Crown Castle(US:CCI)2023-01-26 19:12Financial Data and Key Metrics Changes - For the full year 2022, site rental revenues increased by 10%, adjusted EBITDA grew by 14%, and AFFO rose by 6% [5][74] - The growth in site rental revenues included a 5% organic contribution, with nearly 6.5% growth from towers, over 5% growth from small cells, and 2% growth from fiber solutions [5][71] Business Line Data and Key Metrics Changes - The company expects to double the rate of small cell deployments in 2023 to 10,000 nodes, with over half co-located on existing fiber [75] - The backlog includes approximately 60,000 nodes on air and another 60,000 contracted, indicating a sustained acceleration of growth for the small cell business [75][32] Market Data and Key Metrics Changes - The company reported that about half of its sites across the top three customers have been upgraded with mid-band spectrum, presenting a significant opportunity for revenue growth as additional sites are upgraded [2][63] - The company anticipates that the second half of the remaining towers will be upgraded to mid-band spectrum, similar to the timeline for the first half [66] Company Strategy and Development Direction - The company is focused on capital allocation to ensure high returns, emphasizing the deployment of small cells and fiber over acquisitions [38][105] - The company aims to grow its dividend by 7% to 8% in the long term, supported by a strong pipeline of 5G investment opportunities [79][103] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth opportunities associated with 5G, highlighting the need for significant network investment to keep pace with increasing mobile data demand [102][79] - The company expects the rationalization of Sprint's legacy network to impact financial results, with approximately $30 million in new non-renewals and $160 million to $170 million in accelerated payments anticipated for 2023 [78][90] Other Important Information - The company issued $1 billion in senior unsecured notes to strengthen its balance sheet, resulting in over 85% fixed-rate debt and approximately $5.5 billion in available liquidity [6] - The company has invested over $40 billion in capital for towers, small cells, and fiber, generating a 10% return on total invested capital [76] Q&A Session Summary Question: What is the outlook for small cell leasing and the backlog? - Management indicated that small cell leasing activity is expected to continue, with a combination of large-scale agreements and smaller projects [95][92] Question: How does the company view the transition from 5G builds to densification? - Management noted that there will be a mix of upgrades and new sites, with a focus on areas where data usage is increasing [66][102] Question: What is the expected churn rate for small cells? - Management suggested a long-term churn rate of about 1% to 2%, with minimal churn observed to date except for the Sprint-T-Mobile consolidation [114]