Comcast Corporation
Q4 2019 Earnings Call Transcript

Published: 23 Jan 2020

[Operator:]

Good morning, ladies and gentlemen, and welcome to Comcast's Fourth Quarter and Full Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that this conference call is being recorded. I will now turn the call over to Senior Vice President, Investor Relations and Finance, Mr. Jason Armstrong. Please go ahead, Mr. Armstrong.

[Jason Armstrong:]

Thank you, operator, and welcome everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanagh, Steve Burke, Dave Watson, and Jeremy Darroch. Brian and Mike will make formal remarks; and Steve, Dave, and Jeremy will also be available for Q&A. As always, let me now refer you to slide number 2 which contains our Safe Harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, in this call, we will refer to certain non-GAAP financial measures. Please refer to our 8-K and trending schedules for the reconciliations of non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

[Brian Roberts:]

Good morning, everyone. Before we get to the results, I'd like to embarrass our friend Jason Armstrong just for a moment and thank you for your incredible hard work these past six years as Head of Investor Relations. And on behalf of everyone at Comcast and I believe all the investors say thanks for a great run and we wish you terrific success in your new role as group Chief Financial Officer of Sky. Also I'd like to welcome Marci Ryvicker who's joining to take over Investor Relations. Marci's got a talented and successful past and welcome to Comcast. 2019 was a busy productive and exciting year for our company; capped off by a strong fourth quarter and we've already jumped right into 2020 with the debut of our exciting new streaming service Peacock. As you heard last week, it's a truly differentiated approach to streaming that leverages capabilities from all across our company. As we look to the future, I am confident that the company we have built has all the necessary components to succeed and our guiding principles remain the same. The leaders in our markets continuously improve our products and experiences and build deep highly valuable recurring customer relationships. Our world-class teams are executing and operating at a high level all of which allows us to invest in our businesses and deliver consistent results. The success of our strategy is demonstrated in our consolidated financial performance. We delivered another year of terrific results with growth in pro forma EBITDA of 5.9%, record free cash flow generation of $13.4 billion, growth in adjusted EPS of 14.7%, the 10th year of double-digit growth in the last 11 years. These results were driven by Cable as the team successful pivot to a connectivity-centric strategy and investment in xFi continue to pay off. Cable delivered broadband net additions of 1.4 million, the best in the last 12 years, finishing off with an exceptional fourth quarter which included 442,000 net additions, a 26% increase over the prior year.

[Mike Cavanagh:]

Thanks, Brian, and good morning, everyone. I'll begin by reviewing our consolidated results on Slides 4 and 5. As a reminder, we completed our acquisition of Sky in the fourth quarter of 2018. Our reported results includes Sky from the acquisition date while pro forma results are as if the Sky transaction had occurred on January 1, 2017. Revenue increased 2% to $28.4 billion on a reported basis and was consistent with the prior year on a pro forma basis for the fourth quarter. For the full year, revenue increased 15% to $108.9 billion on a reported basis and was consistent with the prior year on a pro forma basis. Adjusted EBITDA increased 3% to $8.4 billion on a reported basis and 2.1% on a pro forma basis for the fourth quarter and increased 14% to $34.3 billion on a reported basis and 5.9% on a pro forma basis for the full year. Adjusted earnings per share increased 9.7% to $0.79 for the quarter and 15% to $3.13 for the year. Finally, free cash flow was $2.5 billion in the quarter and $13.4 billion for the full year. Now let's turn to our segment results starting with Cable Communications on slide six. For the full year, Cable revenue increased 3.7%, EBITDA increased 7.3% and net cash flow increased 18%. Total customer relationships grew by 1.1 million to 31.5 million, an increase of 3.7% year-over-year. On a per relationship basis, EBITDA grew 3.5% and net cash flow grew 14%. For the fourth quarter, Cable revenue increased 2.6% to $14.8 billion, EBITDA increased 5.4% to $5.9 billion and net cash flow increased 13% to $3.3 billion. We generated 372,000 customer relationship net additions in the quarter, a record for any quarter. These results reflect our commitment to innovation, execution and driving profitable growth, including our continued focus on our high-margin connectivity businesses, residential high-speed internet and business services. Together residential and business services generated 442, 000 broadband customer net additions in the quarter and 1.4 million net additions for the full year. In fact, on the residential side of the business, high-speed internet revenue was the largest contributor to year-over-year growth at Cable, growing 8.8% in the fourth quarter and 9.4% for the full year. We believe that our consistent and ongoing investment to extend our leadership in broadband through speed, coverage, control and now streaming, as well as through security and privacy is unique among our competitors and across the industry. We will continue to benefit from the growth in the overall market for broadband and we are taking share with a superior product.

[Jason Armstrong:]

Thanks, Mike. Let's open up the call for Q&A please.

[Operator:]

Thank you. We will now begin the question-and-answer session. Our first question comes from the line of Ben Swinburne with Morgan Stanley. Please go ahead.

[Ben Swinburne:]

Thanks. Good morning. Two questions. Brian you mentioned in your prepared remarks sort of the benefits of global scale across the company. And I think there's certainly a debate in the market about that a bit. So, I was curious if you could sort of touch on it in two ways. One, how does this scale out Comcast to grow faster over time? Obviously, we've seen some very strong results across the company recently, but I'd love to get more thoughts from you on how that plays out? And secondly, how do you assess sort of the optimal level of scale? I'm sure there's a lot of interest from shareholders about where you think about future acquisition opportunities? Or how you think about deploying capital longer term? And then while you think about that Mike you mentioned some comments about free cash flow at a conference last year. Comcast delivers pretty consistent double-digit earnings growth and you've raised the dividend consistently double-digits. Should free cash flow over time generally follow earnings and the overall dividend growth? Because obviously you guys are in a pretty heavy investment year this year and I think people are obviously interested in the free cash flow profile over time. Thank you. Thank you, both.

[Brian Roberts:]

Well, let me begin. Thank you, Ben. I do think we have consistent growth across all parts of the business Sky was a unique asset. And I don't want to look backwards more than just for a moment here to your question. And I think it happened. I'm really thrilled we bought it. I feel better about that decision today the nature of our company; we displayed a great technical team at the Peacock Day, the ability for Cable to help with broadband, Jason going over to be CFO. The gentleman running Germany, who is our Head of Strategy there's -- it's -- we're a better company. And it's a longer conversation, happy to have it. But I think the essence of your question if I might -- might be well do you feel you have to go to other countries and what are you thinking about? And one of the points we tried to make throughout this year is that if you take the four countries; U.S. plus the three principal U.K., Germany, and Italy where Sky principally operates, that represents 50% of the world's broadband and video revenues and that's pretty extraordinary. So, our strategy with now $60 million or $55 million or so relationships and growing those relationships and we had a great year in growing customer relationships with a terrific ARPU north of $100 these are exceptional opportunities. So, I don't want to say we won't look at other things and consider other things but it's -- there was nothing quite like Sky. It was unique. Mike?

[Mike Cavanagh:]

So, Ben on free cash flow, it's certainly our stated objective and belief that we can healthy -- get healthy growth of free cash flow over the long-term. Said that before at the recent conference and continue to believe that's the case. We don't focus on it on -- in the near-term and this year coming up obviously we talked about the many investments in organic growth that will benefit that long-term free cash flow growth trajectory. So, we'll have that pressure in some Olympics working capital in 2020. But the dividend increase is absolutely an indication that we feel very confident in the long-term growth trajectory of free cash flow.

[Ben Swinburne:]

Thank you, guys.

[Jason Armstrong:]

Thanks, Ben. Next question please.

[Operator:]

Your next question comes from the line of the Doug Mitchelson with Credit Suisse. Please go ahead.

[Doug Mitchelson:]

Thanks so much. I wanted to focus on streaming so both Flex and Peacock. For Mike or Dave with -- Mike, you talked about prioritizing Flex in 2020, sort of, what specifically does that mean? And for you both what's your vision as to what that service will look like in a few years? And I guess I'm thinking not just your everything that you bring to bear but also third-party apps and how they're authenticated integrated into Flex as well? And then for Steve on Peacock, I think the Peacock Analyst Day was well received but I'm getting the question a lot as to what the difference will be between the premium and free tiers? And I'm also getting the question that if it's free what would the friction be signing up other distributors other than Cox? Thank you all.

[Dave Watson:]

Hey Doug this is Dave. So let me start with Flex. And I think Flex shows and in particular the Flex and Peacock combination just shows how uniquely positioned we are for streaming. And Flex is a natural extension of two things; our broadband innovation and also the fact that we've been investing steadily in X1. So we're -- Flex is going to help fuel broadband over time. Comes with it's free as Brian has said and we'll continue to innovate around broadband. So you look at what's coming up. And we have tons of apps that are available right now. We're pleased with the road map ahead, good progress coming up for Flex in terms of content, Hulu, we talked about CBS All Access we'll be the first to do that. But we in particular we're really excited about the prospects of Flex and Peacock together. So that's -- that is I think a real opportunity. In addition down the road and of course the main consideration is broadband growth with Flex. But I think it opens up other opportunities whether it's app participation or -- and/or advertising. It's a great long-term platform for us.

[Mike Cavanagh:]

So if you include Dave's broadband business plus Flex and Peacock, I think our company is better positioned as the world moves to streaming than any other company in the world. And I think you could argue in the next 10 or 20 years, if you look at all those three businesses combined, we could make more money in streaming than anyone else by a lot. If you then move to Peacock, the idea behind Peacock and Matt Strauss mentioned Spotify. It's a little bit like Spotify. We have an entry level of Peacock, which is about 7,500 hours, which is completely free for anyone. We then have a 15,000 hour version of Peacock that costs $5 if you're not a member of a participating cable or satellite company that provides multi-channel video. That universe is still about 80%. So 80% of the people in America I think eventually are going to be able to get that $5 product for free. As to your question about other cable companies and satellite companies it's such a great value to be able to give all of your customers a product that's $5 a month in value or $60 a year for free that I think eventually we will get the vast majority if not all of cable and satellite it will take some time. And a lot of times the Peacock discussion will be tied to the ongoing MVPD discussion and we have a lot of big deals up in this year. But I think by the end of this year, you're going to see the $5 Peacock product be offered for free to a lot of cable and satellite customers.

[Doug Mitchelson:]

Thank you both.

[Jason Armstrong:]

Thank you, Doug. Next question, please?

[Operator:]

Your next question comes from the line of Jessica Ehrlich with Bank of America. Please go ahead.

[Jessica Ehrlich:]

Thanks. I have I guess three questions for the three divisions. On Peacock, can you talk a little bit about how you see – what will the impact be on your legacy businesses including TV stations, Cable Networks and I guess other Comcast businesses? Going back to Flex, it's such an interesting product. You're keeping customers engaged on the Comcast platform. Can you talk about a little bit more detail about what the benefits would be for I mean, it seems like there might be benefits for advertising as well as other parts of your business? And then on Sky this $300 million or so step-up in investment, can you talk about how that will drive growth in the various businesses in 2020 and beyond? If there's anything more specific you can say about growth? That would be great.

[Brian Roberts:]

Let me start with Peacock's effect on the other businesses. If you imagine a television show where 70% of the viewing comes from some place other than linear television. What Peacock is designed to do is to go after that 70% get it on our platform in a place where we're ad-supported and we get 100% of the ad revenue. That's the intent. And if you look at it from that perspective, I think Peacock is going to be very good for our company. We're going to make more money from the television ecosystem and that will allow us to continue to invest in the linear platform. So if I were talking to an affiliate, if I were talking to a cable company, I would say Peacock is a way to make us a better stronger competitor in a way that's good for all of our businesses not just streaming.

[Mike Cavanagh:]

So in regards to Flex, Jessica, the – it starts with our strategy. And I think it gives us real choice in the marketplace. And we will continue to compete I think very well for the many segments that value X1 and everything that that brings. But for this growing streaming segment, it really positions us well. It's a great proposition being able to use all the attributes of X1, the voice capability, the integrated data being able to find what you want very quickly. So in terms of the drivers, your point is a good one. You look at the first one is going to help us compete – continue to do well with broadband. So we're going to look at broadband share growth and Flex will be part of that one of several things that we're doing. You do look at additional revenue opportunities, whether it's everything from the – when we sell an app on this platform we participate in that economically. There is going to be a long-term a platform. You can think about advertising. And in addition there's syndication. We have great partners that we have with X1. And I would anticipate that we'll continue to make progress in syndication with Flex with these partners. So I think it's – we will use it as a growth platform primarily focused on broadband but we'll be opportunistic going forward in these other areas?

[Dave Watson:]

Yes, sorry. And then on Sky, the investments we're making here. So Sky Q look we think that's the best TV service here in Europe. So we want to accelerate its penetration in our base. We're actually pulling costs forward really rather than spending additional cost – pulling costs for in our plan to get Sky Q penetration more quickly. The benefit is really a twofold the short-term benefits or purely financial really. As Mike alluded to we see lower churn, higher viewing, higher ARPU. And of course as we sell Sky Q into our customer base basically gives us the opportunity to cross-sell another product or more products at the point in which we do that. And then the second thing to say is, we had Sky Q in the base now for some – good line of sight in terms of the financial returns that flow from those investments and whilst the number aggregate, so it's all customer by customer. So if you don't get the customer from the – if you look at the benefits, you don't get -- you don't spend the cost up front. If you see what I mean. The second one that is broadband in Italy. Obviously, that's a big new adjacent category for us, about a $7 billion market in Italy. We've got a very strong and credible brand. We know that, in Italy, to step into the broadband market. I think, we've got all the skills that we need across the company to be able to do that. The longer-term investment profile, a very strong one again, given that it's a new category. And then, beyond that, I think, the real benefit, as we've seen here in the U.K. is that's a business that we think we can grow the significant scale over time. It was probably the single biggest thing we did in the U.K. to step change our business growth in the U.K. So I think the tail of growth we'll see from broadband and the ability for broadband to reset the size of our business in Italy is pretty strong. And then, the final thing I'd say, just operating in Europe. One of the great things about being part of the broader Comcast group, from my point of view, is of course we can keep our foot on the gas and accelerate these investments while we see strong returns profiles at a time when many in Europe are probably being a bit more cautious in a more challenging consumer environment. So, I think, this is a good example of how, as part of the broader group we can really think about the medium-term returns from Sky and drive those hard. And we'll see those benefits progressively come through in 2020 then into 2021.

[Jessica Ehrlich:]

Thank you.

[Jason Armstrong:]

Thank you, Jessica. Next question, please.

[Operator:]

Your next question comes from the line of John Hodulik with UBS. Please go ahead.

[John Hodulik:]

Great, thanks. Maybe some questions for Dave. Dave, you've had some solid results this quarter and this year in your connectivity businesses, maybe first starting with broadband. The 1.4 million subs accelerated second time in a row on a year-over-year basis. Is that a decent number for 2020? And can you talk a little bit about the pricing power that you may have in that business, given that the deceleration we're seeing in high-speed data revenues. And then, over in wireless, again, another solid quarter. You talked about momentum continuing into 2020. What's driving the growth there? Is it improved distribution? Is it handset availability? I think your pricing has been the same, but the sub numbers continue to beat our view. So some commentary there would be great too. Thanks.

[Dave Watson:]

Well, thanks John. And I won't give the specifics in regards to 2020. But I would say that the $1.4 million does demonstrate just consistency, broad-based growth strength across our entire area when it comes to broadband. So, pleased with the quarter, pleased with the year and pleased with momentum going forward. So, yeah, it starts with that we're going to grow relationships with broadband. This is our top priority. It's what we focus on when it comes to innovation. I talked about Flex that we have many other examples of innovation, including the advanced security product that we are rolling out for free to those that lease our gateway device. Another example of that, speed increases we continue to do. So very, very focused. We wake up every day thinking about how are we going to grow and sustain broadband. And so – and it's working. I think xFi, when you combine the best of speed, the best of control, coverage, Brian mentioned a great new gateway device. We're leading in regards to the gateway devices that are in the marketplace. We feel in terms of the combination of speed, Wi-Fi speed and Wi-Fi coverage and combine that with the pods that we have in the marketplace. So all these things, I think, position us well going forward. So, our game plan is to continue to lead with broadband. I think it is very sustainable. You look at the macro conditions the marketplace is growing. On penetration we have upside and we're taking share. So, -- and we're balancing this share growth with strong financial performance. For the year, we're pleased. One point in terms of the quarter-to-quarter revenue performance just to make sure there's some context there that we did move out a couple of rate increases of Q4 into the early part of 2020. So, if you look on a go-forward basis, I think you're going to see good strong runway for growth in share, growth in revenue on a per subscriber basis and for the whole category. So, real pleased with our momentum going forward. In Wireless I would say the keys there are a little bit of maturity. We talked about the reasons why we're doing it. We're real pleased with broadband retention. The area that's beginning to pick up that we're really pleased that we wanted to focus on is just growing consideration using wireless because I think it does help broadband. But getting people into retail stores they didn't really think about doing that think about doing that before beginning to see real traction in retail. Most certainly when you see a solid product introduction like Apple that they had in other wireless devices, I think we benefit. We're in a good position for bringing your own device. I think we're uniquely positioned in the ability to have a combination of unlimited and by the gig pricing, so you add all those things up and we're really pleased with our overall wireless momentum as well.

[John Hodulik:]

Okay. Thanks Dave.

[Dave Watson:]

Thank you, John. Next question, please.

[Operator:]

Your next question comes from the line of Brett Feldman with Goldman Sachs. Please go ahead.

[Brett Feldman:]

Thanks. Actually I'm going to follow-up here on Wireless. Two questions. One the big national auditors are going to be increasingly making 5G a part of their marketing throughout the year. I'm interested if you can give us some context on how you're thinking about the 5G opportunity for your mobile business? And then obviously the lines that you have to EBITDA breakeven next year is a key milestone. How do you think about maybe improving the profit profile of your wireless business even more from there? So for example how much of a priority if at all? Is it to get better MVNO terms or find more MVNO vendors? And then you're going to have a few mid-band spectrum auctions coming up over the next couple of months and into next year. Are you interested in maybe looking to acquire spectrum to see if you can bring traffic onto your own infrastructure? Thank you.

[Brian Roberts:]

Well thanks Brett. So, in regards to 5G, one of the great things about our existing relationship that we have with our partner that we have we will participate in 5G mobile as that market matures and they've start rolling it out in earnest. So, we're -- I think we'll be right there. And we'll evaluate that as it goes. In regards to economics, we talked about -- we're right on track with the profitability trajectory that we talked about. So, we're absolutely pulling off what we thought we would in regards to the economics. And what I would say we're always going to be opportunistic when it comes to either a combination of the ability to do more with Wi-Fi and the LTE network and manage traffic flow between the two, we'll always be looking at that. We'll be opportunistic on any spectrum opportunity. But we like our capital-light MVNO approach today. It's accomplishing what we need to. We'll always be talking to our partner about opportunities, but I think we're in a really good position going forward.

[Brett Feldman:]

Thank you.

[Jason Armstrong:]

Thank you, Brett. Next question please.

[Operator:]

Your next question comes from the line of Phil Cusick with JPMorgan. Please go ahead.

[Phil Cusick:]

Hi, guys. Thanks. Cable EBITDA margin guide of 50 basis points growth is similar to what you said a year ago and it came in nearly three times that level. If I think about your price increase, which is similar to last year and the trajectory of declining mobile losses, it seems like this is fairly conservative. How should we think about programming as a headwind this year and next or anything else going on? And then second if I can in Parks, can you talk about the environment for customer traffic overall? And any feel for share shift? And if we look forward to those new gates and parts in the next few years what should we think about for the cadence of both CapEx and revenue? Thank you.

[Brian Roberts:]

Phil, I'll start off. As Mike mentioned earlier, as expected we're going to have a number of programming renewals in 2020. So we had a couple of years where it was a lower number and that is picking up in 2020. And in particular it will ramp more towards the back half of 2020. So despite that the part -- even with that, we expect to improve Cable margins up to the 50 basis points that Mike talked about for the full year. And the strategy and the expectations are built around our focus on the connectivity businesses, which are margin accretive. We're going to continue to drive that that pivot has happened and we're making great progress there. We're going to continue to focus on the non-programming OpEx. We're going to be taking a lot of transactions out whether they're truck rolls or telephone calls, the customer experience improvement there's a big runway ahead for us to continue to take out those transactions. We're always going to be disciplined on cost control. And I think you look at what we talked about earlier, Xfinity Mobile economic improvements. If you look there's going to be a pretty big year for political advertising, the tail end of this year all those things considered I think put us in a pretty good position to overcome whatever programming renewals that are going to occur in 2020. So regarding parks if you look over the last five years, our EBITDA or OCF and the park business has almost exactly doubled, so about $2.5 billion as the parks are about one-third of NBCUniversal, 30% of NBCUniversal. And when you have that kind of growth you're used to parks being a driver of the overall NBCUniversal growth profile, which they were not this quarter. A big part of it and Mike mentioned this in his introduction was Japan where we faced a number of headwinds and actually went backwards. If you look out, I think the next big thing on the horizon is Nintendo. Nintendo based on our research is one of the biggest potential drivers of attendance that you could have of any kind of IP. It's up there with Harry Potter, which in some of our parks Harry potter drove incremental attendance of about two million people. So Nintendo is in very rarefied air. And the attraction that we're building in Osaka is spectacular. From a creative standpoint it's really unbelievable and that opens sometime -- midyear this year and then we're going to bring it to Hollywood and we're going to bring it, obviously, in the fourth gate in Florida. So I think Nintendo is going to be potentially a big accelerator both in the Theme Park business. And then once you get into 2021, we've haven't talked about it maybe as much as we should. The fact that we're opening a park in Beijing and the fact that the park is so spectacular from a design and creative standpoint, I think is going to generate a lot of growth. And then Brian mentioned in his introduction the fourth gate, which opens in 2023. So when you look at the capital side of it, these are all high-return projects that all make a ton of business sense. And I think if you look over the next five years it's likely our Theme Park business is going to be a driver of growth. Maybe not quite as much as it has been in the last five years because the growth has been so phenomenal and we're getting to a bigger base now. But I would look at the parks business as a real opportunity for us. We still don't have the share that I think we deserve given the quality of the experience we're giving our guests and it's a lot of opportunity over the next five, 10, 20 years.

[Phil Cusick:]

Thank you.

[Jason Armstrong:]

Thank you, Phil. Next question, please?

[Operator:]

Your next question comes from the line of Craig Moffett with MoffettNathanson. Please go ahead.

[Craig Moffett:]

Hi. I wonder if I could return to the wireless business for a second. With AT&T having potentially open the door to at least have a discussion about MVNO terms, can you just talk about what that process is like? Are you engaged in discussions with other potential MVNO suppliers? And have any of the discussions with any of the wireless operators expanded to ways that they might leverage your wired infrastructure. So as you think about how your wired infrastructure sort of brings value to wireless, there are all different ways you could do it, whether it's capitalizing yourself through retail or doing something at a wholesale level or using it to get better terms with your MVNO. Just how do you think about those opportunities?

[Mike Cavanagh:]

Hey, Craig, so I think it starts with – that our very strong feeling that we are – the cable industry, Comcast we're a great partner for the wireless industry. So I think we bring share. We bring customers over to them. I think we're a great investment for the long term. So that's kind of how we start our thinking and that all the goals that I mentioned before. From a process perspective, not much to talk about right now. We are always thinking about ways of improving an already good platform, a good approach to the business. If there are opportunities we'll explore them. And if anything does develop we'll let you know.

[Brian Roberts:]

Yes. The only thing I want to add to that is simply that I think we've shown we can get some scale it's still early days. And that previous question about it keeps accelerating a bit. I think we're seeing that now throughout the rest of the industry and others coming into wireless. So I think I just want to echo that point that we have a successful beginning and hopefully a very long runway that we're just getting started.

[Craig Moffett:]

Thank you.

[Jason Armstrong:]

Thank you, Craig. Regina, we will take one last question.

[Operator:]

Our final question will come from the line of Vijay Jayant with Evercore. Please go ahead.

[Vijay Jayant:]

Thanks. I have two, one for Jeremy. Just wanted to understand in the U.K. Ofcom is pushing to reduce what I think they dubbed as the loyalty penalty, the difference between what new customers pay and what existing out of contract customers pay. Is there really any impact to your business from that regulation? And then for Dave, at CES, I think you guys showed a new xFi advanced gateway that supports 85 megahertz mid-split, really increasing the upstream part of your network. Obviously, I just want to understand, what business opportunity and CapEx implications that may have as you scale there? Thank you.

[Dave Watson:]

Jeremy, do you want to go first?

[Jeremy Darroch:]

Sure. I think, not majorly for us. If you think of our business, we've really, I think, led the way over the last decade, really, around breaking out – breaking down the bundle, making pricing more transparent. We're a leader in service. According to Ofcom starts across all of our products, so not just pay-TV, but broadband and mobile and fixed line as well. At the heart of that, we have a belief about trying to right-size customers to the products that they want and the price that they want to pay, because we think that's important and is the most durable way. And typically, therefore, we moved a long time ago to essentially offering the same deals right across our bases to deal for new customers typically available for an existing customer as well. So there'll be some transition, obviously, within that, maybe some – there's been noise as the market quickly moved to that, but I don't expect it would have a big effect on our business.

[Dave Watson:]

On the new gateway that we did talk about at CES, we're excited about this. I think, there are several steps forward with this gateway, in regards WiFi speed, the improvements in terms of coverage, both for the 2.4 band as well as the 5 band improvements, both in those areas, improvements in latency. Across the board, it checks a lot of boxes. And so, like we do with a great new product like this, we'll package that in some of our higher tier packages. And on a go-forward basis, we'll compete. If you think about segments where this matters, it's an ideal product for the gaming segment. So, we're going to – we'll segment it and go after it. But, like the fundamentals of being able to provide the best speed, the best coverage, control, all those aspects, I think, this gateway helps us in our position very well.

[Vijay Jayant:]

Yeah. Thanks a lot.

[Mike Cavanagh:]

And let me just jump back in at the end here and echo Brian's. Thanks to Jason Armstrong for a great job he's done for all of us in the IR job and I know it will be a great add to the Sky team. I welcome Marci Ryvicker to the company and thank all of you for the support and joining us on this call as we get 2020 kicked off. So, thanks everybody. Have a great day.

[Operator:]

There will be a replay available of today's call starting at 12