Good day. Welcome to the DISH Network Corporation first quarter 2023 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tim Messner. Please go ahead. All right. Thanks, Rachel. Good morning, everyone. Thanks for joining us. On the call today, we have Charlie Ergen, our Chairman, Erik Carlson, our CEO, Paul Orban, our CFO. On the wireless side, we have John Swieringa, President and CEO of wireless, and Dave Mayo, EVP of Network Development. Before we start, I need to remind you of our safe harbors as usual. During this call, we may make forward-looking statements which are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from historical results or from our forecasts. We assume no responsibility for updating forward-looking statements. For more information on factors that may affect our future results, please refer to our SEC filings. With that, I'd like to turn it over to Erik for opening remarks. Thank you, Tim, and welcome everyone, and thank you for being here today. I'm gonna begin with a few brief comments before opening it up to your questions. As most of you are aware, it's been a busy few months, some planned and some not. On our last earnings call, we announced we had experienced a network outage that affected our incident response and business continuity plans. Once we determined the outage was due to a cybersecurity incident, we promptly notified the appropriate law enforcement authorities. On February 28th, we further disclosed that certain data had been extracted from our IT systems as part of the incident. Our investigation to the extent of the incident is now substantially complete, and we have determined that our customer databases were not accessed in this incident. However, we have confirmed that certain employee-related records and a limited number of other records containing personal information were among the data extracted. We've taken steps to protect the affected records and personal information, and we have received confirmation that the extracted data has been deleted. While we have no evidence this data has been misused, we have started the process of notifying individuals whose data was extracted. We restored the systems affected by the cybersecurity incident. Our websites, customer care functions, self-service applications, and payment systems are operational and have been since March. Our customer care operations are up and running, and service times have normalized. Our DISH TV, Sling TV, Boost Mobile, and wireless services all remained up and running throughout the duration of the incident. We sincerely regret the inconvenience to our customers and team members and certainly appreciate their patience while we work to restore systems and return our customer care operations to normal. Data security is extremely important to us. Our team, including third-party cybersecurity experts, has been working to enhance our cyber defenses and overall security posture. We've upgraded our endpoint detection response system, and we've taken other measures to further secure our data and systems. We've also refined and will continuously improve our business continuity and system restoration processes. With respect to the financial impact of the incident, we disclosed in our 10Q today that we incurred about $30 million of expenses, mainly related to remediation, additional customer support, and consulting and IT costs. This amount is included in cost of sales in our financial statements. We also disclosed that the outages related to the incident negatively impacted our disconnects and churn for DISH TV. The outages did not materially affect our Boost Mobile or Sling TV subscribers. During the incident, we undertook extensive efforts to support and protect our customers and employees and to further enhance our cybersecurity practices. Due to the commendable efforts by our team at DISH, we do not expect any additional material future costs or further impacts to our subscriber base from the incident. Look, I wanna thank our customers, employees, partners, suppliers, and vendors for their support, patience, and understanding. With that, I'm gonna hand it back to the operator to start taking questions from the analyst community. Operator, please open the phone lines. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. Please state your name and affiliation before posing your question. Again, please press star one to ask a question. Our first question comes from the line of David Barden with Bank of America Securities. Please go ahead. Hi. This is Marlane Pereiro on for David Barden at Bank of America Securities. You know, wanted to start out the questions regarding CapEx. You know, can you talk about the run rate CapEx post the June 2023 build-outs? If possible, provide, you know, what potentially could be a new run rate, when that run rate would start, and then potentially when CapEx would ramp again heading into 2025 for build-out requirements. Hi, this is Paul. Hey, I'll jump in. That's a good question. I think we'll come in slightly lower than last year's CapEx. Unlike last year, it will be front-end loaded with it dropping off after we hit our June milestone. Other than giving future CapEx guidance, we don't provide that. Got it. This is Charlie. I think to add a little more color to that, I think that obviously we had two back-to-back milestones in 2022 and 2023, with the vast majority of the population, you know, you have 70% of the population. You can look for us to be able to do two things that we really would do from a CapEx perspective. One is we certainly will be able to take a little bit of a pause in terms of some of the new markets, but we'll continue some CapEx to densify the current markets that we have or, you know, once we're with customers, you always find you have some gaps and things. We will have some CapEx on current markets, but future markets, we'll be able to take a bit of a pause until really the late 2024, early to 2025 time frame. Got it. You know, as you know, build out the licenses to meet the mid-2023 requirements, is it possible to give any update on, you know, the build of the 600 MHz that you might be building out concurrently with the other licenses? Yeah. Hi, this is Dave Mayo. You know, we've started construction on about 18,000 sites as of the end of the first quarter. It'll take approximately 16,000 sites for us to meet the objective, and those sites will have to be fully fibered and powered, and we're well on our way to achieving that. Yeah. I think on the second part of that question, the 700 MHz. The, the 700 MHz is in those numbers. 600 MHz more. Excuse me. 600 MHz. Is in those numbers. In terms of new cities for 600 MHz, that's something that, you know, we'll take on a kind of case by case basis as you find that you have more roaming charges than you could do by putting something on your own network, you'll build for success. Ultimately, you'll build for the FCC. We're well on our way. In addition to that. Yeah, we're well on our way to meeting the 70% with respect to the 600 MHz licenses. Got it. Thank you. You know, once you do hit the mid-June requirements, is it possible to give us a sense of how much this will make in terms of the business operations, and your go-to-market strategy? You know, it was 20% last year, 70% this year. Just trying to think about the impact it could have on the business, you know, now with a much broader offering. Good morning. It's John Swieringa. I'll take that part of the question. At the end of the first quarter, we're now serving 70 million people with commercial VoNR on the DISH 5G network through Boost Mobile. That's a little bit more than 50 cities. As we build out 5G broadband, we then come in and optimize the network, densify it, and move those markets towards commercial launch. We would expect that by the end of the year, we'll be serving the majority of the U.S. population with commercial VoNR and loading retail customers onto that network. We're making steady progress with getting VoNR and Band 70 devices into our distribution and our supply chain, and we expect that to pick up as the year continues. Got it. Then, you know, just, you know, turning to, you know, your cost of capital. Just given, you know, the current cost of capital, can you walk us through maybe what some of the levers are that you could pull to address, one, you know, upcoming maturities and two, you know, other funding needs, including additional CapEx? Yeah, it's Charlie. Well, obviously, you know, we focus on, you know, our maturities with obviously the next one coming up in March of next year for $1 billion. That's a convert. We look at the levers there and say that ideally would be equity or equity-like in terms of nature because it's kind of equity-like today. We think there's a number of levers. Obviously, we're liquidity poor in the sense that the markets probably from a debt perspective just really aren't open to us, but we're asset rich. We look at all the different levers we have. I'm not gonna give you those on the call, but over the years, we've been a good steward of capital and we think that there are many things that we can do, and some that, you know, that we can do to meet those maturities. We're focused on two things. One is the operations of our business. Obviously, to the extent that we operate our business efficiently, start putting people on our network and start competing in a little bit stronger way with postpaid, which is a more profitable customer on our network. The liquidity becomes a little bit easier to attack because people will see the growth and the profitability of what you're doing. I f you're not able to do that, then that's a different story. Obviously, we have to wait and see where the markets are next year with even the government having a debt crisis. Obviously, there's market. There is money available today out there in the marketplace. There is a fair amount of capital in the marketplace. We hope that doesn't change, but we're like everybody else. We don't control, you know, where the economy goes. Thank you. Then one final one, if I could. Can you provide any update on the 800 MHz spectrum auction? Is there anything there that you could share in terms of timing or, you know, potentially what you'll do with that? Well, I think I can repeat what the CEO of T-Mobile said. We did get an extension of 60 days on that and at a minimum, you know, we think it's 800 MHz is extremely important for us to be able to compete. Obviously, capital-wise, we're challenged to be able to do that transaction today, but we think that there's ways that we can make that transaction happen. We think it would be from a competitive point of view, that's important low band, particularly uplink spectrum. Great. I'll leave it there and pass it on. Thank you. Our next question comes from the line of Ric Prentiss with Raymond James. Please go ahead. Thanks. Can you hear me okay? We can, Ric. Okay. I wanna follow up on that if I could. With the 800 MHz spectrum, is there a regulatory requirements to build that? Is it possible to resell it? Also, you know, the spectrum securitization market, typically what lends at about 35%, 40% of value. Just wondering if you could elaborate a little further on what the requirements are with that 800 MHz. The requirement is to build it, we have built it. Part of what Dave and his team have done is to build 800 MHz. It's my understanding that T-Mobile has turned that network down for the most part. There's still some statutory requirements that they keep a couple towers up, they pretty much turned that network down. We basically have a functioning 800 MHz from a transmission point of view, it'll be at 70% of the population in a few weeks. We wouldn't have a regulatory problem for meeting the commitment for build out. Were you able to keep some of those? If for some reason we weren't able to exercise the option, we would have a penalty of $72 million to T-Mobile. That's the other piece of it. Right. Were you able to take over any of those old Nextel antenna sites then to help with the transmission? We did not take over. Dave, did we take over any? We've taken some sites, Rick, but not, I wouldn't call it a significant number, but it's not the Nextel radio gear that we would use. The 800 MHz frequencies are in the radios that we've deployed, the low-band radios that we've deployed. Okay. You know, put that in perspective. If you were to do a new build of 800 MHz, you're talking several billion dollars to do if you were to go out on your own and build 800 MHz to the extent that we have, that would potentially be a multi-billion dollar build. It'd cost you almost as much to build as we've had to build for all our frequencies. Last one for me is, Charlie- You'd have to- You know, I leave it up to the analyst on here to figure out if that's positive or negative, but I think that's a big positive for an asset we have that people just don't recognize. Sure. Last one for me is on the private network side. I think you've said several times that the best use of the network might be for wholesale business enterprise, kind of private network type applications. Update us as far as what you're seeing in the marketplace. I know it's a long sales cycle. How is the team performing there? What are the hurdles in pulling that revenue stream in? Are there any opportunities for financing with potential strategic partners in that area? I think you're talking about the enterprise side of the business. Exactly, yes. Yeah, we haven't made substantial progress in terms of the enterprise business in terms of announcements. We're behind the scenes, obviously, t here are really. You mentioned it a couple of ways that we would approach the market. One would be, we'd actually build it out and lease it, which would take CapEx. That obviously is a bit less attractive to us. The second is people just pay for it from the get-go, so it's cash positive from day one. The third is that some of our partners in our build, you know, whether it be, you know, Cisco or Dell or AWS come to mind, where they already have a big enterprise business, that they just add our spectrum into their thinking about how they would design private networks. At that point, we would be, you know, more of a wholesale provider of spectrum. Any of those three things are possibilities of how you would go out and build an enterprise business. Of course, it's gonna be a huge market for all the players. I just think we're a little bit better positioned because I think the kind of network we have is the kind of network that companies, when they really become omniscient about what a private network can do for you and what it should do for you, the architecture of what we have is just without the legacy, is just a better, you know, if you're gonna build it new, that you should build it right. Any idea when we can look for it formally announced so we can see it on our side of the fence? Don't have a timeframe for you. I mean, you know, we said before that we think you'll see, you know, it's a 2024 event for us. Great. Thanks a lot, guys. Your next question comes from the line of Michael Rollins with Citi. Please go ahead. Thanks. Couple questions. The first one is, I'm just reading the 10Q this morning. There was a comment in there that DISH plans to implement one or more of the following options, raise additional capital, pursue strategic transactions, and/or advance additional cost reduction initiatives. Just curious if you can unpack that a little bit more and what investors should expect over the next number of months from that. Well, I mean, I think we're good stewards of capital, and we obviously realize that we're more of a right now, we're more of a liquidity story than anything, in the market, and obviously, we have to address that. I think there's two ways, you know. I don't know what else I can say about the options out there. You know, obviously, the first thing we do is focus. You know, I've really focused the team on executing to build, you know, the best network in the world, and to enter the postpaid business, which is more profitable, and to make sure we get more devices that we can put on our network. That makes liquidity that much easier because obviously you're proving you can compete, and we really haven't proven that yet. That's kinda number one. The second thing is to meet our milestone with the FCC, we just have to do that. The third thing, which is a little, maybe a bit more nuanced for people on this call, but, you know, we've been on the TSA agreement with T-Mobile since the inception, which is, you know, basically our billing and provisioning and all our back office functions. We have to be off of that by the end of this quarter. Those are big things that we need to do. If we do that, then we're successful with that, then you start to see the growth that everybody's been hoping for and expecting, you know, probably a year earlier than this. Then that obviously helps you in your liquidity side of it, because you're showing you can compete. John, there's one other thing we need to do this quarter, which we actually have done. Well, it's two things. One was to get the cybersecurity behind us, and that was a massive effort. I wouldn't say it was record time based on, but certainly for us, it was, you know, I think right up there at best in class in how you recover from an incident, and a lot of real solid effort on our team. It gives you a lot of confidence going forward that your team can when under pressure can operate. The other part, maybe John can talk about. Well, there's been a lot of focus on getting Boost Infinite ready to go, and we've made a lot of progress there. You know, you'll see us ramping up marketing later in the year as well as distribution. One of the big things there that's been a focus for us is bringing the iPhone to Boost Infinite, and you'll see it come later this year. Big effort there across the teams to make sure we're ready to go in postpaid. I think that iPhone's important because it's obviously a big part of the market share out there, and I think it'd be very difficult to be successful in the postpaid business without it. We're pleased that we will be able to bring the iPhone to the market, actually within the next few months. We've done a couple of things already this quarter that we needed to do, and we got two more things to do, and then I think we get to go a bit more on offense. It's been a little bit frustrating to pay defense as long as we have. Just shifting gears to the video side, I also read that you entered into a contract to build and launch another satellite. Can you share a little bit more details on the cost and just the thoughts around continuing with the satellite side, if there is an opportunity at some point to maybe take these customers and leverage the Sling product and accelerate, you know, migration to streaming? Yeah, Michael Rollins, this is Erik Carlson. I'll take that and maybe Charlie Ergen has a few comments. We did enter into an agreement to build what we would call EchoStar XXV, so our 25th satellite. We entered into that agreement with Maxar Technologies. We fly Maxar Technologies satellites today, and so we're a satellite that we're familiar with. Obviously, you know, as we've been talking about on the call for quite some time, you know, from a DISH TV perspective, we've really been focused on, you know, adding profitable subscribers in rural America. You know, we've had some success there, and we've had decent success in retaining some of those customers. As our fleet continues to age, we're in a position where we need to, you know, add a satellite in order for us to continue to operate the service with appropriate backups, you know, within the latter half of this decade. That satellite is under construction now. We're under contract with Maxar, and we would expect to launch that somewhere in the neighborhood of 20 26- 2026. 2026. Yeah. Thanks. You know, the only thing I'd add to that, we don't think that the DBS business is going away. It's still a preferred choice for a lot of Americans in terms of an efficient way to watch TV. Obviously, we're able to add apps and things to the set-top box for a seamless experience. We don't think that business is going away. We just wanna make sure that we have the right facilities in place for our customers. You know, to some extent, some of these satellites, you know, you have to have a satellite for insurance purposes too, so that's the reason. Is there a rough cost that we should just keep in mind for this? We don't disclose that. If you take a look at the capital commitments footnote in the Q, it's included in there. What is it? Don't make them read, just tell them what it is. Well, no, we don't disclose it. Oh, you don't disclose it. It's included in the totals. Oh, it's included in the total. Okay. In the capital commitments table. I got you. Thanks. Our next question comes from the line of Walter Piecyk with LightShed. Please go ahead. Thanks. Charlie, when you look at the sub losses in DBS and Boost, what would they have been if you hadn't had the cybersecurity event? Similarly, you know, to the extent there was uncollected revenue, how do you account for that? Is it show up at ARPU and then, like, a receivable that gets written off? Is you just not reported in revenue? Kind of a third part to the same question, which is what's been the impact? I know you said as of March, it's been, you know, the systems have been repaired. But, you know, given the impact it had on customers, what have you seen in April and early May in terms of any lingering impacts to subscriber churn or usage or anything? All right, let's unpack that. Probably a couple different people here to answer that. I'll take the Boost one really quick. Not a material impact on Boost Mobile. We're in a situation, Walt, as you might expect, where we realize we're entering the post-paid business now, as we bring up our network, and a post-paid customer is just a lot more profitable than a prepaid customer. If you have limited capital, you're gonna spend your capital on the most profitable customers. We haven't been, perhaps as aggressive in Boost as just knowing that we got better things coming, better economics coming. A dollar spent today that makes a small return, you're better off waiting till next quarter to spend that money where you have a much better return. At least that's our theory. For Boost Mobile, we also know that there's another benefit of putting those people on our network, and that's starting to happen now, too. That's I wouldn't read too much into Boost. As it relates to the accounting question about revenue, you take that. Can you take that, Paul? Yeah, I'll jump in. This is Paul. The revenue impact was really immaterial. You are seeing it, the immaterial amount show up in ARPU to answer your question. Walt, this is Erik. Look, it was-. Pardon my interrupt. How is that possible? I mean, if you weren't able to collect revenue from customers, and there's reports that people had to, like, go to stores and bring cash to stores, how is that possible? Like, did you go back and look people that you weren't able to collect, ones you did collect? A lot of the press stuff is exaggerated. It's just really hard to- Okay. It's really hard to comment on every exaggeration that's out there. Okay. You know, it's a case that I think the more case is maybe you didn't collect a late fee or something like that. I think there's a little bit of that. Maybe Paul, you maybe. Yeah. No, we were up and running collecting all amounts by the end of the quarter. That did get all caught up. You would have seen it, to answer your specific question, it would have been sitting in an AR. As you can see, our AR balances are down from year-end. We might have waived a late fee. You know, you're probably a little down on the margin because you waived a late fee, or you extended somebody three more days than you would have because you knew you'd be able to collect the, you know... There's some stuff around the margin there, Walt, nothing. Nothing material. Well, there's a third part of the question. I mean, I think, Walt, I mean, this is Eric, just to add a little bit more color. I mean, obviously, you know, my opening statement, you know, we talked a little bit about it, but, you know, on the DISH side of the business, you know, that's where most of the impact was really felt, right? The legacy business. You might explain why that was. Yep. You know, legacy infrastructure. As you can imagine, we've talked about it here. We've definitely modernized kind of our tools and staff associated with Sling. Obviously, we're on a TSA for some of the business through T-Mobile for Boost. Obviously, we're building out our new, you know, digital operator platform for our new Boost and Boost Infinite businesses. You know, the modern architecture really wasn't as impacted as much, right? Where we have different principles, cloud-based, et cetera. You know, when you think about DISH and the legacy side of the business, that's where the impact happened. You know, quite frankly, you know, we've been giving award-winning customer service. We've talked about our J.D. Power awards here, which are five in a row, and we're quite proud of them. You know, quite frankly, we just didn't live up to the expectation. There were long hold times and, you know, we weren't able to process payments in DISH. I mean, obviously, we're in a post-paid billing cycle. as Paul mentioned, we caught up on some of that. There might have been a late fee here, or there, which benefits the customer. In some cases, obviously, we weren't able to answer a phone call or answer, you know, a customer issue where they had a technical issue and they may have disconnected. you're seeing that in the Q1 numbers. Essentially, we put that past us. Like I said, in the opening remarks, you know, Boost and Sling, you know, not really materially affected. DISH on the legacy side of the business is where we had the impact, and that's generally behind us now. Yeah. Just because I know the way maybe you guys are... To answer your question, two things that happened on the DBS side of the business, which is, one, is we had the elevated churn. The second thing is we didn't market. I mean, we didn't make sense to go out and try to get... We had lower gross ads and we had higher churn. We would expect obviously that we return with the outage behind us. More normal run rates. To more normal run rates. That's what you've seen thus far in the first month of the quarter, that there hasn't been lingering impacts from it? Well, I don't think we give guidance, but I don't. Okay. Thanks for asking the question again. We don't give guidance, but I think we expect that we would return to normal operation. How about that? That's fine. Let me just do one, a different one, if you don't mind. You know, you hit the 70% or whatever it is. I don't think the FCC has an obligation to do anything, but it's gonna help you in terms of raising capital and becoming the fourth competitor of the market, yada, yada. Like, have they given you any indication that when you're done and you submit whatever you got to submit in terms of engineering studies, that they're gonna give you some formal stamp o r is it gonna be normal standard or normal procedure, which is like they don't really have to say anything? Yeah. I think it'd be very helpful if they would give some indication to the market. They did not do that with the 20%. It would be helpful. You know, it's one of the things we don't control, which is, you know, the regulation and the government and so forth. It's probably one of the more frustrating things because I think everything that we can control, you know, we just work really, really hard to be successful at. We've done that for 40 something years, right? From the regulatory point of view, you know, as an example, my congratulations to SpaceX, but there was a 12 GHz study that was out there that we came on the short end of that stick. You know, SpaceX was allocated the spectrum, and we were not able to, even though we paid an auction for that spectrum, we weren't able to access that spectrum for mobility. You know, we're a bit of a losing streak there, but you know, we've been on both sides of that. You know, I hope that it'd be helpful, but I don't think we should expect that the FCCs will say anything. In part, because they're gonna have to do their study to verify, you know, our team will certify under penalties of perjury that we've made it, but they have to certify that themselves. I mean, do you- Which they should do. Do you think they're- That will take them some time. I think from an expectation point of view, I don't think anybody should expect that the FCC sometime in 2023 is gonna say, DISH has made their build out requirement, but we will be certified it. To the extent we do, we will certify that under penalty of perjury. We take that very seriously. Does that at all inhibit... Go ahead. Charlie, does that at all inhibit your ability to reduce CapEx? To the extent that, like, let's say, hey, you believe you hit the 70%, you pull back on CapEx and then T-Mobile or whatever, and their reg people are like, "Oh, look at Charlie, he's cutting CapEx," and trying to get the FCC to hold your feet further to the fire. Do you think these are two different things and you shouldn't have to continue to spend, which is unrelated to hitting that milestone with the FCC? No, I don't think. First of all, you can expect our competition to always go to the FCC. We were hoarders. We were speculators. None of that was true. When you've got three or four companies coming in saying the same thing, you know, that punches. You know, we don't quite punch above our weight versus three or four people, you know, at the FCC. You can expect that there'll certainly be a lot of. You're gonna hear about O-RAN and O-RAN, you know, three years ago, O-RAN didn't work, and then, well, maybe it'll work, you know. Then it was like, well, DISH will never. Maybe it'll work, but DISH will never make it work. Now it'll be, well, you know, well, maybe DISH made it work, but it's still a decade away, you know. You're always gonna have that noise from people who aren't doing it. I don't think that we're required to continue to spend on CapEx once we believe we've made our milestone, with the exception of the third milestone, which is we'll have to continue, which we will a little bit, you know, continue but ramp up in late 2024 and early 2025. Understood. Thank you. Our next question comes from the line of Douglas Mitchelson with Credit Suisse. Please go ahead. Oh, thanks so much. I think, you know, two questions. I'm curious if you're willing to share what percent or maybe ballpark what percent of Boost traffic's running on your own network at this point versus T-Mobile or AT&T's network. You know, Charlie, we've poked around it a little bit, so I'm trying to figure out how to ask the question the most constructive way. You know, my experience with you historically has been, you know, pretty conservative approach to operating the company. The markets obviously think you're flying pretty close to the sun on your capital structure. I guess I'm just wondering if you feel like you're in a pretty conservative position or if, or if you sort of sympathize with the market's views that, you know, things are pretty tight here. Thanks. Yeah. I would say that I do think we operate pretty conservatively, but I do think the market's had historical rate changes in the last year, so that certainly has pushed us more into- that has pushed us closer to the sun, but not to the sun. Look, we have a narrow window of opportunity here. We have a narrow window to perform and execute and address our capital structure. We have to do a lot of things right. We have a small margin of error, but it's all doable. It's not a place that's unfamiliar to us, right? We started in 1980, I think mortgages were 15%. I mean, the capital markets were much worse than they are today. We started the business from scratch with no money, so, or very little capital. You know, we had a merger denied with DirecTV by the Justice Department. We were in that. We had a very narrow window back then. We've been there before. You know, again, the things that would worry me would be, do the markets get worse? Where are they next year? We don't know that for sure. Obviously from a regulatory point of view, there's obviously a lot of things from a regulatory point of view that we have or continue to have in front of the regulators and how do they rule on those things. We haven't, you know, we didn't do very well on the CDMA shutoff, which was pretty bad. We didn't do very well on the DE litigation. We, you know, we haven't done very well on some things. But my experience is you don't always, you win some, you lose some. We've been on both sides of it, but the losing, you don't have a losing streak forever. I'm hopeful that that at least will be a positive, but we'll see. You know, again, we focus on the window of opportunity we have to control the things that we can control. We have a path, and it's not evident to the people on this call, but we have a path, and we have to execute on that and hope that nothing gets any worse in the marketplace. Got it. On the Boost traffic? We don't disclose that, but it's not a material amount yet, in part because, we only have five maybe John can talk, but we only have five handsets now that have Band 70, which is a major part of our spectrum. As Charlie said, it is early days. We're gonna continue to have a growing portfolio of products. They're gonna be available for Boost Mobile and Boost Infinite on our own network, including iPhone. We're really just getting ready to support that business from a supply chain perspective. Network's up and ready to roll in those markets, and we're gonna be loading customers. Once we clear the 70%, and we're on track to do that, we'll then start optimizing those markets and loading on our network there as well. Yeah. We're ramping this year. We should make one distinction. Realize one of the things that we've done is built a network with Voice over New Radio. We're the only person in the United States, really in the world other than the Chinese, partly that does that at scale. That's the new way to do voice. Our, you know, our goal is to have the vast majority of or have the majority of the population be able to utilize our network with VoNR by year-end. Obviously, to the extent that you do that, then the next step is the majority of all your traffic is going on your network. That gives you a feel for where we think it goes. We're not there yet. Great. Thanks so much. Our next question comes from the line of Jonathan Chaplin with New Street. Please go ahead. Thank you very much. A couple more questions on the 800 MHz option. Based on the value ascribed to the option, it looks like the underlying spectrum is being valued at about $5.3 billion. Does that value assume, like, a certain exercise of the option? Is it still probability weighted? If not, what would the value of the spectrum be if it was certain? This is Paul. Yeah, it's still probability weighted at this point in time. The only change that you saw quarter-over-quarter from year-end in the valuation is really just the time value of money impact. Got it. We don't give- H ow much- We're not given the amount non-probability. Correct. Right. Can you give us what the sort of the reference transaction or the reference value is that establishes that $5.3 billion value? We look at, you know, other auctions and so forth out there. We won't give you the numbers specifically, but that data is out there. I'm sure you know who you can compare it to. Got it. Okay. It'd be something like the T-Mobile's purchase from Columbia Capital or something like that for 600 MHz that you might look at. It'll be something like that. Got it. C an you tell us when the exercise date has been extended till? Is that July first or is it September first? Do you still have to notify the FCC of your intention by June first? It's a little complicated 'cause they actually haven't ruled on the extension request, but the exercise date, as I understand, is July first. July first. Got it. We're still- Okay. awaiting the formal ruling. One last one on the 12 GHz. It looks like there's a prospect that you might use that for fixed wireless broadband, given that you can't use it for mobile use. Can you give us some more context for your thoughts around that? Well, I mean, I think for us, mobility is really the key use, and we're disappointed that we weren't able. We believe that we could have used it on a non-interfering, interfering basis with mobility. Look, the engineers are good at the FCC, and I respect their decision 'cause they had enough information. They did their own analysis. I think, you know, the FCC is opening comments on the 13.2 to 13.75 frequency. Again, given that we paid at auction and given that we believe mobility is imperative for us to compete, that would be you can imagine that that would be another place to go. We'll just have to wait and see. Got it. Thank you very much, guys. I appreciate it. The next question comes from the line of Kannan Venkateshwar with Barclays, please go ahead. Thank you. Thank you. Firstly, in the 600 MHz spectrum, I just wanted to clarify something. I think last week, you guys, or maybe the week before, there was an application to cancel some of these licenses. So I just wanted to get some clarity on why cancel instead of just waiting out the license period. Then secondly, when we think about the 60-day extension for the 800 MHz spectrum, is that based on some concrete discussions you may be having with maybe potential partners in terms of funding it o r is this just an extension of an option to see what else is out there that you can go out and explore? That would be helpful. I have one follow-up on funding after this. Thank you. On the 800 MHz, I just don't wanna comment on strategically where we are there, other than we believe it's spectrum that we need to compete, and we think it's valuable spectrum, obviously. On the cancellation of 600 MHz, we made a mistake. When you go to the FCC website, we had a lease with T-Mobile for some markets, and that lease was up by the terms of the lease, so we went in to cancel the lease, and inadvertently canceled the license. That was a foot fault on our part. Again, we believe that the FCC will have to put that on plug notice and not cancel the lease, and we don't think that's gonna be an issue. Okay. Does this strip anything on the secured debts b ecause I think $600 is the collateral for that debt, right? The answer is no, because I believe the inadvertent mistake is gonna get rectified. Okay. All right. On funding, I just wanted to I mean, you have maturities, which obviously, are the evident need, as you go into next year. If you really want to be aggressive competitively, I mean, this is a working capital heavy busi ness, so you potentially need capital for that as well. When we think about the scale of funding you might be, you know, you might go to market for, how should we think about that, as you go into next year? Is that mainly to fund the debt maturities, early in the year o r might you be proactive and maybe access the market for more than just a maturity amount? Thanks. I mean, I look, I guess the way we look at it, the first priority is to fund the debt. Y ou know, then we'll be opportunistic beyond that and creative. I mean, I think again, that's why management gets paid, is to make sure that you can navigate when you have narrow windows, and you can navigate those narrow windows. Teams that are really good, they do really well when they have to focus. You know, I'm quietly confident here that this team can navigate that, right? We just have to focus on the things we control and do that. You know, way I'd say it is, I think the market looks at us as half empty, maybe even 90% empty today, right? I think the truth is that the glass is more than half full, right? This is a company that's been around we're in our 43rd year, we didn't start yesterday. We've had a lot of experience in similar situations. It's a seasoned management team. We're not starting from scratch here, we know how to work together. We know how to assess risk, right? We're asset rich. you know, arguably, we have spent $34 billion for spectrum that has gone up in value. We're building a world-class network. There is not another network in the world that is as advanced as ours. Again, I've traveled the world, there is not another network as advanced as ours, and it's up and operating in 50 markets today and working. If, you know, cloud-based, Open RAN, with Voice over New Radio, it just doesn't exist. We have some advantages in the architecture, and I think one of the things people don't... We're getting a little lucky, which is nice, but you read a lot about AI. and AI, needs data. The most data-rich place is a wireless network, and if you wanna access data, you better be in the cloud, and you better have a very sophisticated network that works more like an IT network. In other words, we've built an IT network that kinda operates as a telco. Our competition is a telco that has to start operating like an IT network. That's a tough transition for them. They'll get there. It's gonna take them a decade to do it, but we're already there. If you think AI is gonna have an impact, probably the first place you're gonna see it is when you're talking to your phone 'cause you're just asking the questions. N ow you have access to the world's information, at your fingertips in a way that you didn't have before, you need a network to be able to do that. We have a lot of things going on from a half full perspective, that, you know, from a short-term Wall Street perspective, obviously it's probably not that relevant. When you look at strategy and you're a long-term investor and you're long-term, you know, that we think that the killer application ultimately will be AI and all that goes with it, and we're fortunate that we've designed the network to take advantage of that. All right. Rachel, this is Tim. Rachel, this is Tim. We'll take one final analyst question here before we move on to the media. Thank you. We will now take our final question from the analyst community. Members of the media on the call, please press star one now to enter the queue to ask a question. We will begin the media portion of this call following the answer to this final analyst question. Our question comes from Craig Moffett with SVB MoffettNathanson. Please go ahead. Yeah. Hi, thank you. Charlie, I wanna go back to something you said earlier in the Q&A session, where you said the debt markets looked like they were effectively closed and you are asset rich. Am I correct in reading that as you're saying that you would be open to selling some portion of your spectrum as a way to finance your build? If so, are you referring to the 800 MHz if you exercise the option o r are there other spectrum bands that you think of as less critical for your build that you would be willing to consider an offer for if they were available? I mean, I guess I'm also thinking you could presumably use spectrum as collateral, but it sounds like since you already have done that, you were saying that that's not sufficient in saying the debt markets are closed. Am I reading that correctly? Well, I mean, I think that our debt is trading for, literally 20% returns, right? Yield to maturity. It doesn't bode well for our ability to access in a competitive way to the debt markets. That could change, but that's the way it is today. When you look at the financing that we need to do for debt repayment and growing our business, I think there's levers we have. Obviously, we have assets. Obviously, anything is on the table when it comes to, as a business person, to get to where you wanna get to run a successful business. We're certainly not gonna go into strategies and all the levers that we would pull there. I just think that it's... I think there's more opportunity for us than people realize, let's put it that way. All right. Thank you. Yeah, thanks. Thank you. We will now take questions from members of the media. Again, if you are a member of the media and would like to ask a question, please press star one now to enter the queue to ask a question. When your line is open, please announce yourself by name and affiliation before asking your question. We will take our question from the line of Scott Moritz with Bloomberg News. Please go ahead. Yeah, hi. It is Scott, Bloomberg News. Question about Boost. It sounds like there's a ramping going on towards a possible launch. You have the iPhone coming in a few months. Curious about the Voice over New Radio and whether that's the gating factor here. Is there a date on the calendar where you would call it a full launch? Hey, Scott, it's John. I'm gonna interpret your question as meaning Boost Infinite, which would be our postpaid offering. Yeah. We're bringing iPhone to Boost Infinite. We'll be looking to ramp our marketing distribution opportunities in the back half of the year. We certainly do have our own network on the way. We've got more progress there with Boost Mobile as of today. We're looking to launch devices and competitive products with Boost Infinite on our own network as well. I realize, the iPhone is on Boost Mobile prepaid today. It's just coming to postpaid. Did you have a date for launch? We're not gonna share a date right now. I mean, we, I mean, obviously, we are not wanting to broadcast our strategy to our competition, but, you'll see us significantly ramp activity in the back half of the year. Our next question comes from the line of Paul Kirby with TD Cowen. Please go ahead. Yeah. Hi, thanks for taking my call. Charlie, you said you're disappointed at what the FCC plans to do in the 12.2 GHz. Are you surprised that they rejected the technical study submitted by the folks who wanted to open it up for 5G? Well, I mean, I think having been on the inside to talk with staff and look at engineering studies, look, I think they did a thorough job. I trust them to do a thorough job. Obviously, SpaceX is doing a good job out there, all I can do is congratulate them. We believe our studies were valid, we didn't, you know, we didn't win on that one. It's just disappointing, it's not, I don't think I would call it surprising. You know, again, we'll look and see where they go with other frequencies and other things. That, you know, that was something that, you know, that and also getting higher power CBRS, you know, rule, you know, for a study. You know, that would be the other thing that we're a little surprised that that hasn't. Given that some of the commissioners have publicly talked about support for that to take a look at CBRS and trying to harmonize our C-band in the United States because we're awkward versus the rest of the world. As a country, we have to compete. We're the only country that's got this low band, kinda awkward CBRS in the middle of a C-band spectrum band that's standardized around the world. I think it's imperative that we take a look at that and get all the facts. I don't know what the decision should be in terms of they, if they should do something or nothing, but I think it's imperative that the FCC take a look at that so that we can make the best country, you know, make the best decisions as a country. You know, we'll continue to fight for that. Just to clarify, when you talked earlier about the other band they're looking at, you meant the 12.7 GHz-13.25 GHz, right? 12.7 GHz- 13 GHz. I somehow said it wrong, but 12.7 GHz - 13.25 GHz, to their credit, the FCC is looking at perhaps opening that band up. Again, that could be mobility. Given the 12 GHz decision and given the fact that we paid for spectrum at 12 GHz two ways. We paid for DBS, and we acquired the spectrum from News Corp. That was auctioned, and we also paid for auction of the terrestrial rights to the 12 GHz frequency. By contrast, SpaceX didn't pay anything for spectrum. It's a funny sort of situation where you pay for spectrum and somebody who hasn't paid for it gets a priority. But they do a good job with it. You know, the FCC's gotta look at the big picture, look at the public interest. Again, I think all I can say is I respect their decision, and it looks to me like they did a thorough analysis of that. We're disappointed, but you know, that, it is what it is. Okay. Thank you. All right, everyone. I think that's it for today. Thanks for joining. Thanks for your questions, and we'll see you back here in roughly three months. This concludes today's call. Thank you for your participation, and you may now disconnect.