American Tower Corporation (AMT) Earnings Call Transcript & Summary

Thanks for joining us. My name is Phil Cusick. I follow the comm services and infrastructure space as well as media here at JPMorgan. I'm delighted to welcome Rod Smith, CFO and Treasurer of American Tower. Rod, thanks for spending time with us today.

You're welcome. Good morning, Phil. Good morning, everyone.

Nice to see you. Starting from a very high level, as you look at all the markets where you operate around the world, do you think we're in a sustained period of higher activity in the next 3 to 5 years versus what we've been in the last 3 to 5?

Yes. I think we're in a great spot, particularly American Tower with its global portfolio, having over 220,000 towers in the U.S. and also in 24 other countries around the globe. It's probably -- our portfolio is too broad and diverse to kind of paint it with one brush, certainly different countries that we're in are in different stages of development, and there could be kind of local events and local build-out. So it could be different from country to country. But generally speaking, when we look at the regions that we're in around the globe in the U.S. and Europe and Africa, Latin America and in India, we do see growing mobile data consumption across those areas. They're all at different stages of development. In the U.S., in particular, I think we're in a great spot here as companies, the wireless companies are all racing towards 5G, deploying 5G. We'll see that happen with new spectrum coming into the market, the C-band spectrum primarily. That will require some upgrades to the towers, and that will be a good revenue cycle for us in the U.S. We also see all the carriers active again, T-Mobile, AT&T and Verizon as well as DISH coming in this year and building out their network. So that will be an added boost to our growth and certainly tower company growth for years to come. We see Europe in a really good spot. They're in the same position where they're beginning to transition to 5G deployments. We also see healthy accelerating organic gross growth in that market. We see a reduction in churn in that market as well. And we did the Telxius transaction not too long ago, which was the portfolio of towers from Telefónica primarily in Germany and Spain, but also a couple -- a few countries down in Latin America. And that our combined portfolio now in Europe, we're projecting about 9% organic growth in that market. Last year, we were at about 5%. And before that, we were at about 3%. So we're seeing an acceleration in growth in Europe. So the timing and the quality of the Telxius portfolio has been really, really, really good for us. And then when you look at India, Africa and Latin America, they're all at different stages of development. We are seeing good organic growth there. There is a little bit of accelerated churn in Africa and in Latin America from the last couple of years. In India, we're seeing a nice recovery from some of the challenges that we've seen in India. So we're in a really good spot globally. I think when you think about growing mobile data consumption and the demands that, that puts on networks, our portfolio is in a really good position to benefit over the long term.

Let's follow up on Europe first. And I think it was interesting when you bought Telxius, the biggest pushback I got was the market just doesn't grow, right? How are they going to pay this price when the market doesn't grow? And so talk about what has driven that acceleration you've seen both in the towers you own before Telxius and also in that one?

Yes, it's a great question. I would say we're projecting 9% growth in Europe for the portfolio we have today. If you look at just our legacy portfolio, that's projected to grow at about 6%. And again, a year ago, that was a couple of hundred basis points slower growth. And I think everyone here certainly knows growth comes in a few different flavors. You do have the gross organic growth, you have an escalator in there, then you have churn. And in Europe, in particular, we're seeing growth on the gross level. So with the companies building out their networks, improving those old qualities of coverage, capacity and the overall quality in the network, that's becoming more and more important in Europe. So carriers are focused on that as they compete with one another. They're in the process of transitioning to 5G and making those network investments. So that will be a revenue cycle that we're seeing the beginning stages of there. So we're seeing an acceleration in gross growth. The other thing that we're seeing is a reduction in overall churn. So the European market, one of the things that held the overall organic tenant billings growth in Europe down over the last 5 to 10 years has been accelerated churn because there was cell site pruning or removing sites in that region where the carriers originally built a lot of towers right next to one another. And over time, they had to take some of those out. Some of that was mandated and regulated, but there was an elevated level of churn. That work is primarily done now. We're seeing churn rates come back down into that 1% to 2% like we enjoy in the U.S. At the same time, we're seeing gross growth go up. And that was one of the reasons that we were really excited to get the Telxius portfolio because the market was transitioning to a much more constructive market in our view. And then on top of that, the portfolio that we purchased, we think is the highest quality that we've seen in Europe. The terms and conditions on contracts that we were able to secure were like none other that we've seen in the last several years trade there. We're seeing the benefits of that now. And the only other point that I would make with Telxius is much of the revenue comes from Telefónica, which is a high-quality partner of ours, not just in Europe but also in Latin America. And there will virtually be almost no churn from that revenue stream in those contracts over the long period of time. So that certainly helps underpin and sustain organic tenant billings growth.

Yes. So that's what I was thinking about when you said lower churn. So it's not just wrapping in the Telxius assets with essentially 0 churn, but your legacy base of towers you're seeing lower churn as well?

Yes, absolutely and higher organic gross growth. So again, the legacy business without Telxius in it is up to 6% growth. That's a couple of hundred basis points higher than what we've seen in the last couple of years.

Okay. And again, you said that you think you're through that consolidation churn. Is that because you've seen carriers in Europe go from sort of owning their own towers, building their own towers, where the U.S. might have been 20 years ago to more of a shared secure model? So if they collapse those 3 towers in 1 place into 1 that's shared?

Yes, I think that's right. So they're going through their development process, and they're in the stage of now outsourcing their towers, but ahead of that, they were rationalizing the overall tower count across cost Europe and taking out towers that really weren't necessary, kind of getting their expense base under control and in good shape for the future. So a lot of things happening in Europe, all of them good. And we also have Drillisch 1&1 in Germany at the very early stages of building out a greenfield 5G-only network in the country. So Germany is where we have the largest concentration of assets. We have the legacy assets as well as the large chunk of the Telxius assets in Germany. And we expect that our assets in Germany will benefit over the long term from one-on-one.

That is where I was going to go next. So the acceleration in growth you're seeing, how much of that is being driven by Drillisch versus just legacy carriers really picking up their structure?

Right now, not much at all. So when you think about the 6% growth on our legacy portfolio, 9% growth on the whole portfolio in Europe, very little of that is Drillisch 1&1. So as we see Drillisch 1&1 build out their network, that's kind of an incremental bump that we have yet to benefit from.

And how involved are the regulators in Europe in towers at this point? Do you think that there's opportunity for more consolidation among towers? Or is the regulator starting to sort of watch that?

The regulators are much like the regulators in the U.S. Country by country, there can be differences there. But certainly, when you see concentrations of towers that get well above 50% within the market, we think that that's an area where you have to put a little bit more work in, in terms of the regulatory environment and working through the governments and the regulations. They are were below 50% in all the markets that we're in. We still kind of look at that market. And there's plenty of places for us to continue to grow. But I think when you see a market where the tower company potentially jumping over that 50% mark, there would be a healthy discussion, I think, with the regulators at that point.

Okay. All right. Let's shift gears back to the U.S. And I've asked this question before, but we've talked about a multiyear build-out cycle for 5G. And yet a couple of carriers are saying that they're this year at their peak of CapEx and going to start heading lower over the next couple. How do you sort of reconcile that multiyear faster pace with carriers slowing down their spend pace?

Yes, I mean it's a great question. I would say not all their CapEx is dedicated to or gross tower revenues, right? So you could see a reduction in overall CapEx from the carriers. It doesn't mean you're going to see a reduction in the activity or the CapEx that's devoted to putting up new antennas and leases. A lot of their CapEx early on to get their network up to 5G will be software-related, some hardware, some core investments. Over time, well beyond the first year or 2, when you see more and more 5G handsets kind of hitting the market and getting into the hands of subscribers and you see software developers creating the applications, the 5G applications that will run on the 5G networks that require the lower latency, require the higher capacity, that will begin to increase the demands on the networks, and you'll see the carriers then have to put up additional antennas, bring in additional mid-band spectrum, potentially upgrade to cables and lines that go up. So a lot of the CapEx in the future years will be at the tower sites to keep up with that -- the demand is on a cell site by cell site basis. And that's what in this industry, I think everyone is familiar, we call that amendment revenue, right? Once you have a carrier that's in the -- that's on the tower with a core installation, it's almost a just-in-time kind of an installation and it's meant to handle the traffic and the data consumption that's happening at that site for the next several months, 6 months or so. And then if that data consumption goes up more rapidly or as it goes up, the carrier tends to come back and they retouch that site. They put up more antennas. They bring in more spectrum in order to handle the additional capacity requirements, and that's typically what we refer to as an amendment or amendment revenue. So one thing that's important to point out, and I think most people know, in a 5G cycle, the carriers will touch a site multiple times in 5G. You don't touch it once and call it 5G and never go back and visit it. You have to keep up with that demand that's happening at that site. So they'll touch it repeatedly over and over. Sometimes multiple times in 1 year and certainly many times over many years they'll come back and upgrade the equipment at that site.

We've heard a lot about DISH in the last few years coming in and being a driver for towers. But of your revenue sort of gross ramp this year, leaving the churn aside, how much of that is DISH versus other things happening and then sort of DISH still to come?

Yes. DISH is kind of coming on this year. So last year, there was virtually no incremental revenue from DISH. This year, we do see step-ups in the DISH revenue. Early in the year, there's the first kind of bump up of revenue that we get from them. And with DISH, I should just explain we do have a multiyear long-term agreement with them that has step-ups in the fixed amount of revenue that they pay us. This year, there'll be a few of those step-ups starting in the middle of the year and then more at the end of the year. So as that revenue steps up, you'll see the bigger benefit of that in our organic tenant billings growth next year, particularly for the step-ups that happened later in the year, in the second half of this year, you'll get a full year of that revenue next year. So it is beginning this year. It will have a larger impact on our growth next year than it will this year. And then again, it will have a larger impact a year after. So DISH is in there and is certainly one of the drivers to our longer-term growth that we put out in the U.S. We are looking for our U.S. business. From 2023 going out to 2027, we're looking at roughly 5%, maybe greater than 5% organic tenant billings growth on average for those years. And that is on a reported basis, including all the Sprint churn. If you were to normalize for that Sprint churn, we'd be averaging at or above 6% growth. So that's an acceleration of growth in the U.S. That's where we see that coming from the level of activity that the carriers are all undertaking and much of that is driven by their transition to 5G with the addition of DISH kind of in there, ramping that up. That 6% is an average from 23% to 27%. So there will be different peaks and valleys. And there will be -- we'll be above 6% in our view. In much of the revenue, not just the base revenue, but the growth in revenue that make up that assumption is already contracted. So over 2/3 of that of the base revenue and the gross revenue we have is fully contracted, noncancelable, doesn't terminate within before 2027. So we've got a lot of visibility into the numbers and the revenue growth that we see in the U.S. and we couldn't be more pleased with the way the U.S. is shaping up and kind of where the market is headed.

I want to make sure I understand the comment you made about DISH. We hear rumors about DISH is going faster, DISH is going slower. It sounds like it doesn't matter, you have fixed setup step-ups almost regardless of where their equipment package is at that time.

Yes. Yes, you removed the word almost, and you've got it exactly right. So yes, we have a contract with DISH with fixed revenue and fixed revenue step-ups that will be over the long term. And the way DISH is built into our projections in the U.S. organic tenant billings growth that long-term projection that we laid out that I just discussed from '23 to '27, it's basically the contract. So there's nothing that can interfere with that in terms of the pace at which they deploy assets because that doesn't change the way that the step-ups in revenue occur over time. Now with that said, we work very hard to help DISH achieve their goals and to build out their network. They are also a customer of ours on the services side. So we do a lot of services, which is deploying antennas and cables and lines and getting the network up. And you've seen some of that in our services numbers. This year, we're projecting $225 million of services revenue. Last year, we're about $250 million. And that's a significant step up from the historical run rate, which if you go back to 2020 and before, it hovered right around $100 million of services revenue, give or take, $10 million to $20 million. So we've almost doubled the pace of our services business. And that really is the clearest indicator of the level of activity that we're seeing in the market here, including with DISH.

Is that services revenue expansion and expansion as well of what you do? Or there's just so much more of what you do to be done?

Yes, it's really there's more of what needs to be done. So we haven't made any dramatic changes in terms of the mix or the type of services that we provide to the carriers. It's all the traditional engineering A&E kind of work and project management work that we've done for years. So when you see the doubling of the services revenue, it's really a doubling of the activity. It's not anything to do with kind of the types of services, at least not in any material way. And we're seeing margins come through on the services side in the same range as they've always been historically in that mid-50s. Last year, we were a little higher than that because quite frankly, we saw an acceleration in services and our internal teams were working like crazy to satisfy that increase. And we levered that human capital and ended up with much higher margins. We've now kind of grown into this new services kind of plateau or run rate. So we've got more employees in there to do the work. We've got more contractors to do the work. And we're seeing our margins kind of settle right back down in that mid-50s, where they've always traditionally been and where is a good place for them to be for us.

Mid-50s sounds like a good business except your main one is 90%.

Yes. Right. Yes. Yes, I think it's a great business to be in. It's certainly additive. It helps the carriers get things on our towers, which is supportive of their business, and it helps our -- of course, our leasing revenue. But then also the services work does drop down to AFFO and AFFO per share, which is really good.

How much of that increase in capacity have you contracted as sort of internal employees versus contracting external services companies to do fixed versus variable as we flex this revenue?

Yes. I would say it's not really necessarily a percentage and a mix. It's the different types of activity. So the engineering work that we do, we do that primarily in-house. All that is done with our -- we have a big engineering firm located down in Cary, North Carolina. They run all the engineering models. They do all that work. A lot of the project field-type activity we outsource that to contractors. So it's not necessarily just a percentage in and out, it's really the mix of the revenues that we have and the types of work that we do and keep internally and the things that we can outsource.

Okay. As interest rates and inflation sort of rear up, one of the questions I get is how did tower revenues -- not services revenues, but tower revenues flex over that? You have long, long contracts with all of your customers, where the only sort of variable is on the amendment. Are those amendments sort of structured as well in price over a long period of time? Or do you have some flex there if you needed to as inflation rises?

Yes, it's a great question. I mean in terms of inflation, there's a couple of things that I would say. Maybe I'll just level set, we get revenue really from 3 different places. We get revenue, at least on the leasing side. It's new co-locations, so a carrier installing antennas on our tower for the first time on that tower. Of course, DISH is doing a lot of that. That's what they're doing now. Then we get an escalator on top of that. Every year, the rent goes up. In the U.S., it goes up by 3%. In India, it goes up by 2%. In most other regions and countries we're in it goes up based on inflation. And then the third one is we get amendments. So as capacity demands go up on any given tower, the carriers come in and they put more antennas and lines to augment that installation. They bring in additional spectrum to be able to increase the capacity of that site. So that's an amendment revenue. Much of our revenue in the U.S. is under long-term contracts. So a lot of the amendment activity is kind of consumed within those holistic agreements. We do have 3% escalator kind of across the U.S. business. So that's something that happens every year. Our revenues go up 3%. And then the other piece on the co-location side, in some of our holistic deals, there are some co-locations included, but in many cases, not a lot. So as we see 5G take hold in the U.S., we do think we'll see a shift from primarily amendment-driven revenue growth for us and an increase in co-locations. We're seeing that, of course, with DISH. Some of the other carriers are transitioning to more co-locations than they've done in the past. In others, once they get the 5G networks kind of up and running when they get their base networks fully 5G as they -- as capacity increases on a site-by-site basis and they bring in more spectrum to add cables and lines and antennas. At some point, you max out what you can do with that site, and that's what we call cell site splitting and then you transition into adding additional cell sites into the network. So then you would see new co-locations kind of popping into the network to augment the existing ones. We do think that, that will accelerate as we get into 5G and these cell sites are going to be asked to do more and more and more in terms of processing mobile data consumption through these antennas and cables and lines. And then the other thing, I guess, when it comes to inflation, we do have most of our regions outside of the U.S. with the exception of India, are all inflation-based escalators. So this year, we're seeing 8% inflation or escalator, I should say, in Latin America. That's because you're seeing higher inflation in Latin America. We're seeing a little over 5% escalators throughout our Africa region. And again, that compensates us for the inflation that we're seeing in that region. The other thing I would say is many of our expenses in those markets are pass-through expenses. So some of the land down in Latin America, even in Europe, some of the rooftop in Europe, that gets passed through to the carrier. So as inflation takes hold there, all those expenses just get passed back through to the carrier. All the power and fuel that we consume in Africa and in India, the power costs are going up, but that's a pass-through expense that we pass right through to the carrier. So in our revenue, we have about $1 billion of revenue that really is direct pass-through primarily coming from power and ground rents or rooftop rents.

So just sticking with the U.S. for 1 more second there. For virtually my entire tower career, I've watched carriers talk about getting their tower expenses lower. And one of the things they focused on was inflation is 0 and escalators are 3% and drove them up a little, baddie. So as inflation goes potentially above 3%, do you have any conversation about, "Hey, listen, we need to grow faster. We need more escalator or the effective escalator hire through amendments over the next 5 years versus the last 10?"

Yes. I mean, certainly, there's all kinds of discussions around the use of our towers the way the carriers want to use them. They have big plans for their individual networks. Tower assets are a big part of that. So there's all kinds of discussions about ways we can help them by providing them more and more tower space. When it comes to the escalators, we do have 3% escalators in the U.S. Inflation in the U.S. has typically, and over the long term historically, has been under 3%. In 2021, it was just under 5%. And in 2022, it's estimated to be just under 7%. When you get out to '23, '24 and '25, the government projections bring it right back down to 3% for '23 and below 3% in '24 and '25. So what I would say is we are very long-term holders of tower assets. We're long-term investors. It wouldn't make sense for us to push to try to change those contracts with an outlook suggesting that we'll be back below 3% by 2024, and at 3% inflation in the U.S. in 2023. So we do think the long-term outlook for the U.S. is still with inflation in our escalator kind of fairly well matched, right? It's not going to be this year and it wasn't last year, but that's okay. We benefited over the long period of time with the escalator. But then again, the other thing I would say is that escalator is just part of the compensation we get for leasing our towers to the carriers and our tower assets are highly valuable, really critical assets for the wireless carriers to use. So it's all part of the overall revenue structure there. And we fully intend to keep that 3% in place. We've protected it over the years, and we're not going to make a short-term impulsive decision because inflation goes higher in the U.S. for a couple of years.

Okay. I want to ask about India quickly. India has been a long international market for you and has been consolidating for much of the last 10 years. It seems like we're past that. And I think you're guiding for a couple of percent growth this year. Are we at the cusp of that of a real acceleration in that market?

Yes. I mean we certainly think that that's possible. We've always had a very good outlook in terms of what we expect from India over the long term. There has been volatility over the last several years. We've seen carrier consolidation happened in that market faster than we expected it to happen, which in the short term is not good, but over the long term, could be good kind of getting that consolidation behind the industry. Now in India, we do see 3 players with RJio, Airtel and Voda Idea and a fourth one with the government agency, the government-backed BSNL, which has a wireless network in that market. RJio and Airtel are doing just fine. Voda has been working with the government around their adjusted gross revenue fees and penalties and interest there. The government has given support to all of the carriers that have those fees and obligations where they have a much longer time now to pay those fees. So the short-term balance sheet crunch has been removed. And the carriers now have an option to actually pay the government with equity instead of cash. And Voda has chosen to do that with some of theirs as well. So Voda is much more secure now than they have been in the past. Airtel and RJio are doing just great. And BSNL is also positioned and planning to upgrade their network to a 5G network -- a 4G network and then a 5G network over time. So we expect all 4 of those carriers will be in a position to spend and compete with one another and build out their networks. India is a place with over 1.3 billion people and they've got in the range of 500,000 to 600,000 wireless transmission points. They need probably double that over time to make that market really functional. So there's no question in our mind that there's a big demand for tower assets in that market. We've been patient. We continue to be more patient. We did -- we are now projecting organic tenant billings growth up to -- between 2% and 3% this year. It will be the first year in probably 5 or 6 years that we've had positive tenant billings growth. We've gotten -- the churn is coming down now to mid-single digits. That's the lowest we've seen it in quite a while. We think that there's still room to bring that down more as well as bring up the overall gross growth in that market. I would just say that we do have a long-term guidance to grow AFFO per share in the range of double digits, 10% AFFO per share growth. In that long-term guidance, which goes from now until 2027, and that's an average number over that period of time. We're looking at kind of lower mid-single-digit growth rates in India as part of that assumption. So we're not projecting going back up to 10% growth in India over the next 4 or 5 years. It's certainly possible, but we're not projecting that in our outlook. We're really looking at getting that market continuing to have a head in a positive direction, getting from 0 organic tenant billings growth up to 2% or 3% this year, maybe going from 3% to 4% next year and 4% to 5% kind of the year after that. So a pretty conservative view, I think, that we're taking on India. There's certainly a lot of reasons to expect that, that market could recover quicker and do better, but we are approaching it with a prudent amount, the right amount of caution, I would say.

That makes sense. Makes sense where we've been. So let's switch gears to data center a little bit. You've bought CoreSite, you sort of bought a few things and then you really stepped in with CoreSite. Just to start, do you think that this is a -- are towers a distinct asset class in 5 years? Or is this the beginning of a sort of digital infrastructure broadening of your business model over time?

Yes. I would say certainly, digital infrastructure is what you hear a lot of, and it includes -- broadly speaking, everyone has their own definition. But certainly, the mainstay there, tower assets, fiber assets, data center assets. So I think the term is really a fine term and it describes the digital infrastructure. It doesn't mean that you have to own all of them to be able to function, right? I do think towers will be a distinct asset class. It is now and it will be in the future. It's real estate that the wireless carriers need. It's critical real estate within these wireless markets, and it will be for the long haul. And we are a tower company. We've got a portfolio of towers across 5 continents, 25 countries that tops 220,000 towers. So make no mistake about it. We have been, we are today, and we'll continue to be a tower company. We have made a few small investments here and there, certainly to test different things, make sure we're keeping abreast of the network changes and requirements. So we've got distributed antenna systems in the U.S. We own in-building networks in the U.S., where we own the electronics, the fiber, and we transmit the signals within buildings. We own some broadcast assets in the U.S. We have the outdoor distributed antenna systems. We do some microwave backhaul here and there around the U.S. So we've always done a lot of different things within this massive and very successful tower company. We've recently increased our fiber footprint here and there, not significantly, but we do own some fiber down in Latin America. We own some fiber down in Africa in certain markets. And we just bought and we're building some fiber laterals, fiber to the tower basically in the Spain market for Telefónica. So we've always been in different types of assets in ways that we think is perfectly prudent. We always do it with an eye towards driving additional revenue to our tower sites. One of the things that makes towers really valuable is getting them transition to 4G, which requires the carriers to use new spectrum. When they bring in that new spectrum, they get more capacity, bandwidth within that spectrum, that requires more cables, more lines, more base radios up in the towers. And the trigger point for that is making sure you have fiber to that site. If you don't have fiber, then all that other work doesn't make a lot of sense. So by getting fiber to the towers, it unlocks a whole amendment cycle, a whole technology upgrade. So in some parts of the world, carriers want us to help them do that, and we're happy to do that. So we get a good return on the fiber lateral we build, and then it unlocks the revenue potential of a new technology on the towers. So we've done a lot of different things other than towers. That doesn't mean that we're not primarily and focused on towers because we think it's a really good asset. We do it exceptionally well, and we've got a great portfolio around the globe. With all that said, we did just recently buy CoreSite. It was a little bit bigger than some of the other things we had done. It was a $10 billion purchase price. But CoreSite for us represents a very unique set of assets. It's in 8 core markets for us, well distributed across the U.S. So the locations here are important. They're up in the Silicon Valley. They're down in L.A. They're in Chicago, down in Denver. They're up in Boston, New York and then down in Northern Virginia. These 8 locations have about 24 buildings kind of spread across them. They're all campus architecture, so they're all connected back into one another. And the thing that makes these assets very unique is that they are cloud-centric and network-centric facility. So all the cloud players are in these facilities. With all the cloud players in there, you get all the networking companies want to get in there. So we have lots and lots of networks in these facilities. When you have facilities with the network companies and the cloud companies in there, that's what draws the enterprise customers in, and then they start connecting to each other. They connect to the networks and they get into the cloud. And as you see that ecosystem really develop, that's what makes these facilities really high quality set of assets. These are not facilities where enterprise customers are parking their servers and we're keeping them cool and feeding them with power. These are cloud-centric network dense, high-quality, very unique set of assets, one that we don't think could be easily replicated. Certainly not in any reasonable amount of time. The demand for these assets are really high. We see 3% to 4% growth in annual cash-on-cash revenue growth. That's when our lease within these facilities comes up for renewal. Many data centers see a reduction in revenue. We're seeing a 3% to 4% increase by and large. We're seeing 6% to 8% churn, which is on the low end of churn for this industry. And we see a solid 6% to 8% economic growth in this business over the next several years. This year, we're projecting that to be above 8%. And that's up at the revenue level, so we think we'll do better as you kind of come down towards EBITDA and AFFO. So we see limited downside because these are such high-quality assets. It's a U.S. asset that's not easily replicated, and it's accretive to our U.S. growth rates. And then we have the upside optionality to have that -- work with the cloud companies, the network companies that are in there are wireless carrier customers and pushing these cloud on-ramps out to our tower sites, really to drive additional revenue to our tower site. And it's not just about satisfying the needs of the wireless carriers, the cloud customers may be the first movers and sort of distributing their cloud on-ramps all over the country in ways that they get closer to networks, both landline networks and wireless networks and get closer to enterprise customers. So with our 40-plus thousand assets in the U.S. with the base radios and wireless carriers already there, we have space, we have power, we have telco. Now we have really good, high-quality cloud on-ramps and network dense facilities with lots of enterprise customers spread out in a very beneficial geographic way around the U.S. where we can push those on-ramps out to our tower sites. For the purpose of connecting in local landline networks, wireless networks and enterprise customers into these facilities, they would be much smaller than a traditional data center, and eventually, we would probably have compute power and maybe content right there at the towers edge too. And again, it wouldn't just be for wireless carriers, but it's for the whole network media kind of consumption.

Good. That's a good place to leave it. Thank you, Rod. And great lead-in for Charles Meyers from Equinix, who will be sitting here in about 34 seconds. Thank you very much.

Thanks, everyone.