MoffettNathanson Investor Conference

Good morning, everybody, and good morning to everyone who is joining us on the web this morning for day two of the Moffitt-Nathanson Media and Communications Conference. I am really excited to be joined by Steve Crony from Comcast. Comcast has been with us every year since we started this summit, but it's our first time together, Steve. So I want to start just because I think you come at the role of CEO for the connectivity and platforms business from an interesting perspective in that you've been both the chief operating officer and the chief financial officer. So tell us how those two different perspectives shape what it is you want to accomplish at C&P and the way you think about the turnaround that you're trying to achieve. You know, what are the things that you first saw that you wanted to, that you either saw or inherited that you wanted to change? Yep, sure. And first of all, thanks for having me. It's great to be here.

So, yeah, so I've been with the company for 35 years, spent the first 20 years on field operations, moved to headquarters the last 15 years. As you stated, spent quite a bit of time in the CFO role and about a year in the COO role. So know a lot about the business, know a lot about the company, but what was really important is had to bring a very different perspective, right? If you want to change the trajectory of the business, want to deliver different outcomes, I had to think about it through a very different lens. And the way I approached it about a year ago when I took over the COO role is I said, what if we were acquiring Comcast? Let me take it through that lens, a true challenger mentality, and went through everything, every process, every policy, all the operations, and just challenged everything that we did and said, why are we doing this? Should we continue to do it this way? And at the 50,000-foot level, I'd say the big three things that stood out to me were, first, we were not great at being honest with ourselves about our strengths, about our weaknesses, and I needed to really clearly define our reality, and that's the competition. That is how we go to market. That is the structure of the company. It's the talent within the company. our customer experience, really looking at things through that very different lens. Once I defined that reality, then it was about developing a North Star. What is the business that we need to become? I think that was something that wasn't very clear, and the team wasn't rallied around that. So how do we build that true North Star business we need to become? And then once you have that... And what is the business that you need to become? I think as you look at it, it is... I focus in three at the, once again, at the 50,000-foot level, focus on three core areas and one foundational area. it's the network. We have to have a much better network and develop differentiation with our network. Two is around the product side, really focused on Wi-Fi as the centerpiece, but how do

we make our products better together? So it's interesting. So you're defining the foundational

product as Wi-Fi rather than broadband. Absolutely. Wi-Fi, and then how do you make our products better when you have them together, better streaming experiences, better mobile experiences through the Wi-Fi. And then from a customer experience perspective, you know, satisfaction action is not enough. You have to build loyalty and advocacy, and how do you do that through personalization and simplification, taking customer effort out of the business. And then foundationally is our ways of working, and really looking at that, and, you know, we have to have a challenger mentality. You've got to think very differently, so really focused on what are the things we need to do to have that challenger mentality. So that's the North Star at the highest level. And then once, you know, we've developed the North Star, then it was about how do we go and execute? How do we align the organization? What are the very clear deliverables? I've spent the past four months, I've had 27 meetings talking to all of our leaders across the entire company on this is what we need to deliver, these are the objectives we need to deliver, and really focusing the team setting clear accountability, ownership, setting up the right KPIs and metrics, so then we focus on that.

That's an interesting one. I'm always fascinated by the KPIs and metrics that you managed to. Have you made them longer term or shorter term?

It's a mix of both. I think that's important you balance both. As we're rolling out 26 in the execution plan, they're definitely more short term, but we tie it into the North Star. Where do we have to take those over the next couple of years? So it's a balance of both.

Well, there's a lot there that we're going to return to over the course of our conversation this morning. Before we dig into the individual silos of what I was going to call broadband, but I'm going to retitle it now as Wi-Fi. But before we think about the standalone pieces of the business, one of the things we've been focused on in this conference is convergence. How central is the idea of convergence to your strategy, and why does it matter? So, you know, are you seeing customers think about convergence as a new product category, the connectivity everywhere? And how do you think about your competitive position in convergence?

I'd say it's core to our entire strategy and core to the North Star strategy that I talked about. And we are seeing purchase intent starting to pivot towards more. And is that something more than just I get a better price so I like the bundle? Or is it people are starting to conceptualize connectivity everywhere as a product? Yeah, I think it's both. I think there's a value component to the bundle when you put the two products together. But also it's differentiated experiences. that's a key part of this you know great example of that is you know when you connect our wi-fi with the xfinity mobile it's one gig download speeds that's differentiated product and we're continuing to try to differentiate the product so i think it's a combination of both um and we've really rallied the organization around it you know it's all about convergence it's that value proposition the differentiated experiences and and we have a very strong hand if you think about it we have 65 million passings in the footprint all have one gig plus speeds all have a broadband offering that's more than any of our competitors and we're pivoting that towards multi-gig symmetrical so you have that same ubiquity across 65 million homes we have the largest wi-fi network in the country and we offload about 90 of the traffic so once again creates that great experience like you said inside the home outside of the home and beyond that too is those differentiated experiences and the great wi-fi experience that we have as well we invest a lot in differentiating our wi-fi with open signal just came out of the report saying we have the most reliable wi-fi in our footprints you have the reliability piece you have the differentiated piece i talked about with the mobile boost differentiating that mobile experience we have you know all the features of control and coverage within the home as well so all that's very important and that creates a much better mobile experience and with the you know the 90 offload it enables a cost structure that where we can you know provide a great value to our customers and our pricing on mobile is about half of our competitors give or take so you know that works really well and then the customer experience is a huge part of this and we're continuing to invest and focus on the customer experience as well so overall we're well positioned when it comes to convergence and one of the core metrics that we look at is converged arpa you take your broadband revenues your mobile service revenues over broadband customers we're about 85 as it sits today roughly one half of where mobile ARPA is for our competitors so that's another huge opportunity for us as we go forward and then you know then you look to say in early early innings but you look at our first quarter results and you know we like what we saw we saw connects improve we saw voluntary disconnects improve our new packaging and pricing is resonating in a couple ways one is it's we're moving up tier and we're getting more customers in our gig products or best broadband product. With the equipment included, now we're getting more customers taking our gateways to get all these great experiences that I just talked about and that great Wi-Fi experience. We've seen our NPS move up the right way. So that's a leading indicator for future benefit. And our mobile attach has accelerated significantly. We had our best quarter ever in the first quarter with 435,000 line that adds. So we have what it takes. It's all about execution. And I own that. So I feel very confident.

And I would imagine that all of those things that you talked about, ARPA and mobile attach rate, and those things are KPIs that you are holding people accountable for and measuring people. Do you see, this is kind of the future view of convergence, I guess. Do you see your fiber competitors eventually sort of going back to the 90s, I like model of, you're competing against Fortress Verizon in the northeast, you're competing against Fortress AT&T in the south and the west, but that it really goes back to the way it used to be 30 years ago of sort of regional phone competitors?

I don't. I think we control what we control, and that's what I'm focused on. And to me, that's just about how do you create the best possible experience, bring the greatest value to customers, and hopefully you can knock down those walls. But are you seeing, for example,

are you seeing Verizon being the main competitor that you're up against now in the Northeast, or do you still think of it as, no, it's still FWA from T-Mobile?

I think we look at it all, right? It's a combination of fiber. It's a combination of fixed wireless. You know, satellite is coming into the market. So, yeah, we look at it all.

Let's talk about your go-to-market strategy in broadband or Wi-Fi. And one of the first things you did was simplify broadband pricing. How does the adoption of simplified national pricing for broadband position you in the long run? And is there any risk that that limits your flexibility to compete against regional competitors?

So when you look at it, it was essential. We were way too complex. And that complexity led to a lack of trust, a lack of transparency. So we had to make the pivot. And when you look at kind of how we're structured today, we have our value segment with Internet Essentials. And now we have four speed tiers that range from 300 megs up to 2 gigs. And for each of those tiers, we have three price points. We have a one-year, we have a five-year, and we have an everyday price. And that everyday price, we did adjust down. We were out of market, so now we're in market when it comes to that price. And also from a simplicity perspective, we included the gateway in the packaging. So all essential as we move forward. To the second part of your question, and then free mobile line as well, for anybody who takes our service, whether you're existing or a new customer. And then to the second part of your question, we've maintained our flexibility, and I would argue that we're actually even more effective. And the reason for that is, you know, over the past 18 months, we've done a really nice job leveraging our data in very different ways. We've created a lot of new data models, over 100 different data models. we have thousands of attributes internal and external that we leverage in those data models and what that enables us to do is really target whether it's markets particular parts of markets targets particular segments and as we really dig in that we and we run those models across acquisition upsell retention win back collection so we leverage that across the board so it makes us much more effective in a much more fiscally responsible way. And then secondarily is with the structural changes we made, we significantly improved our velocity. What used to take us kind of weeks to months to react, now it takes us days. So that's hugely beneficial as well.

So we're in a good spot there. So you saw a 117,000 subscriber year over year improvement in broadband net losses. About half of that was your legendary February, but half of that was sort of sustainable, repeatable. How much of that is coming from better connectivity that is gross ads, and how much of that is coming from lower voluntary churn, and where does lower voluntary churn stand relative to the

historic lows that you've seen? Yeah, so overall in the first quarter, we saw connect improvement, We saw voluntary disconnect improvement, and that's been really solid over time. We saw improvement in fiber footprints. We saw improvement in non-fiber footprints. So it was a very broad, so I haven't really focused on one particular metric. It was a broad improvement across the board. And as you mentioned, over 50% of that was tied into Legendary February. It was a fantastic moment for us, and we really leaned into that. But there is an organic component to this as well. And I go back to the new pricing and packaging. It was the biggest pivot we've made in the company's history when we did that last year. And that is resonating. And on top of that, we've done a much better job, a new chief growth officer. We have a much better job of messaging, much better job in our creative and telling our story. So that's helped that throughout.

Just think about the pricing for a second. the historically the the super low intro prices are obviously a magnet for accelerating gross ads the problem is those customers churn off the risk i think all of us saw when you went to everyday low pricing or or price locks and things is okay that will help churn a year from now two years from now as those low introductory rates would have rolled off but you're going to pay a price in new customer acquisition initially. Has it turned out that way?

The good news is we've moved up market. And the way we've priced it, as you know, is five years is a little more expensive than the one year as we look at that. So we were very pleased with the early results. And to your point, there will be benefits down the road tied to that packaging. And one other area to highlight that we have spent a lot of time on on top of the new pricing and packaging is we hired a new head of sales across the company. And we've seen an improvement in our sales effectiveness, you know, back to evaluating every part of the business. You know, we need to do a better job from a training perspective, our employees, from a compensation plan perspective, from a tooling perspective. So all of that has played into this as well.

And so give me one nugget of something that you changed for the sales channel that has made them more effective. I'd say we leaned into convergence and mobile a lot more through our training, through our compensation.

So it's first sell is try to get people onto the Converge platform. And going back to leveraging our data, leveraging our marketing tech stack, all of that weighs into that sales effectiveness as well. So we put a lot of time and effort into that.

So the intense competitive environment and that phrase, intense competitive environment, is something that we now hear all the time on every conference call. The broad characterization, I think, is fiber competing at the high end, FWA and maybe soon satellite competing at the price end of the market. What's priced into your stock price is that you will decline forever and that penetration is going to the 20s. Why is that wrong? help us give us a picture of where you think the market ultimately shakes out

I think first and foremost is we have to you know we are operating under the condition that fiber will continue to build now how you know how deep they take that we depended on their build economics and returns but fiber will continue to build fixed wireless will will continue to be aggressive obviously satellite will be in the market in some capacity so I think that that's essential I'd say good news is the back to the pricing and packaging and what we've done that is resonating and we're competing well on the low end with our 300 meg product competing well on the high end with our with our gig product but where we spend a lot of our time is focused on what's the end state and our belief is in the end state there's going to be two multi-gig providers to the side of the home and you know and obviously fixed wireless and and satellite will continue to be active so that's a bit of the end state and if you think about the end state you know we've competed with fiber for 20 years so we know they take share early you know over time both share and arpu come to kind of overall market norms so in equilibrium yeah yeah yeah exactly so we know that um from a fixed wireless perspective you know it's it's it's different what i'd say they did really really well is simplicity ease they did a great job there and that's a lot of what we've leaned into with all the investment we're making is how do we simplify make it easier for our customers to install to do business with us so big focus there and becomes very tactical as well as back to leveraging the data in all those modes how do you how do you go after the the value conscious customer leverage our performance win back is a big part of that um and then we look at satellite i think everything everybody doing is going to benefit us against satellite i'd say in reference to you know fixed wireless and satellite um you you know, our network is, you know, by far exceeds what they have, and they are capacity constrained. So if you look at that, for me, you know, the more bits, the better. We want usage, and usage is up 10%. You know, overall for our broadband-only customers, upstream is up even more. When you look at the usage patterns, you know, it used to be we know certain nights of the week or certain times. Now it's very, it's driven by gaming, you know, new gaming launches, sporting events. it's very choppy which I think it benefits us as well so you know we have this great great advantage and opportunity with our network so you know to answer your question the end state I mean we feel good we've competed with fiber for a long time and it's just continuing to differentiate ourselves once again the wi-fi experience the network all of that make sure that we're competitive from a pricing and packaging perspective better customer experience we know increased mps scores leads to less churn, and then the mobile component of this all. The convergence and the value proposition tied to mobile is essential as we go forward.

So you've called 2026 an investment year for broadband. Part of that was you didn't take a price increase this year. Is 27 a return to normal, and is 3% to 4% ARPU growth long-term, which used to be your north star for how to think about ARPU growth for the standalone product? Is that still the right way to think about it?

So as you step back, back to the point, we were not competitive in the market. Not only were we complex, we were not competitive from a price perspective in the marketplace. So it was essential that we did what we had to do. You go back to when we did that mid-last year, we said we'd feel pressure on ARPU as we'd turn into the new year, some incremental pressure in the second quarter, and then we'd start to see relief as we come out of the year. And the big drivers of that were what you touched on. and the piece of it was we didn't take the rate increase. Secondarily was the free wireless lines and the way accounting recognition works that impacts broadband ARPU. And then the third is some additional transactional activity from our base as people moved into the new packages. So you step back and say, okay, now let's look forward. What do we have is one, that incremental transactional activity will lap itself. And over time, to the point you made earlier, should actually start to diminish because more people are locked in. Two, we have flexibility on pricing, so we maintain that flexibility as we go forward. A big, big part of it is on the mobile free lines. So when you look at the mobile free lines, where early cohorts are starting to happen, but we're seeing the significant majority of those customers' role, that becomes accretive to broadband as well. And even just having more mobile in general becomes accretive over time, just as we sell on new services, et cetera. So there's a lot there. And then, like I said, the mix has shifted as we sold into our new pricing and packaging. So we're selling more gig tiers, you know, over 40% now. So that's another benefit as we go forward. So, you know, I think it will continue to move. And as I touched on this concept of converged ARPA, one big component of that is broadband and the broadband revenue. But another big component is, how do we improve our sell-in to new customers, to our existing broadband base? How do we improve sell-in of more mobile lines to our existing mobile customers? Last two quarters, 30% of our line that adds came from existing mobile customers, adding more lines.

The point that you made about your ARPA is half of what the mobile-only ARPA is for your competitors speaks to some of that is the introductory discounts, but most of that is just you've got fewer lines per account. And lower penetration, yeah. Yeah, and so how are you thinking about raising not just the attach rate but also the number of lines per account?

Yeah, so I'd say the one thing that's been great about the free line offering, you know, being transparent, I wish we would have done it sooner, but, you know, we're in that game now. So what it does is it allows our customers to test out the product, and it drives awareness with the product. But like I said, once we get the folks in, we spend a lot of our time on lifecycle management, those free lines. And like I said, in the early cohorts, a significant majority of the customers are rolling to pay.

Yeah, I was going to say, those customers who are rolling to pay, are you seeing any particular churn issues with those customers?

And we feel, and one of the big components of that is, you think about it, they're rolling from zero, but they're rolling to $30, $40. Which is still less than anything that they can get. Exactly, about half of what else they can get. And you go back into the old days when we had the low broadband offers and we were rolling DDPs that are well above market. We saw that churn and we saw that pain. We're not seeing that as much. But back to the point of, as we manage that lifecycle management, we're looking at porting, we're looking at usage, we're looking at how many customers are in equipment installment plans. We're looking at the premium selling. Our premium product is fantastic. And a big, big one is those incremental number of lines. And as I said, to take 30% of our record-setting mobile line that adds are coming from existing mobile customers adding more. So once they get in with the free line, then they say, hey, I'm bringing my next line. Yeah, I was going to say, so is that the dynamic you're seeing?

It's a kind of let me try it out, make sure the water's warm, and then if it is, I'll bring my kids and my spouse and the rest of the family.

Exactly, the VIPs are up.

Yeah, exactly right. The day before you reported results, you introduced new mobile plans, and, for example, they included device insurance, which is an interesting wrinkle. It's a profit center for some that is a profit pool that you can attack. Is that resonating with customers? What kind of response have you seen from customers so far?

So if you take a step back and you go back about a year, we knew there was a big TAM in the premium marketplace, and we just didn't have the right product. We didn't have the feature-rich product that people are looking for. So about a year ago, we introduced our premium unlimited product, and that was you get the 1 gig download speeds, but you get 4K streaming, anytime device upgrades, simplified international plans, and we got to about 30% sound. So we were really pleased. it was you know well above what we had modeled and then we said okay how do we further disrupt that how we drive more of that premium penetration you know there's benefits of that from a term perspective from a from a revenue perspective and we said you know what no one has ever done this let's include device protection and we think you know a good chunk of our competitors uh customers take a device protection plan probably in the 10 to 20 range that's incremental value for our customers and another way to position that product so it just it just you know just came out but you our expectation is that we improve upon that 30% number.

Can you say what the sell-in rate is for new gross ads into your broadband product? What percentage of them are taking wireless along with the broadband?

Yeah, I've got to look at Marcy on that one. I don't think we've talked about that one yet, so I'll go there specifically. You haven't said that. But obviously it's improving.

Yeah, because your overall market share is still in the mid-single digits. And we've looked at the share of gross ads, making assumptions about churn, would say your share of gross ads is in the 20% range. So there's a long runway there. And the question is sort of are you seeing that at the front edge of gross connection?

And I would say when we released 16% of our broadband customers have mobile. If you take it down to mobile lines in our footprint, we're probably about 6%, 6.5%. So we have a massive runway. And that's what we're focused on.

So your predecessor, when I would be on the stage with Dave over the last 10 years, it was pretty clear that he viewed broadband more as a defensive strategy to protect, sorry, wireless, more as a defensive strategy to protect broadband than as a revenue-generating opportunity in itself. It's obviously both, but what do you see it as first? Is this first and foremost playing offense and trying to grow the revenues of the business by adding a new product line? Or is it primarily about trying to protect the broadband business? I'd say unequivocally it's about playing offense.

It's our number one priority as we push forward. And it's standalone. It's a firmly profitable product. So we had a couple of options. One is you can, you know, maximize the short-term profitability, or we can invest some of the profitability, you know, to create the value that we've created, to drive mobile lines, to create a much better mobile converged experience. And with a roughly $200 billion TAM in the mobile space, you know, we've definitely chosen the latter. We're going to make those investments as we move forward.

And as it relates to the profitability of the product, obviously a big part of the profitability is how much of the traffic you can offload onto Wi-Fi and how much of the traffic you can offload onto CBRX. Can you just talk about those two things and the progress and the vision that you have for those two things?

So we've said about 90% is offloaded onto Wi-Fi. As I mentioned before, we're the nation's largest Wi-Fi network, and it creates a much better experience for our customers, back to the one gig of download speed when you attach to our Wi-Fi. And then we do have many markets up with CBRS, and we look at that once again on just a cost of build, and does it make sense, and based on the densities, et cetera, but that's some additional offload that's included in the overall 90% number.

And where does that fit in your priority stack? Because I have a question coming up about your network upgrades. but there are obviously issues of just how much labor you have and what do you tell them to do first. Where does CBRS fit in the priorities?

I think we look at it, you know, if there's a great return on it, we'll go ahead and put up some, you know, cell site. But if not, it's all balanced across the broader piece. But I would say the general overall network evolution is prioritized over CBRS because our offload is so good on Wi-Fi.

And I realized I characterized it wrong in that I called it offload, and I think one of the things that you guys have done a good job at is articulating a strategy that it's not offload. It's Wi-Fi first, and it's the component that goes over the cellular network that is the offload.

You're exactly right. That's the way we look at it, kind of the inside and outside of the home. But I think we're... And then in addition on the cost, you get that cost benefit, and then we're selling to our existing broadband customers. So the cost of that is less expensive, and that's what's enabled us to create this great value proposition at about half the rate of our competitors.

Do you have a vision where you have CBRS strand-mounted small cells sort of ubiquitously across your denser markets so that it really...

Yeah, I don't know that we fully get it. It totally depends on that because the Wi-Fi offload is so good, so does it add the extra value that we want? We assess on a case-by-case basis. Let's talk about video for a second.

Your video subscriber losses have eased, but you're still contracting at a 9.5% annual rate. Charter's gotten that down to 1.3% rate of decline, so something that I think most of the people in the room never would have thought was possible to see again. Is there a reason you haven't replicated that kind of offering of the free streaming services along with the traditional video packages? Or is it simply a matter of timing and your programming agreements and that you'll get there along the way?

I think the way we look at it is, you know, it's convergence first. And obviously for a segment of the market, video is very relevant. But we focus more on giving our customers optionality and control. So when you look at it, you know, we've simplified our video packages just as we have with our broadband packages. So we have, you know, some skinnier bundles in our now construct, and then we have four linear packages that now have fees in the primary set-top box included. Underneath that, though, we've really leaned into bundling of apps. So we had one we call Stream Saver app. We now have 12, and it includes anywhere between three, four, and five apps and mixes of those in those bundles, but provides a value to the customer of about 25% to 40%. So once you come back to this optionality and give them the customer choice, but we also make that available not only to our video customers but to our broadband customers as well. So it's another value component with broadband. And when you think about Wi-Fi, you know, creating a great Wi-Fi streaming experience, 4K, et cetera. So we provide that optionality. So I think when you really think about it, we always look at profitability by every one of our products and where we want to invest and what drives the biggest benefit for broadband and for mobile. And that's how we look at it.

I would imagine the churn rate of customers who are in those video packages, their broadband churn rate is meaningfully lower.

Is that fair to assume?

So it sort of works the same way as wireless does, that the deeper the relationship, the better the churn rate.

And what we have seen is, like you said, we have seen improvement. We had over 100,000 better in the first quarter, and I think it was our best first quarter since the first quarter of 2019. So it's moving in the right direction, just a different approach.

Business services never quite gets the attention it deserves. There's always been a fair amount of attention and acknowledgement of your SMB business, but you're still reasonably new in the enterprise market. Can you just talk about the enterprise market for a second? And if I think about all the connectivity opportunities that are arising in data centers and what have you, how are you competing in that and even thinking about positioning for edge inference and for AI and that sort of thing? That's crazy.

So, amen. I agree with you 100% that it's undervalued. If you think about our overall business services segment, $10 billion of revenue, roughly $60 billion marketplace, it's approaching 25% of our connectivity revenues, running at a 55% margin, and we've been significantly outperforming our competitors and peers when it comes to growth. And to your point, you know, SMB, we're the, you know, largest provider of SMB businesses in the country. To your point, where a lot of the momentum and growth is coming in is in the mid-market and enterprise space. And what we're really focused on there is selling solutions. Connectivity is foundational, but it's selling solutions. And one of the metrics we look at is for every dollar of connectivity, we now sell in 70 cents of solutions. If you go back a few years, it was one-third of that. so it's a big area of focus and that's where we spend a lot of our time innovating you know we've taken on smaller acquisitions along the way to fill either whether it's capabilities or you know products that we don't have masergy nitel examples of that so we're going to continue to drive that forward and our goal there is to take a you know much bigger share of the you know the fortune 500's uh communication spend and we do serve most of those customers so we we have an opportunity to to take more of that spend. To the second part of your question, we're looking at a lot of different options. So I think that our network and the intelligence we built in the network and how we built our network, along with, we have thousands of edge facilities, hubs and head ends and along the way. So that provides a great opportunity to your point to provide, bring AI solutions closer to the customer, provide different experiences for our customers tied into that. So it's an area we're leaning into, similar with data centers and connectivity to the data center so we're spending a lot of time in that space but we do think that's gonna be a big

opportunity for us as we move forward. You just talked about the opportunity created by the the infrastructure in the plant. If I just look at your stock prices the market believes that your infrastructure is inferior and that ultimately I guess the narrative would be that you're gonna have to eventually upgrade to fiber and HFC is going to come to the end of its life cycle. Why is that wrong?

Yeah, so what I would say is if you really look at our end state, you know, full duplex DOCSIS 4.0, there isn't anything of fiber, you know, fiber comparatively that we can from a network perspective. And you look at our network overall, it'll be ubiquitous. There's flexibility in the network, intelligence in the network. It still has active devices, which is really important as we go forward, and you look at overall total cost of ownership, we're in a really good spot. You start with capital, it costs about $200 a passing, so what, one-seventh or one-tenth of a fiber passing as you get the drop to the side of the home. From an operating expense perspective, maybe $1 to $2 more, but we'll take that trade-off any day because that's the power going to the active devices, and those active devices enable the intelligence that we're putting into the network. And core to that intelligence is, if you think about it, our nodes, our amplifiers, all the way down to the gateway, AI-capable chips, and the telemetry we can build upon that. We fully virtualize the network as well. So we're looking at self-healing that's going on.

And it's really important for repair and maintenance.

And you look at being proactive with our customers. And we can predict much better than we ever have. So you look at some of the early metrics on our end state. You know, trouble calls are down 15%. Our time to repair is down 35%. We know exactly where the issue is. Impaired devices on the network is down 50% because we can get ahead of that and work the plant. So there's a lot of power in that. And then, you know, with all that, the AI that's in the network, just being able to optimize the experience, the Wi-Fi experience, all the way down to the customer level. So there's a tremendous amount of value and power in that. So I think, you know, but, you know, we're 60% of the way there as we sit here today, less on the end state.

And that's just with the split strategy, but not with DOCSIS 4.0.

And that DOCSIS 4.0 deployments are starting to accelerate. So you have the amplifiers, we're kind of the long pole in the tent. We now have those, so we're out enabling that back to our mid splits, as well as anything new that we're building. So as we get to scale, then we'll finally be able to market. We'll market multi-gig symmetrical. We'll be able to market the intelligence. We'll be able to market the low latency. All these things that we have yet to be able to do, which will happen as we get through the end of this year.

So I'm always fascinated in finding naturally occurring experiments that sort of point the direction of where we're going. You have a lot of your plant, like every cable operator does, that's FTTH already, where you've been doing edge-outs and rural bills.

Most of the plant is fiber as well, which is not the drop, right?

Yeah, so do you see, if I think of the three cohorts of already finished with the mid-splits, already FTTH because it was built after a storm or what have you, and then the rest of your plant, are you seeing real differences in the way customers think about those geographies?

Not so much as we sit here today, And I think a lot of it is we just haven't marketed the capabilities. And so do the customers know? Obviously, we let them know that, hey, the Midsplit here, you've got additional downloads. So there's some slight benefits there, but it's going to be as we get out into market. That's where it's going to really take hold.

The last question, I guess, is the one that everybody is most focused on, which is just when can you grow again and how can you grow again? And make the case for how Comcast returns to being a growing business, or at least C&P returns to a growing business.

So we've talked about it before. We're in a deliberate investment cycle, right? So we invested in a lot of rate to become much more competitive in that space. We've invested a lot on the expense side as well, from a customer experience perspective, a product perspective, a go-to-market strategy perspective. So, you know, all of that with time will lap. But if you look at the fundamentals and the foundation is tremendous demand for broadband, right? That usage continues to grow. It's essential in people's lives and, you know, intermingled the terms, but, you know, really around that Wi-Fi experience in the home. So that's a big positive for us. And then you look at our converge strategy. We have a tremendous value proposition differentiated both on price but also on the experience and what we bring with Wi-Fi and how we can differentiate that mobile experience and differentiate other products in the home with the great Wi-Fi experiences that we've created. Business services we touched on, $10 billion business, great runway for growth. We're proving that we are growing in that space. So that's another significant opportunity for us. Tied in the convergence piece is mobile. Continue to penetrate mobile. And as we talked about, you add more lines in, you add more premium services in. So you have a huge benefit coming in from mobile. Another one we haven't talked a lot about, but I've focused on as we came in, is we're doing a better job of leveraging the totality of the company. Matt Strauss, who is the CEO of NBC Media, and I have been working very, very closely together on a project we call Harmony. It's an always-on approach just to leverage all the assets within the company. You saw that a little bit with Legendary February. Yeah, I was going to say, Legendary February is an interesting proof point. And just all the impressions we got and how we can leverage data in different ways. So there's value in that. And then from a cost perspective, right, is we're improving the experience and all these things we're doing from a network perspective. That's taking costs out of the business. You're going to have that as a tailwind as well. And we're continuing to look at the structure of the company and just, you know, continuing to gain efficiencies and building more effectiveness along the way as well. So, you know, there's a lot there. We have a great hand, and it goes back to we just need to execute, but I'm confident we'll get there.

Well, it's a good place to end it. I thank you for spending the time with us this morning, and I think all of us wish you great success in your new role and with the turnaround that you're trying to pull off.

Well, thank you. I appreciate you having me here, Craig.

Great time. Thank you.