Crown Castle International Corp. (REIT)

Q1 2022 Earnings Conference Call

4/21/2022

spk_0: the standby were that to begin good day and walk into the crown castle key one twenty twenty two earnings call today's conference is being recorded at this time and like that in the comfort zones or been low senior vice president of corporate finance please go ahead sir
spk_1: great thank you go to and good morning everyone thank you for joining us today as we discuss our first quarter two thousand and twenty two results with me on the call this morning or brown crank apple's chief executive officer and dance langer crime castles chief financial officer the a the discussion we have posted supplemental materials an investor section of our website a crown castle dot com that will be reference throughout the call this morning this conference call will contain for looking statements which are subject to certain risks uncertainties and assumptions and the actual results may vary materially from those expected information about potential factors which could affect our results is available in the press release and the risk factor sections of the companies that if he filings are statements are made as today april twenty first two thousand and twenty two and we assume no obligations debate any forward looking statements in addition to they call includes discussions of certain not gap financial measures tables reconciling these non gaap financial measures are available in the supplemental information package in the investor section of the company's website at crown castle dot com i'm with that let me turn the call to check thanks then a good morning everyone thanks for joining a phone call as he thought from our first quarter result yesterday and are in crete pull your outlook the strength of the us market continues to stand out we are seeing the benefits strongly thing environment as we support our customers deployment of by g as a result we expect to deliver another year of the percent organic our revenue growth in two thousand and twenty two once again leading the tower industry and the us
spk_2: i'm also excited about the progress or team is making to scale are small cell capability to accelerate the pace of deployments from approximately five thousand note weeks back to deliver this year the more than ten thousand per year starting in two thousand and twenty three
spk_1: looking further out i believe our strategy and must portfolio of more than forty thousand towers and approximately one hundred and fifteen thousand and small felt on air or under contract and eighty thousand and route mild fiber concentrated in a top us market a position crown castle degenerate seven to eight percent growth and dividends per share
spk_3: for years to come
spk_1: dan will discuss the financial result in increased outlook saw concentrate my comments on our strategy to deliver the higher risk adjusted returns for shareholders i growing our did it in and investing an asset that will generate future growth
spk_2: consistent with our long held view we remain focused on the us because we believe that represents the best market in the world for wireless infrastructure ownership when considering but growth and rip
spk_1: as you can see on flight three the strategy has produced tremendous results for shareholders with a combination of significant growth and a high quality dividend
spk_2: since the establishment of the five the standards and started the associated network upgrade in two thousand and seventeen we have delivered double digit annual a f the phone per share grow which when added to our approximately three percent dividend yield over that same time period generated returns of approximately fourteen percent per year to our share
spk_1: holder's which has led the tower industry over this time period our growth has been driven by our customers and dusting thirty to forty billion dollars annually and their network with the deployment of more spectrum and cell fight to keep pace with the rapid growth and mobile data demand
spk_2: because the market fundamentals are so compelling the us market continues to attract an outsized amount of capital investment a network operators
spk_1: according to industry estimates wireless operators the north america are expected to account for more than thirty percent of global mobile network investment through two thousand and twenty five which is staggering when you consider the same operators address less than five percent of the world's population
spk_2: it outside investment in the us is understandable when you look at the fundamental in the us relative to other mark
spk_1: as you can see on flight for the amount of data consume monthly per user and the ability for wireless operators to charge for that data consumption therefore justifying further investment are significantly higher in the us
spk_2: this wide illustrates the virtuous circle that has developed in the us wireless market and that we believe the sustainable over the long term over the last couple of decades us carriers have invested hundreds of billions of dollars to develop wireless network which has created a platform for innovation and ubiquitous connectivity as a result of the quality of the network and the user experience us consumers have youth their wireless devices more and more and they have been willing and able to pay more for that improving mobile experience in turn us carrier to taken the higher caste was generated from customers and invested in their networks and the cycle continues as evidenced by us carriers and dusting more than two hundred billion dollars into their networks including spectrum and cat that over the last four years we believe we are best position to benefit from this virtuous cycle in the us with tower small felt and fiber all of which are necessary for the deployment five g
spk_1: with the three establish network operators and a new internet gail and dish
spk_2: all upgrading and developing nation wide five ci network the fundamentals in the us market or as positive as i can remember during my twenty plus years that trump castle we have invested more than forty billion dollars of capital to date and towers and more recently small felt and fiber that our mission critical for wireless networks to pursue this opportunity
spk_1: we are currently generating a ten percent return on our total invested capital with the opportunity to increase that return over time as we had customers on our tower and fiber at that and grow or casper
spk_2: to that point we are seeing significant demand for infrastructure solutions with our customers upgrading thousand the tower sites for five g while also preparing for the next phase of network gentrification that will require tens of thousands of small felt as reflected in our record backlog of sixty thousand small corner
spk_1: importantly we benefit from the superior growth trends while being leverage solely for the favorable dynamic and the us wireless market
spk_2: as compared to international markets we believe the us not only had the best growth profile as i just got but it also had the lowest rift resulting from a supported market structure that incentivized the carriers to stand on improving their network as they compete on network quality resulting in less turn on our asset no exposure to lot of values from foreign currency
spk_1: and social and governmental policies that are stable and supportive of improving connectivity and expanding broadband access because we believe the us has been greater growth potential am lower risk we are focusing our investments slowly in the us we have an unmatched portfolio that that that is producing growing cashflow by providing access to existing and new customers that are building five ci network and we are investing a new small cell and fiber athletic that our customers need for their wireless networks which we believe increases our ability to capitalize on five five ci growth trent as a result of these actions i believe crown castle offer shareholders a unique opportunity to benefit from the deployment and development of wireless networks in the us in the near the medium term weeks back to once again deliver the highest tower revenue growth rate and us with six percent organic growth and we are preparing for an acceleration and small felt the planet beginning in two thousand and twenty three following the recent inflection and demand from our customers longer term we believe we are the only communications infrastructure and company position for the future of five ci network that will require network densification with small felt at scale
spk_2: by continuing to invest in small cell and fiber that we believe we will be able to extend the runway at seventy eight percent annual growth and dividend per share when i consider the durability of the underlying demand friends with the in the us that provide significant visibility and to the anticipated future growth arrived at the deliberate decisions we have made to reduce the risk associated with our strategy and our history of that he execution i believe count of stand out as an extra one
spk_1: investment that will generate compelling return overtime and with that are turned the call over to dan before we take from question
spk_4: thanks again good morning everyone as they mentioned we're encouraged by the continued high activity levels we're experience which are driven by our customers five three upgrade intensification initiative
spk_1: starting with our first quarter results on page five we began the year on a very positive note with amp of help or share growth of nine percent and adjusted even gaga twenty two percent ever driven by strong demand from our customers as i mentioned last quarter we are now reporting organic revenue growth exclusive of the impact of pre paid rent amortization or what we refer to as organic contribution to fight when of billing
spk_4: in a first quarter we generated six percent core organic revenue growth driven by more than nine percent from core leasing activity and contract at escalators net of approximately three percent from not a new revenues were also possibly impacted by personally fifteen million dollars from items not expected to recurrent only twenty two with approximately ten million dollars and fiber solutions and a balance and hours
spk_2: to pay page pick out of briefly walk through the increase to our full you're twenty twenty two outlook as a result of higher tower activity level we're experience that we are increasing our expectations for site little revenues by forty million dollars due to higher expected great line revenues as well as increasing the country expected contribution from our services business i twenty million dollars these changes result in a sixty million dollar increase to adjusted ebitda while the outlook for fl remains unchanged because the higher straight line revenue did not contribute as it to ever fell and the additional contribution from our services business is off that by a twenty million dollar increased in expected interesting
spk_5: dance resulting from higher interest rates
spk_6: carina paid seven
spk_4: expect organic growth to fight mental billings remains unchanged five percent berlin full year twenty twenty two consisting of or possibly six percent growth from towers six percent growth from small cells and three percent fiber solutions square
spk_1: because organic growth the site rental buildings in a new metric we have included a comparison of this metric to our previous organic growth and fight when oil revenues on pages ten and eleven of our supplemental material
spk_4: trying to the balance sheet we've finished the quarter with four point eight times that to adjusted ebitda approximately nine years of weighted average term remaining a weighted average interest rate of three percent and eighty five percent of our debt paid to fixed rate we expect our discretionary compact the be approximately one point one to one point two billion dollars for the year or seven hundred eight hundred million dollars on a net basis when factoring in four hundred million dollars a prepaid rent contributions from our customers we're managing the balance sheet so we can continue to pursue investment opportunities consistent with our fat agree that we believe will add a long term dividend growth while reducing the overall risk profile the business to further enhance the guy you created for shareholders overtime
spk_2: with that in mind we were able to opportunistically access the bond market during the first quarter to increase our find financial flexibility while locking and attractive long term costs the cap
spk_4: as a result we finish the quarter with more than three billion dollars of available liquidity under our credit facility and only seven hundred fifty million dollars of debt maturities over the next eighteen months
spk_1: that a wrap up we invested over forty billion dollars and mission critical network infrastructure assets in the us to position ourselves to take advantage of the federal growth and risk profile of the best market the world for communications infrastructure ownership
spk_4: we're excited about the demand we are seeing across our shared infrastructure offering as our customers deploy five year gail we expect a once again generate industry leading organic tower revenue growth in the us and we believe our comprehensive set of solutions across towers small south and fiber which are all necessary to build wireless networks will allow us to deliver on our annual target of seventy eight percent growth in dividends projects
spk_7: do that cody i'd like to open the called a quest
spk_0: thank you if he like to ask a question for a similar passing star wanting a telephone keep keypad if you're using a phone please do they say that you meet clinton is alone is turned off placing a to return equipment once again a star when he they ask a question they can first question from david barton with think america is go ahead
spk_8: are you guys thanks so much for taking the questions on so i guess the first one jay says you called them out had dish being a you know a new carrier it scale on the if the you a little bit while on what you mean when when you say that i think that when we look at the national carriers on each probably spending for the on the order of can post billion dollars on on the networks and the next year two i'm wondering if you could give us a picture of kind of how you see fish unfolding relative to them that contributor to potential growth on ah directly and twenty twenty two twenty three and then just a get the question dan on the fifteen million one timer you didn't call all it out as a moving part in the air for foe guidance i am i think that's because baby that one timer was was already included in your in your outlook for for twenty twenty two and when you set it i wonder he kind of elaborate a little bit more on on what it is in in why got called out now as opposed to not been called out previously thank you
spk_2: more day thanks for the question on the first question around this we have obviously been a significant commitment from them at that committed to go and twenty thousand of our towers nationwide soap terms of behavior that's a significant number of our site nearly half the site that we have in the us they have a commitment to go on so that significant in terms of the scale of the commitment that they've made and then as i we look at the activity
spk_1: that we're working on them with their certainly behaving as a company that we would expect would get to the nationwide coverage though
spk_2: it than a really long time and the us been there had been a new nation wide deployment of the network from scratch and or the activity that were theme from this is consistent with their desire to to build out nationwide
spk_4: and dad died to address the second question on the fifteen million dollars one time or nonrecurring in the first quarter as i mentioned it in a prepared remarks it's ten million dollars in the five of the solutions business and five nine hours and hours it's related to a network integration activities that are going on i'm around team on a spy
spk_9: thank god i i
spk_4: consolidation and we expected that fifty that to happen over the course of twenty twenty two and it was therefore included in our guide we just didn't expect it all happen as quickly as it did and hit the first quarter and the reason we call it out now is i we didn't want people to think that that was part of our growth that can be analyzed for the year and then look like are year was going to be better than we expected it to be so we wanted to make sure everybody understood
spk_2: that while is expected for the cook full course of the year we didn't we didn't want it to be a first quarter event that would be recurring every every quarter and and how people are think about when his way to him
spk_8: and dentist click follow up the enough i was looking at that new leasing guide to thirty to two seventy now it for that elimination of that amortization of of of a front cafe it is that me point two fifty a good starting point for thinking about twenty twenty three or do that to fifty have the fifteen of non recurring stuff in it and sell the really our is it's actually to thirty five thanks
spk_4: no i think the that is a good starting point for for twenty twenty three we're we have nonrecurring revenues in our business
spk_2: on a consistent basis that that with it that's and of a weird no mer but but but that they they're did small and though it's not going to that we're going to call it every time we give the guidance it is in this particular case we wanted to make sure that you understood that it would happen faster so didn't really impact overall what twenty four to do with in living
spk_8: okay that's that's helpful thank you so much as
spk_10: that
spk_11: thank you will take an expression from simon flannery with morgan stanley
spk_12: great thank you very much good morning am
spk_11: the there was out for tried looking at the us and a global context and perhaps just our larry in the impact of fixed wireless we saw some really good numbers sam out of that t mobile earlier this week ha i have you seen any change in behavior from the carriers that maybe accelerating densification to at
spk_13: ras that opportunity and perhaps just a little bit more color on the at the capital raise an ama comments about looking for incremental investment opportunities how you're thinking about our what you're going to be spending that on our way of course the or thanks
spk_1: but the morning none the first quarter around thick wireless were certainly seen the behavior of the carriers and they talked publicly t mobile did this week that you mention
spk_2: about the opportunity there i would put that in the broader category of the beads that we're seeing with by the and the very low latency opens up the opportunity for a bath variety of of new applications and and innovation and i think open that lee by jesus this is this is where pudgy become so important other platform
spk_1: i'm for future investment and in order to fully realize the value of that the application have the commons have fixed wireless that they get one of those applications of using the five effect from that that's really pretty compelling again with the high speed than the low and the low latency of the of the of the network and what it will be able to a cop plus so it is a driver and i think as we talk about things like the need for fiber in the network
spk_2: as well as small cell network densification in order to get to that ubiquitous experience for the consumer is is critical and so we think we're going to be through it a multi year growth and densification activity from the carrier at they build our five g and then densify the network based on
spk_1: the expected growth and and in traffic that's coming across that that network so think we're really well positioned fruit for where they're headed and excited to see some of the early returns and applications that five enabling or on your second question around our our our capital then you everything that we do go through a really rigorous process internally of evaluating what we think the return on every dollar of capital going to be and so we're focused the they as we talked about and but the internet comments the majority of the capital funding at the moment of focused around fiber and small cells in particular as we're building small bills for the wireless carriers we think it's going to remain in that category for a number of years a number of years to come and we're evaluating those opportunities to invest and fiber and small know around what we believe the long term lease up will be
spk_2: for though that that's so picking the locations where we have a carrier are committed to go initially at our anchor tenant and then choosing to go into places where we think there's gonna be additional leith up and therefore additional return on that capital that ultimately drive returns to our to our shareholders much like what we've done in the tower business
spk_1: for years and yourself
spk_2: the way we're thinking about the capital stand in the eye and the opportunity as it it's growing and out and we'll update you on the scale of that in that in the years to come but as i mentioned in my eyes it didn't an existing metres or a new mattress no the majority of what we're doing now is still in the in a top thirty market the nfl markets
spk_1: what we see at the moment is is mostly opportunities in the top fifty top one hundred market in the us
spk_2: as it expands beyond that will just have to look at what the returns are in those markets and what the opportunity for leith of the to determine whether or not it justified capital investment
spk_14: great thanks i'm rooted the me let me hit on one a classes you ask on a capital rate itself i think you're trying you're you're equating that with investment opportunities we whenever we look at our or balance sheet we look at long term a short term exposure thudding all those things what we did earlier in the
spk_4: this year the first quarter was term out some a good borrowings on a revolver by echo accessing long term capital at a fixed rate i analysed
spk_10: it and then pour that also was to pay down some that majority that were coming due in the next twelve eighteen months just to prepare ourselves for rising interest rate environment not to prepare ourselves for incremental investments that we thought coming
spk_15: thank you thank you will you next from that nickname with that touch of bank the egg i think you're taking a question i'm so we thirty two the national carriers i know they're investing aggressively right now but i think each of telegraph i can accept clients either starting and twenty twenty three or twenty four so with that in mind i'm wondering how you think about crown castles ability to continue delivering
spk_1: that seventy percent a half a percent growth target over the next several years on the night at ease on the least contemplated cat back squats that are coming and then ah on the services strength for you call doubts on in the increased ballot it's year just wondering you can shed any light on whether it's a single carrier that drove the outside or whether the yeah strengthen the love it more
spk_2: broad based thanks
spk_1: jurgen morning that thanks for the question out on the the the that to run around network improvement i think i would step back and look at what what have been invested by the carrier they made reference to the fact that over the last four years they've invested over two hundred million two hundred billion dollars in in both capital funding for network deployment as well as the acquisition of additional spectrum at that's about half and half roughly between investment in the spectrum and and investment and cat that and most of that spectrum that than acquired than acquired i inside of the last twelve to eighteen month so there's a significant and
spk_2: not of investment that the carriers have made in spectrum
spk_1: and that the absolute best environment for us to the infrastructure provider or with the carriers are times when they have followed that romney spectrum and capital in order to the political spectrum and so as we look at the long term opportunity here out for for deployment
spk_2: of additional network resources by the carriers we think the environment that's up really nicely for an extended period of time and a long run way of growth and so when we look at our seven to eight percent growth in the in the dividend over the long term for obviously looking at a number of a number of different scenario that the how
spk_1: it played out at the length of time that we believe it will take the carrier build out five g is a very long period of time so we've we think about it in terms of a decade more than we think about it in terms of quarters or with a year to and so we think the environment set up nicely for an extended period time of us being able to to build on our dividend growth of seventy eight percent i will mention we talked about the last quarter to briefly here that we haven't two thousand and twenty five we have the tower churn of about two hundred fifty million dollars related to to the t mobile agreement
spk_5: and so in that one year we do you expect that the that seventy eight percent we won't get all the way to seventy eight percent of that year but other than that and the environment that were in we think there's there's plenty of investment that will continue run the network in order for us to be able to drive that seventy eight percent annually
spk_15: on your second question around started that it's broad base our seen an uplift in terms of activity around the tower did not a across the board from all of our cure your customers and that as i mentioned in my comments the environment it is very attractive with all three of them deploying and and this in addition to that
spk_7: well it up wanted to clarify one thing i said two hundred fifty million dollars and to twenty twenty five two hundred of the for everybody starts to spin up on that it it's two hundred million dollars and there has been no change since the enough to let them take them yep
spk_10: can you take away the next fall off i had some great thank you
spk_16: and i felt it coming back hey thank you pick a next question from brick prentice with mean the james exploit everybody er ret
spk_1: take up for three shaped were disclosure the civilian on the prepaid amortization a prepaid read
spk_7: as rampage eighty hours a night i'm i'm always interested in i'm two questions along those lines
spk_4: obviously it would say so prepaid right had global make a to twenty to twenty one expect it and of flattish year over year from twenty one twenty two it then shows drops and twenty three twenty four twenty five twenty six i soon part that is just one of new contracts to me and but are we thinking that the amortization a prepaid wrench drop down into more like the three hundred four hundred level or as or new business expected maybe the come in that would keep it up elevated
spk_2: yeah right guys are think that that it
spk_17: the first i'm glad it you'd like a new disclosure with me at we did
spk_4: try to respond when people get us from aladdin played that's what you're seeing with is that the concepts are thorn in now i we do get new business and therefore get i contributions from our customers that add to pre paid rent amortization over time it's just that we had so much of that historically especially in our our business that the amount rolling on off is bigger than the amount that being added on which is why you're seeing a reduction over time and prepaid rant amazon those years that you're talking about we do not anticipate spending enough money in art our business to make up for that in those years just because the demand for the amount of have increased activity on our towers in such that we would have that much capital
spk_16: and but
spk_5: that i think as is at ultimately assigned a really good business the people are willing to pay for are all of the upgrade we did long time ago and what you're seeing now is a tremendous increase in revenue and cashflow generation on the asset without any and criminal capital going in which is why you're seeing the returns and yields on of tower business
spk_4: growing as fast as they are on a year over year bed
spk_18: look at the line of no good deed goes unpunished any thoughts and the have a break out that imitation be paid rent them between tower and and small cell fiber and you think about it to the theater office phone model bit of a segments in your growth rates
spk_16: yeah known as you know we'd we do it on a on an actual basis to try to give you a lot of sense for what that is an m we are as we've talked about now with the on the concept of of the buildings as opposed to revenues and in putting a be paid rent amortization enter into other eat
spk_4: you can get a lot of that information we give a lot of that information for the current year we're not going to break it out forever you're going forward
spk_1: i'm at a loaded question the with a vote with see that they keep our dog it's like a father to be about four hundred million this year on any thoughts into the future just walls or national forecasts but a to the natives more like six know lawyer announcing the four hundred million range and a bottle where that
spk_2: my head over time as four hundred a better number six and the better numbers you think about what that contribution fact you might run out
spk_18: as you mentioned earlier a lot of the capital that we're spending right now and on our fibers small cell business and therefore a lot of the contribution of happening in that business as we ramp up the ah the know that will be putting on air we we talk about it'll likely lead to an increase been no capital that associated with that and i think that would have
spk_2: potentially come with additional capital contributions so i can't tell you that four hundred the right number six hundred right number because it's really going to depend on how quickly those that capital ramps up and how much we're going to get back from our customers i but there's no set level that i would say is something that you can expect it really tied to the amount of capital that we're spending to under threat because we're more for iraq are you from imagine
spk_1: yeah i was just kind of i is gonna go back up to the forty thousand foot level when we think about straight line straight line in the benefit of of receiving some of the upfront capital from the customers and how we know how we think about it
spk_18: that that up front capital from customers openly at the nothing offsetting are kept back to demand in any in any given year and one of the reasons why when we talk about the story
spk_5: and what we think the long term prospects of the business are with with them so much time talking about the dividend per share growth because we're looking at the cash flow capability of the entire enterprise over a long period of time and so a you know it's we think about managing capital investment capital the the questions that you're asking arena
spk_2: like an offset to the initial investment that we make and then were thinking about what is that going to mean over a long period of time in terms of actual cash for seep out in future period and and what of the impact the that a dividends and so we're providing that goes right thing to try to help everyone reconcile from the financial statement through the know
spk_19: rex and but if we talk about it and think about what the opportunity for return as we tend to go back all without the bottom line of dividends because we think it's best predictor of what long term shareholder value creation as an end up and and move away from to do all of the and now
spk_5: expansions beloved cat lover turns will have dividends last week like a probably me is the interest rate
spk_10: of days are teachers sponsored by twenty million other supplier guys what's your assumption now baked into what do you assume it's or sites are going to be that that trailer what was the delta let that cause that change changing obviously it's to continue to be fairly bottle
spk_15: the only the assumption of afford my burger and what that impact really is as the and fifteen percent of our debt that it floating rate that and and how much that live or carve impacts that fifteen percent tell when we gave guidance in october to now that live or curve is that the capital one hundred and one hundred and fifty bit
spk_1: britain that helps a lot those guys getting you say well i fact thank you for your next from john at can with rbc capital markets of
spk_15: thanks very much a couple questions what is hadn't you you kind of at estimates on course the in revenues but absent the state what objective the time ha the guidance i just wondered what leads to gallagher parent automatic caution analyst to the airport or slightly in and then second question and as we think about fibers solution so export fell for just a classic fiber like our and then or sorts of revenue streams what are the how how is that twenty hours or out of different and and that you see greater opportunities for and eighty areas where you don't feel that
spk_4: ab
spk_2: at john i'll take the first one am i'm not sure i got next to the fullest and your question of i don't answer directly leaders just ask it again i'm like we kept the the core leasing going forward because we think that the demand and our business is going to be very similar to what we anticipate
spk_4: knocked over the beat and the first quarter was mostly due to that nonrecurring items which is why we we call them out if you are move that from the tower business i the growth and flight rental believe is around thick percent for the quarter and that's what we're expecting for the year so i i don't think there's a a a change in that at all and it will result in in cut similar growth in the tower business going forward as as the year lays out that answer question
spk_20: it's ah it's a beautiful would pretty percentages of side that looking at the volume dollars of the about the beach and even if you're include the one timers it seems like that with flow through to get out what going to hire but that's and streetlight a judgment your outlook stayed the same so what your dollars how percentages are
spk_21: a magnetic in a of it does appear that incredibly the guides just just a bit more cautious
spk_15: yeah i say the guide is not cautious we're really excited about the of activity that we see coming and in in the growth that we're seeing in our business and what we thought about is the industry leading growth and the tower business we we don't guide on a quarterly basis
spk_1: so it's hard to reconcile that to the number you're talking to a but and or even we don't i did a quarterly basis is that we really do think about his business is jay talked about in terms of decade not quarters so the best we can get to is about a year and and and what worse what we're seeing again as is a real bad level robust level of activity that lee edited to tower leading growth and work we we actually don't don't feel like it's conserve illegally is a really good
spk_2: the outlet going into twenty twenty two and we're maintaining it because we see that activity level continue on your son that the camera on around five
spk_22: but i did you want to ask them another question on that
spk_15: no no future point and and i was gonna listen to your site and that on i don't know brick and mortar just ah on your second question around or what we're seeing from a fiber solution same point or we continue to think that will grow that business in and around that three percent level on a year over year basis of we've we've been good opportunities in the space and
spk_1: until like the team has done it done a great job and continued to run that business well ah and it creates a great base of assets as we've seen ah for us to be able to add more self to those to those that that her back to my comment early around the way that we think about capital spending
spk_15: the that fiber investment that we've made both in terms of acquisition as well as what we built our is based on what we believe will be future least up for small felt ah
spk_10: and the activity that we've won thus far as well as activity that we see the carriers investigating or that will be the future business we believe looks like the athletes are really well position for that so visitors performing well and and the opportunity for relief of his impact
spk_23: i'm editing and i'll athlete anything
spk_15: i am an hour ways to sort of call out as sharp as things kind of well off or yeah just escaping getting in general about that with to that out for the past we should be and michael out that might change in the future
spk_24: there's nothing to call out and quarter or that we believe will be in that get in night in the guy pretty thousand and twenty
spk_1: biden thank you but
spk_2: and guilty canucks question for nick to deal with martha nathan's and please go ahead
spk_14: hate money guys get you mentioned in you're prepared remarks that scaling your small cell the plane capabilities to get from your five thousand know the year to ten thousand plus in the coming years is is really are a focus for you guys can you talk about the specific steps you need to take any air easy to beef up to build up their deployment capability and maybe comment on your
spk_1: did on the degree to which any so city costs are baked into your twenty two outlook sure the morning nick part of the scaling activity frankly it as going ahead and doing work in this year for for note that we will turn on next year until at the reference to the activity that ongoing while the note won't turn on and calendar year two thousand and twenty two the work that we need to do in order to prepare to turn them on and twenty three as under is already underway
spk_25: way and we feel good about our ability to to get above that ten thousand nodes and in two thousand and twenty three and for years beyond that are we believe generally speaking the the the the scale of have felt that we have in the organization or sufficient to meet the backlog that we we have currently on should that grow beyond and
spk_26: and accelerate even further we have to revisit the costs structure but in general we believe the costs capture as laid out in the guidance to sufficient that handle that level of boy
spk_10: okay okay great and and then i'm have a prepaid quite i read question canada and with requests ask him at earlier when you typically receive pre paid rent for small cells your relative to the on air date and ended a large small cell contract you sign or the past year or so at contemplate prepaid read contributions consistent with history
spk_27: and just trying to understand you know how prepaid read for these new know just gonna float your financial us as the installation cadence picks up and generally speaking that the pre paid rent would be received in and around when they when they're installed the when we're counting them at on aaron in the metrics that we're we're giving you the pre prepaid rent would come in commensurate with that in terms of how we structure the wreath and agreement than what we're seeing a we haven't seen any change in the pricing of of the way that we've we've transacted with with carrier keep in mind that generally these things are priced on a return basis and and we within the pricing hold our over the many years that we've been in a business now the pricing it in the new note that we've recently contract it it is and system with that
spk_15: okay great texture
spk_1: thank you to canucks questions palm michael rollins with city thanks think of morning and to question that i kind of yet first and pat get a team is outlined that your tower locations skewed more irby and that would be an advantage know for location whether it's he banned or dish deployments and just curious if you think give us an update on how that might be playing out through your financial performance in your leasing perform that there's a way to quantify
spk_2: the advantage for grandmother's timing or in share an interest of a separate topic
spk_1: you have fiber you have towers
spk_2: is there a path for crown to take a more aggressive an active role in building out metro data centers or away and hard to go after carriers clouds and enterprise for this emerging mobile edge compute opportunity
spk_1: to the for the questions like of on your on your first question i think the activity as it has historically whenever there's an upgrade to a new technology it tends to the dollars tend to be spent in the areas that are the most densely populated in the us first
spk_2: and we certainly thing that trend in as five he had started to be deployed i think that one of the reasons why we have industry leading our revenue growth at six percent i also think it's indicative of what we're going to be on the small five and the vast majority of the investment that we've made a vibrant small so that
spk_1: then another top thirty markets in the you are is the locations where we believe the vast majority of the capital will be going
spk_2: for the densification efforts at least in the near the medium term and over the long term we think though that that much like towers have and those urban areas or the investment will skew towards that urban urban activity and teacher densification so with some of the best south that they are are in those dense urban areas with make would be a similar thing with vibrant also that with been historically with towers and are experiencing if we move into five g already with the tower footprint on your second question
spk_0: we certainly believe that there's an opportunity around at data centers and and come and have positioned ourselves several years ago with with our investment in paper or to take advantage of that opportunity i would put that in the category of that's an upside case brought if data traffic
spk_15: gets to the point where it's data centers become a meaningful component of the overall wireless network an upside cape and our investment in small fell and fiber
spk_2: we did not under right that and are based gave nor we underwriting it day to day as we invest and vibrant small self but if you're a believer that ultimately there's gonna be so much data traffic in the network that these metro data centers for edge data centers are going to be necessary for wireless we're going to be in the upside outcome to for our small felt and fiber and done so we're certainly positioned well for that opportunity and earth and i would say today it seems more probable that that the likely outcome than what we would have said several years ago but it's not in our base cape underrated we think about what the grantham and returns will be on the on the on the outset that there are certainly some scientists referenced earl
spk_1: layer and some the questions in the question around a fixed wireless that with the just say that opportunity it is growing and and becoming more likely and that i would start first with the benefit we're going to get out of fiber and small felt as a result the that and i think we're really well positioned to the the be the fiber and our investment in and baby for the benefit if we get all the way to the upside cases where where the fetch data centers are necessary and and critical component for the wireless network
spk_2: thanks
spk_28: a tumor who next from silky sick with jp morgan
spk_10: i guess you know just a a summer and i apologize if it does as your this already but as you think about the activity through this year you expect activity to to be ramping through this year it it sounds like it and then do think that can be maintained next year or or are there other care
spk_15: is that or said it can be coming down the expect thank you
spk_2: bill at it as well as we think about any given year and i think we thought about some on the with try the winters and the one time item for the first quarter we think about the guidance and the outlook on an annual year over year basic could we can get the best way to look at the business know if we get further into the back half of the year may we can be a low a bit more descriptive about the ramp an activity and what we're seeing as falling into the first half for the first the second half of the year but in general that is shaping up to be a pretty normal year in terms of the way the the the activity at loaded into a into a calendar year i don't want to really get into giving guidance for two thousand and twenty three
spk_5: we typically are historically have done that in october and we would expect to do that again this year so out where to call the way from given your outlook for two thousand twenty three
spk_15: i guess thank you thank you take a next question from semi but padre with credit suisse
spk_1: hi thank you very much for the question how could you provide any color on what level of activity that may be falling outside of your family structures but the carriers
spk_29: demi there's always some of this activity that that were doing that if that will fall outside of the outside of the the structures and that that is a little bit last quarter the carriers historically as we've worked with them will give us a base level of commitment of the other areas that they know for sure that they're they're going to deploy
spk_1: ah but there's always activity or had been historically always activity that fall fallen beyond and outside of those those agreements though not probably not going to get to the point where we reconcile that ah down to the for the agreements versus we're we're actually the and but there is activity that fall outside of that both in the tower business with martha business as well as low as well as the services business so we have we have more activity them contemplate contemplated as we thought about that can
spk_2: he did to grow with gone into the calendar year and and excited about what the implications are too far not for the or and then some of these emily's resigned quite a bit know quite some time ago
spk_30: when you look at twenty twenty two and twenty twenty three is it becoming increasingly likely that there's a lot of business activity that falls outside of the family structures that i think and the majority investment community actually thought was gonna be more in scope to the mls has their kind of guy their been a big change or the something
spk_0: incremental and than what a lot of maybe a people internally a crown has have thought and has seen
spk_31: i think i want to be careful again i will talk about two dozen twenty three guidance as weak as we get into our as we get into october
spk_32: broadly though if you look at what's happening
spk_31: in in terms of demand for five the network the devices being available and the way consumers are using them the the benefit of lower latency and higher speeds are driving more traffic and we think that is a trend that we will continue for multi multi years into the future and it's what give them confidence that are seventy eight percent growth in the dividend is going to continue for period beyond just the just the
spk_2: near term so we we think we positioned ourselves and a place where we own the assets that are going to be necessary for that five g deployment with with the towers and small fell and and certainly the opportunity that could drive beyond our seventy eight percent seventy eight percent growth but we'll we'll wait till we get to the period to start give you more specific guidance around when when enough that that activity showed that how to thank you
spk_33: a killed the next question for other paycheck with like said
spk_2: banks j i want to go back to your comments on
spk_1: when he called i guess and publicist the traditional enterprise fiber stuff fiber solution i guess is you're caught when you call it
spk_2: he talked about three percent growth by an eye looks like growth was more elevated in the first quarter
spk_34: he talk about you know kind of what the components are there and are you just basically being conservative in terms of your three percent and growth outlook or is my map just wrong
spk_35: the more love your your mouth not wrong or we were elevated in the first quarter again we give guidance on an annual basis based on the timing of certain things the and the now that happen over the course of the year we mentioned last quarter or that as a part of the some of the integration work we would expect a about ten million of
spk_2: turn in that business in the back half of the years so that will have an impact on
spk_14: how the business runs for the for the ballot to the erm bring bring it back into it
spk_36: the a little bit lower
spk_37: though
spk_31: that of the albion the back half of we think it'll become midyear back half of the year as with but the last last quarter but
spk_1: all in all the businesses performing as we would expect in around that three percent growth and importantly it becomes kind of a base of return and yield on that fiber asset that upon which we can add more felt so
spk_2: proud of the team and how they've done managing the business and most importantly in terms of what drives the return on that off that over the long term obviously the fault not the started shop and significant scale and and using that same fiber at that i will drive the returned from the yield on the after him all the only other day event like that
spk_38: there is that sorry go ahead of him
spk_10: i've i'm time
spk_39: i'm dying out added that the the ten million dollars at one time that we talked about in fiber solutions hit the first quarter if you back that out i think that's partly gives you a better baseline from which the to do the math that you're talking about and see what the growth rate looks like and you'll see that that is is closer to around that three percent than why i did just on the on the face of it the number to look like for the first quarter
spk_26: got it and then
spk_1: when you just look it up is just a qualitative question
spk_2: are you seeing a interest from fiber older builders that like smaller guys private equity fund it or or in a venture funded better looking for some of your strength in order to take florida the home and that has up in an element of your business that you've seen yep that's been picking up or is different than historically
spk_1: palm i would say there are some opportunities where we can use our fiber as backbone for some of those bill that would go into places that would not be court our business we have been some of those opportunities and have captured some of those their tangential really to places where we would have fiber
spk_2: or government enterprise university is that the to the core of our fibers foolish and business or the places where we would typically built be building small belt but our network t be a backbone component of of the bill the entered into more residential area in which seem to have the opportunity
spk_1: right thank you
spk_2: thank you to go next question from great lanes of count
spk_1: great thanks for taking my question performed some small south and at at that cat back next year i'm at how many new nodes are you building and twenty twenty twenty twenty imagine the five thousand and thousand and ten thousand parking spot the have a new actual physical not versus yeah or collocation on existing know i'm second question system
spk_0: on your emily structure particular that i is concerned horizon on the out there to telling a the and apply monolithic a be he category might come in all sooner i'm will you be able to recognize incremental revenues and and even us from that arse it's structure in the em away where where at that time to spend an extra hierarchy
spk_40: him is already back then thanks
spk_26: and your first question the knows that will put on air and twenty two and twenty three are a mix of anchor build and color occasions and
spk_2: i will get into you know time passes will continue to give you the cat that updated at at in but this calendar year and two thousand and twenty three and i that i think for planning purposes you should you should think about as a mix of activity as what we have done historically and we've talked about this and and prior quarters but we would expect back to ramp as we're ramping towards higher higher volume of of activity i'm one of the thing and i think you understand a break from the way you ask the question but when we're talking about know where we're not making were not distinguishing note that are the anchored built node versus the coal okay to note we would refer to both the the initial node as well at the color coded note at a small scale nerd so those five thousand would be a mic the boat anchor and up and cooperated note when we talk about five thousand and two thousand and twenty two and and more than ten thousand and two thousand and twenty three on your second on your second question around
spk_1: the animals a structure in the and the activity that we're seeing that's probably a level of detail beyond what we we want to go and from the discussing the way customers are thinking about their build an activity and generally i refer to my by prior comments around there's a significant amount of committed activity over multi years that we have from our customers and
spk_2: we believe there will be activity beyond that committed level that will see from the carrier with they built out there build up to five the networks an operator let's take a maybe one more question hey thank you take a final question from david trainer with cream street
spk_1: thanks an account castle it mentioned in the news last month about expressing interest center our quickly on india and i know you you probably don't like i'm an hour mark and remarks which is fine but the committee talk about to hit team underwrite international acquisitions internally and then also if he could you share your openness to international expand yeah that that's changed at all in the past three quarters
spk_0: thanks for the questions david
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