the organization, to have them fully trained.

Over the last couple of years, as we have launched all of these new markets, we have pulled other people from other parts of our geography into these new markets.

St.

Louis, as an example, probably has 30% of all of its store managers coming in from other markets, all the senior management came in from other markets.

It's important to us that we balanced the pace of new market opportunities against our timeline to develop new leaders.

We don't want to put that at risk.

All of the properties that we've got are adjacent to us, and we will look at the viability of each and every one of those as we get closer to potential launch dates, but there's nothing right now that is an absolute must-have that needs to be launched in terms of our competitive position today.

You know, as it relates to the 700 MHz auction, as you probably know, the timing of the auction and even the structure of the auction, in terms of the size of the blocks, the banding plan and so forth, hasn't been finalized yet.

There still some uncertainty around there.

So U.S.

Cellular hasn't really made any definitive decisions at this point as to whether it would participate or what at level it would participate.

As you know, we have participated in the recent auctions.

Where we're focused right now is ensuring that we have all the spectrum we need to meet the growth in customers' usage in our existing markets and readying ourselves to have the spectrum that we may need for 3G or 4G roll-outs at some point in the future.

A quick follow-up on that -- can you give us a sense of what rules you're favoring or what you would oppose or that would preclude you from participating?

Just some broad brush strokes will be great.

As we've said before, one thing that we have had discussions around is making sure that the new spectrum is auctioned off in licensed sizes that allow us a regional participant to bid.

If it stays with just six licenses, in terms of how they divide it (inaudible) country, that would make it a real challenge for us to be able to participate.

Similarly, there's been talk of package bidding.

We think that, too, would limit the participation of companies of our size if they go to package bidding.

Terrific, thanks.

[Com Fees].

I think that's me.

Thanks for taking the question.

A couple of them -- on the USM side, can you talk about the plans for the evolution of your network, in terms of data capability, where you are in the DO planning, the Rev A planning, and whether or not you think that you need to head down those paths, from a technology standpoint, to keep growth going on the data side?

Then second question -- on the balance sheet side, I think I remember that some of the prepaid forward contracts start to roll off.

Can you tell us what you plan to do with those contracts, so we can figure out puts and takes on the balance sheet?

Yes, so let me start with those couple of questions.

First, on data, I think, as we've disclosed, we launched EV-DO service in Milwaukee, and that launch has been underway for several months now.

We are watching that very closely.

We think we have had good results with the launch in understanding what it takes to build a network to provide those services and how to sell those services and how to service customers with them, and we will continue to watch it.

Depending on those results, we may decide to launch EV-DO-based services in other markets over time.

At this point, though, we would say that we haven't really seen the strong business case driven by strong customer demand for EV-DO-based services.

This is Jay.

I will add onto that.

As Steve mentioned, we did launch, in late November in Milwaukee, on Rev 0.

Obviously, we would wait for any additional deployments on Rev A and determine from the results of Milwaukee, on our music services and our video services, what the packaging go-forwards look like.

The only thing I would add, as a business, we're also working diligently to make sure that the kind of backbone and backroom operations are solidified for EV-DO roll-out, relative to billing systems on a larger basis, customer care and technical support on a larger basis, so that when we determine those next markets that we think are viable, we will be ready to go, both on the network side, on the call center side, on the tech support side, on the handset side.

(multiple speakers)

I think your second question related to the balance sheet and the forward contracts.

Those contracts at the U.S.

Cellular level all mature in the May 2007 timeframe.

The Company's intention, at this point, is to deliver the underlying securities to settle the contracts.

So those will be settled out in May of 2007.

So beyond Q2, there won't be any fair-value adjustments related to the derivatives in the current statement of operations.

You will settle those out of cash?

I think you can do cash or shares.

No, I think we've said that we would settle them -- it's our intention currently to settle them by delivery of shares.

So there were several entries in the balance sheet in the press release on Page 7 regarding the question you just asked.

With respect to marketable equity securities (inaudible) current assets and a portion of the debt associated with those moving from long-term up to current -- so if you take a look at that balance sheet, I think that might help you with the numbers.

(OPERATOR INSTRUCTIONS).

Ric Prentiss.

A of couple questions for you and I apologize; I was getting cut off on the cell phone so I hope this has not been asked.

On the USF side, can you update us as far as how much USF you received at the U.S.

Cellular side and what your intelligence is telling you?

It seems like the joint board is getting ready to cap wireless or freeze wireless -- just kind of what your thoughts on USF are going forward and how it's addressed in your guidance?

Yes, for 2006, U.S.

Cellular had ETC -- you've said USF -- ETC receipts of about $70 million for the year.

In terms of go-forward guidance, you know, I would say a couple of things.

First, U.S.

Cellular does have petitions pending in a number of states for USF support, but obviously the timing of granting of those is very uncertain and it's especially uncertain now given the activities of the joint board.

So, in terms of forward guidance, we've not anticipated additional USF support beyond what we are currently receiving.

Okay, so the 70 million is in the guidance?

Yes, roughly speaking, yes.

Okay.

What are your thoughts as far as what you are hearing from your regulatory attorneys as far as where we might be seeing the outcome or when it might be resolved?

Well, I suspect we are hearing probably the same things that you are, that the joint board is considering the issue, there is some level of support or drive for putting a cap on wireless, but I think where that goes is very uncertain.

I don't think we would make a prediction on the outcome of that.

Then on the data revenue side, I think I heard you address some of it -- but can you talk a little bit about how it breaks down right now between how much is coming, say, from text messaging versus games or rings?

Just kind of what was your number?

I apologize; I got cut off.

What was your number for data ARPU and what's really driving that right now?

What we said was that data revenue is about 7% of total service revenues.

It was 217 million for the full year.

In terms of the breakdown, I don't have that number at the top of my head; I'm sorry.

Mark could get back to you with that number.

Okay, very good.

That was it.

I heard the 700; I was able to get back to the end of that.

So good luck, guys.

(OPERATOR INSTRUCTIONS).

Jennifer, if there are no more questions we will go ahead and finish up the call.

You do have a question from Serge --.

Serge?

Okay.

Good morning Serge.

Good morning.

Just a quick question -- I wanted as to you about the competitive environment on the wireline side, what are you seeing from cable companies and do you expect anything new in terms of competition in cable this year, what are the trends?

Bill, could you hear Serge's question?

Yes, hi.

I think what Serge asked was what was the level of competition on the wireline side and in particular, what was the change in outlook given the level of cable competition?

Right.

Well, the competition has picked up and you see it in our (inaudible) line lost numbers.

We reported a loss of 3%, and then it's a ramp up for us.

It's certainly less than our other wireline brethren had been reporting.

So it's a measure in some sense of the deferral that is indicative of the nature of our markets.

We tend to operate in more rural markets, so we have the benefit of some insulation in timing, if not in permanency.

In terms of what the cable companies are doing here, we see them moving from the double-play competition to triple-play.

A substantial number of our cable competitors are now offering voice in our markets, and it varies within individual markets and depending upon the demographics, how extensive their voice footprint is, so we are responding accordingly.

We are watching carefully and looking very intensively at the kinds of actions we can take to specifically combat that level of competition.

If you look at some of the specific actions we can take, you know churn goes down when we offer the double-play; it goes down even further when we offer the triple-play, so what can do about that?

Well, we are intensifying our partnership with DBS and we've watched very carefully the promotions at some the other wireline companies have offered in that regard.

In addition, you look at what has been called the gross adds problem, and that is, how do you get the people who have never taken your service.

We've watched very carefully how people have looked at this new [moose] (inaudible) transfer program first initiated by Citizens.

We've been in touch with the folks that have implemented this program and we intend to participate in that group along with them to capture the market that we have never had.

So we have a number of programs that we're giving up.

We anticipate that we're going to be able to effectively compete with the cable company offer.

All right, are there any other questions?

At this time, there are no further questions.

Okay, then we will go ahead and end the call.

Thank you, everybody, for joining us this morning.

This concludes today's conference call.

You may now disconnect.