“We expect the BEAD program to present a unique and attractive opportunity for us to expand our network with subsidies, generating significant returns that solidly exceed our cost of capital.”

In context

“tion of our network evolution initiative at the end of 2025 or the beginning of 2026, CapEx, excluding line extensions as a percentage of revenue, should decline to below 2022 level and continue to decline thereafter. Turning to line extensions. In 2023, we expect line extension capital expenditures to reach approximately $4 billion. We expect 2024 and 2025 line extension CapEx to look similar to our outlook for 2023 at approximately $4 billion per year. And our 2024 and 2025 line extension capital expenditure expectations, assume we win funding for or otherwise commit to additional rural spending. We also expect most BEAD money to begin to be appropriated in the 2024 timeframe with four-year build timelines from grants. At that time, we expect that our RDOF spend will begin to ramp down. We expect the BEAD program to present a unique and attractive opportunity for us to expand our network with subsidies, generating significant returns that solidly exceed our cost of capital. For our additional subsidized passings, we expect our net rural construction cost per passing to be closer to the roughly $3,000 per passing that we've incurred in our recent subsidized state and local builds than to our RDOF per passing costs. Our six-month penetration of passings in our newly built rural areas continues to be around 40%, and we expect penetrations in these areas to continue to grow. If you use the cost per passing that I mentioned a moment ago, a high broadband penetration assumption, which we think is reasonable, our current ARPU, excluding mobile, a high incremental margin based on low incremental overhead costs and a reasonable terminal multiple or perpetuity growth rate, you can clearly see the very attractive IRRs associated with our rural builds. Turning to Slide”