American Tower Corporation (AMT) Earnings Call Transcript & Summary

All right. Let's get started. Good morning. For those of you who don't know me, my name is Greg Williams. I work at TD Cowen covering the cable, wireless towers and telco space. Joined today at this session by Steve Vondran, EVP and President of U.S. Tower Division for American Tower. So Steve, thank you for joining us. Appreciate it.

Thanks. Happy to be here.

Maybe before we get started into my questions, just one question I'm getting a lot from investors is your exposure to U.S. Cellular. There's chatter that they have strategic alternatives, and they just want to know what the churn risk for you guys could be?

Sure. So our total business with U.S. Cellular is less than 0.5% of our global property revenues.

Okay. So miniscule amount, okay. And then the big topic we want to talk about is just this U.S. 5G slowdown. The U.S. Tower 5G deployment slowdown clearly seems to be harsher than expected. We saw Crown with their lease guide down. But you also took your services revenue down. So it feels like to me that the industry was surprised to an extent. You did raise your service -- your property revenue guidance to at least 220 if you want to mince the words from 220. But can you help us with the disconnect between American and the other TowerCos of how you could sort of raise your property revenue guide and others are cutting? Is it just MLA mechanics, and the MLA protection in your guide? Or maybe the activity is just less of an impact in your footprint?

Sure. So -- look, I can't comment on what my competitors have in their numbers. I don't know exactly what's in their guide. But what I would say with American Tower, we do have our comprehensive MLAs, and they do tend to protect us from some of the ebbs and flows of activity that are out there. And so I think partially what you're seeing is some of those MLAs at play that do insulate us a little bit there. In terms of the slowdown, it's happening a little quicker than we thought it would, but it's no different than what we anticipate at this kind of stage in a deployment. If you think about the way each generation of technology is deployed, you have an initial push of activity, and that's the coverage phase. And 5G has been a little steeper ramp-up than 4G was, because in 4G, the carrier staggered their starts in deploying the technology. And while you had one carrier that had a little bit of a head start in 5G, the last couple years, you had 3 carriers deploying very quickly. And that services business is inherently less predictable than the property business is. And so if you think back a couple of years ago, we raised our guidance about $100 million in the year 2021. And so this year, we've seen it taper off a little bit faster than we thought it would this year. That's the...

And you mentioned that it was maybe quicker than expected. And why do you think it was quicker? Is it probably because you kind of answered it because they ramped up steeper than expected as well?

I think that's a little bit of it. Again, the services business is just -- you just don't have as much lead time when you're projecting the business. And so your visibility is more in terms of weeks and months versus a year at a time.

We're trying to size the magnitude of it and the duration of the pause. There's one fear out there that there's an inability of the carriers to monetize 5G. Fixed wireless is kind of the theatric thought way of monetizing it and not a great way to use spectrum to add. So does that concern you at all? Because the other side is, well, they've got to put the spectrum to work at some point?

Let me address that in 2 places. First, I'm not sure we'd call it a pause. If you look at our revised guidance for services this year, it's still 2x what the average services revenue was...

Yes. Good point.

Prior to 5G. So we're certainly still seeing the carriers be active and deploying on sites. When it comes to the 5G and the monetization of it, I don't lose want to sleep over that. When I think about the deployment of 5G, first of all, they spent $82 billion in spectrum. They're going to deploy the spectrum. Second, just to be competitive, you have to be up to date on the latest technologies. The carriers need to deploy 5G. And if you look at some of the recent analyst expectations for mobile data growth, they're still projecting a CAGR over the next several years of 24%.

Okay.

And while it's a little bit lower than the 30% to 40% we saw, it's on a much larger base.

Yes.

So the carriers need to deploy 5G just to keep up with the existing demand on the existing kind of glide path we're on. And those projections don't incorporate any kind of killer app. They don't anticipate some big uptick in usage from some new technology that's out there. So I think 5G will be deployed. And again, I think if you look at the -- what we're calling a pullback, it's the normal cadence of the way those networks are deployed.

Right. In your opinion, when do you think we hit sort of a bottom of this -- I wouldn't want to say pause, but slowdown?

Right. Look, I don't know exactly what their plans are going to be. I'll leave it to the carriers to talk about their CapEx. But if you look at their CapEx projections over the next several years, they're still robust. So I still think you're going to continue to see the investment in the networks. And again, that cycle, the initial coverage phase, that second phase is really optimization. You're looking at the networks to figure out where do you have holes to fill in? Where do you need to augment some of your capacity in the network. And then not everyone has a 5G phone yet. We're just now starting to get devices in the hands of people who use it. So the uptake on that network will happen. So is it next year? Is it 2025? I don't know. But I think that you will see that normal cycle take its place, and you'll see the uptick.

Got it. And you answered some of this question, but maybe you can flesh it out, the difference between the 4G cycle and the difference between what you're seeing in the 5G cycle. You mentioned the 4G, 5G is a lot more in Unisys up ramping quicker, but...

Yes. And other than that, I think you're seeing a very similar approach to the deployment. Again, just kind of reiterate, if you go through this coverage phase where you're trying to get to a certain number of POPs overlaying your existing network. When you hit that kind of magic number of POPs, then you go back and look at your network and look at the quality of your network. So you have quality sites to infill where you might not have the best propagation, and then start looking at capacity demands on the network. And we're seeing that same dynamic play out in 5G that we saw in 4G.

Right. And to that same point, can you maybe frame the company's expectations for 2024 at least qualitatively? I know you're not giving guidance here, but maybe just frame up that dynamic?

Sure. So we'll give guidance in February. And I would just remind you that we do have comprehensive MLAs in place, and that we have reiterated our guidance for 2023. And we've reiterated our long-term expectation for 2023 through 2027 of at least 5%, okay, kind of build this growth on average.

Yes, on average.

And so what we would expect for 2024 is that we'd expect to see activity levels that are supportive of that long-term guide.

Right. And the last few months, you mentioned how 90% of this year's guidance was baked in with MLAs. And by the time you guys hit the second quarter, it was a 100%. How much of 2024 you think is locked in? How much visibility do you have there?

So I'm not ready to give you a percentage today. But what I would say is when you think about these comprehensive MLAs, over time, the visibility becomes a little bit less. What we've said publicly is that we have 75% visibility into that long-term guide.

Okay.

And so started 2023 at the 90%, you could expect it to be a little less each year then.

And when do you expect to pivot from coverage to densification materializing? I mean, it's happening in pockets here and there, but at Connect (X), I think we talked about -- like a halftime pause. But I think is the coverage still had a long way to go even back in May. And I'm just curious if your thoughts on Verizon, AT&T still have mid-band coverage for the next many quarters, right?

Yes, I think what we said publicly in Q1 is about half of our sites had C-band deployed on them. You could expect that to be a little bit higher because deployment activity is continuing. But it's -- again, when you think about this cycle, they get to a certain number of POPs. And then there's a long tail to cover the rest of the POPs, and it does happen over time. So there's still coverage work to be done, and we expect to see that continue to play out over the next several years. On densification, you already seeing some of it now. That comes in 2 flavors. The first flavor is fill in, where you may have some propagation differences between the mid-band spectrum and some of the prior deployments. And the second is, where you do have heavier usage, for example, where fixed wireless is being utilized on the network, you might see some densification starting to occur on that as network utilization gets higher.

Right. You mentioned that half of your footprint has mid-band POP -- I'm sorry, mid-band coverage, right? But you won't get to a full 100%. We just had Verizon on moments ago, and they said they're going fill it out with their AWS and PCS spectrum isn't [indiscernible]. So where do you think the half goes to like 80% of your towers or something like that, just generally?

So I'll leave it to the carriers to predict where they're going to end up on that. What I would say is, over time, you're going to want a true 5G experience everywhere. So I am expecting to see the mid-band spectrum deployed where it's economical to do it pretty much anywhere you can get fiber to the tower because you need the fiber to deploy the 5G. So I'm suspecting it will be the vast majority.

Vast majority. And you mentioned infill, it seems like it would provide more upside for infill because that means more cell splitting and cell splitting needs more colocation. Is that the right way to think about it versus amendment?

Yes, that's what I would think is when you start filling in holes in the network, it's typically a new site.

Yes. And I just wanted to talk about just carrier activity just in general. They're all rolling out their 5G in different forms and fashions. Maybe can you tell us like how much like AWS or PCS spectrum is on your towers for carriers in general? Like is it 80% you say vast majority?

I don't know exactly. It's most of them.

I tried. How about dual-band radios, are you seeing any activity? And is that another leg of growth? It doesn't sound like you're seeing much in terms of dual-band, but that could be another step up I'm thinking?

So dual-band radios, they've been around for a while in some of the older technologies. There are some newer radios coming out with some of the newer bands in it. And those would be part of the technology path that we've anticipated when we do our comprehensive MLAs. And so if you think about when you're doing a multiyear comprehensive agreement with the customer to set up that agreement, what you're doing is you're looking over that period of time, and any equipment that's going to be deployed in kind of that relevant time frame is already in the pipeline. You know it's there; it's being tested, you've got an idea of what's there. So you could expect that those types of technologies were contemplated in these comprehensive agreements. So from American Tower's perspective, it won't make a big difference, positive or negative, if those technologies are deployed.

Right. Okay. So it's a lot of it is baked in the MLAs thing?

Yes.

Okay. And you mentioned the 5% organic billings growth through 2027. Is there like a mix of how much of that is densification built into that figure? I mean, you get that acute.

So when we looked at that longer-term guide, we looked at what was already baked into our agreements and what we expected the carrier activity would be over that period of time. So there's an element of densifications baked into that. Having said that, if the activity is more robust than we anticipated, there could be some upside there. If usage is higher, if uptake is higher, if they need to do more than we anticipated, then there could be some upside from that.

Right. And carrier CapEx is coming down for a lot of the next year for different reasons. We had Verizon up here moments ago, talking about how their C-band CapEx is going to be buried now within their business-as-usual CapEx. So it's interesting, but the spending still seems healthy. It's going to be 5% long-term organic growth, maybe up, down sideways at some point. But does that mean the correlation from carrier CapEx and tower spend is kind of broken?

I wouldn't say that. So if you think about when you're deploying a new generation technology in the first couple of years, a lot of that CapEx is going into things like the core fiber, other elements of the network. And those are the things you deploy right up front. And so if you think about that ongoing CapEx, we're expecting the CapEx for the next several years to be about $5 billion more than it was in 4G. So we still expect it -- elevated levels of CapEx from what it was previously, but it won't probably touch the high watermark of $42 billion we saw last year.

Right. That's super helpful. You're pretty much saying that there could be CapEx coming down, but it could come from other areas because you spend -- they spent on core, and they spent on fiber and maybe that sort of goes away or the tower spending could be...

I'd leave it to them to give you the details, but yes, that's generally how we look at it.

Okay. And then your carrier customers have this toxic-led cable situation. I know AT&T is rather dismissive, and Verizon was cautious that they can navigate through it. But optimistic, they can navigate through it rather. Has the topic come up in your conversations with the company? And has there been any messaging there?

I haven't lost a second of sleep about it, and I'll defer to them to talk about that...

Okay. Yes. I haven't lost much either, to be honest. I know you don't speak about customer specifically, but I just did want to mention -- but DISH or an O-RAN cloud native provider that would be building a network. They are obviously going to be a contributor going forward. I think you mentioned like maybe 100 bps of your 5% organic growth. And just wondering, could -- how do you see DISH activity just playing out without being too specific? And literally 2 hours ago, they mentioned that they could get to their shot clock goal at another $2 billion of spend, which was lower than we all expected. Sounds like good, protected MLAs, so I'm just curious how you sort of see that playing out?

So again, I'll defer to them on what they're going to plan to do on that. But with our comprehensive MLA, we thought we're in a good position to capitalize on whatever they do with that, and we're somewhat insulated from the ebbs and flows on activity. Look, we saw them stand up a good team and build a good network. We were a good partner to them in that. And so I think they certainly have the capability to do whatever they need to do to meet their requirements.

If a carrier had to meet a shot clock in 22 months just in general, any -- I'm not trying to -- what's the lead time that they would need to spend? Is it like by month 17? Is it 6 months? I'm just trying to understand when a typical carrier had to ramp up their spend to meet a milestone?

Look, what I would say is there's a lot that depends on the way they engineer the networks and deploy the network. The first phase is leasing, but you can lease and hold. And then your construction timelines depend on your location, your equipment availability, zoning and permitting and those types of things. So what I would say is, you may have already seen some spending towards that milestone. It just isn't fully constructed yet. So it's hard to predict.

Okay. Fair enough. DISH's shot clock is PEA-based this one as opposed to last one, which just POPs covered. I'm just wondering if that benefits American more since you've got like a little more rural footprint because now, they've got to hit 75% of Arkansas, et cetera, right? So I'm curious...

I'm from Arkansas.

Okay. So -- you have good coverage over there. Thanks for the PEA shot clock. And I'm curious if I'm overthinking it or not, I can actually overindex to you guys?

I don't know if it's overthinking it. What I would say is it's a combination of our portfolio and our comprehensive agreement that position us well to get at least our fair share, if not more, of their business.

And they mentioned there's a lot of chatter out there like an MVNO with Amazon. And there's other MVNOs out there, Cable and Verizon. Just -- but MVNOs typically don't help the towers too much because it's just -- right? The prime carrier is still filling up the traffic. I'm just curious.

Yes. Indirectly, they do because they provide network traffic on the sites as well. So they can add to those capacity adds that the carriers need to deploy, and also anything that puts money into the pockets of our customers is beneficial for us.

Yes. So -- okay. All boats float sort of thing.

Exactly.

I wanted to shift gears quickly to AI because it's one of the common themes of the conference today, probably a lot more so in the data center world. And I'm trying to wrap my head around how AI can really benefit on the tower side, maybe in small pockets, but nothing transformational is the way I'm thinking of, but I'd just like to hear your view on any AI opportunities on towers or tower demand?

Sure. I'm also going to take the opportunity to talk a little bit CoreSite with that as well.

Sure. Absolutely.

So when it comes to AI, let me start with CoreSite because that will transition over to the tower side. We're an interconnection hub. We're not a hyperscale facility. We're not doing wholesale. So if you think about the learning models that are behind generative AI, most of that's going to be hyperscale, the large learning model farms. And that's not an area that we would necessarily play in. But those large learning model farms need to source their data from a lot of different sources. So it does create opportunities in a highly interconnected facility like CoreSite because that's where they're going to gather their data through those farms. So we do see some opportunities there. And then the other piece of that is the inferencing models. And it's more of the interaction with the end user that creates a need for some lower latency, and that's an opportunity both for CoreSite and we think it could be a possibility eventually for tower sites on the edge because as you need to get closer and closer to your end user and those latency requirements go down and the data requirements go up, it may be that AI is one of the use cases that will promote edge computing.

Meaning, the edge as far as equipment at the base of a tower event.

Potentially at the base of the tower or certainly near. I think you may see some aggregation centers that are probably ideally located near towers.

Right. Yes, I mean we can talk about that. There's a concern -- not a concern, it's just you're not taking advantage of this huge opportunity. As you mentioned, LLM farms are going out and building a ton of data centers. And I'm curious to hear your thoughts of -- are you going to need to spend more than $300 million to $360 million in CapEx in the CoreSite world and really seize that opportunity?

Look, we've said very publicly that we continue to operate CoreSite along the same lines that they operate as a public company, and we're focused on yield. And we're focused on driving the kind of industry setting yields that CoreSite is able to achieve. So right now, we have a little bit elevated CapEx from what CoreSite was typically spending against success based. If you look at our last earnings call, we disclosed some of the record bookings that we have. So a lot of the CapEx that we're spending is not at risk. We actually have presold into some of that development. And we'll continue to deploy success-based capital there. In terms of kind of those large hyperscale facilities, that's just not the business that we're in.

Right, right, your much more in the interconnect. And it shows through your renewal prices and your yields, et cetera.

Exactly.

Just going back on to the maybe huts underneath the tower and that opportunity because you were trialing 1- and 2-megawatt huts for the past couple of years now. I'm curious if anything materializing. Any compelling use cases? And when does this actually become a needle mover?

Yes. So it's still very early days for the edge. And we've owned CoreSite for a little bit less than 2 years now. And it certainly gives us a different view of that ecosystem. It's given us the opportunity to interact with the large enterprises and cloud players that are going to drive that space. But it's still very early days. So I don't know exactly when it's going to or whether it's going to. When there's more to tell in terms of the economics, we'll tell you guys. What I can tell you right now is we do have some good partners. We're trialing some interesting things that it's still an evolving part of the business. And we'll stay disciplined in deploying capital. We're not going to do a lot of things on spec. We're going to continue to do our proofs of concept and make sure that we know we're getting into it before we...

Right. Is there anything in AI that could help benefit American Tower internally?

So we already take advantage of some machine learning, so not necessarily generative AI, but some of the earlier versions of that. We've looked at generative AI. We've got a -- handful of folks that are looking at that, saying, is it something that we can do? And there may be some opportunities maybe around contract drafting, some data abstraction, things like that, but it's small. It's not going to move the needle.

Right, right. Contract drafting. I'm looking at report draft myself, no. But switching gears to your...

Your performance reviews are actually really good on it. And I haven't tried it myself, but [indiscernible] performance reviews.

Just moving on to your services business. Obviously, that was impacted with the carrier slowdown. Crown is not discontinuing their installation services altogether. And then you guys, in turn, cut your guidance from 200 to 175. Just help us understand your services business? Is it more permitting and zoning and less construction in the installed side, say, for Crown?

So we've traditionally focused on higher-margin businesses, which are acquisitions, zoning and permitting and engineering. We do have a small construction management business, and it's really carrier driven. It's what our customers would like for us to help out with their builds. And we manage that part of the business largely through vendors and contractors so we can scale it up and down as there are variations in that business. So you'll see us continue to be focused on kind of all the services we offer in the construction services piece of it. It's a very small piece of it. And if it grows a little bit or shrinks a little bit, that's really carrier driven. It's not because we're not preferring or not preferring that business. So our main focus is the higher-margin business.

Is it a leading indicator as I think about 2024? Could it impact -- if the services are going down now, are we going to see year-over-year growth or bookings slow down? Is that what we're thinking it?

Well, again, with us, we have a lot of insulation from those ups and downs in our property business because of this comprehensive MLAs. But I also say you can't -- there's not a direct read across necessarily because the leasing process can come pretty far in advance of construction in some cases. So it may be that there's leased up capacity that's going to get built next year that's not being indicated by the services revenues as well.

Right. And anything that you talk about in terms of equipment or labor? You guys didn't seem to have much of a problem during those heydays anyway, but anything coming up? Is there a worry of like BEAD money comes along and chases the same labor pool?

The labor pool has been tight in wireless for a while. It's loosened up a little bit, but it's never really been a huge concern of ours. If you look over the past 2 years, we had kind of record levels of activities in the industry. We're always able to source what we needed to when we needed to at the right price. So...

Yes. So I'm wondering, is there actually an opportunity in labor because if there's a carrier slowdown, maybe you can hire labor, at maybe cheaper costs?

We're not seeing that today, but eventually maybe.

Okay. Interesting. I wanted to switch the gears on fixed wireless and cable. Is there any opportunity there? Verizon just spoke again right up here about an hour ago when we talked about CBRS deployment, charters deploying with Nokia. And I'm just wondering, Verizon and T-Mobile could maybe augment their capacity for fixed wireless, doubtful, but just wondering if there's a way where fixed wireless and cable at some point time could add up to another carrier in total together, it's just too small?

I think it remains to be seen. We've certainly seen the carriers linked into fixed wireless. They're deploying it. They're monetizing it. And I think it's an exciting growth area. And I think it remains to be seen whether that's going to continue on our path, it's going to lead to a whole new set of sites for them. Right now, they're typically handling that within their existing RAN centers, but if they continue to expand, maybe there's an opportunity there.

Yes. Do they put CBRS on macro towers? Or is it more of a small sub play? Have you seen CBRS in deploying your tower?

Yes, we've seen CBRS. Again, it's not a huge driver today, but it is a driver of some business. We see it a lot of our fixed wireless customers in the WISP category deploy CBRS, and we've seen some from the major carriers as well.

Right. And do you see millimeter wave maybe on your rooftops because you have -- you're over-indexed to more rooftop. Just curious if you see anything there from Verizon or even T-Mo?

Not very much.

Okay. But how about CBRS on your subs?

It hasn't been a big driver. I would say it's similar to the macro sites. You see CBRS installations where there may be some -- they have a little bit less spectrum, spectrum hasn't the clarity yet, or is there some kind of trial markets where they're looking at it.

Right. And how do you think about O-RAN these days. DISH is deploying O-RAN in a meaningful way. And do you anticipate a meaningful O-RAN deployment? Does it really matter what equipments on there as long as it's equipment for you guys?

It really doesn't matter. And to the extent that deploying O-RAN may lead to more equipment on the tower versus at the base of the tower and the shelter, that's actually a net positive for towers if that's what it leads to.

Yes. I'm wondering if it could be a benefit from your network services because it adds more complexity. So it has more complexity, it's maybe more handholding on your behalf.

Potentially, we haven't really thought about it that way, but not -- it's a potential.

Does these cloud native solutions impact the tower business? I mean in one respect, there's more equipment in the cloud and less at your base stations, et cetera, and it could be a hurtful attack. I'm just curious of your thoughts there?

We haven't seen that. It's very similar to when C-RAN was deployed. You took a lot of the baseband units off of the tower sites, but it didn't negatively impact our rent streams there. In fact, in some cases, it requires more equipment on the tower to take advantage of the remote baseband units.

So there can be more equipment on the tower? I say that because there were most pay [indiscernible] because I always thought that your kind of just go to the cloud and let the cloud take care a lot of your complexity?

You do, but it may require more equipment on the towers as well. So you may need some amplifiers. You may need other equipment on the towers. It was traditionally carried in the baseband units at the base of the tower.

Okay.

As you [indiscernible]...

Power of the steel itself.

On the steel itself.

Interesting. And then you guys have an indoor DAS business to an extent. And you veered away from small cells for the most part. But you do have the stats and is that what CBRS available in there? Could this be an opportunity for -- as indoor DAS sort of develops? Maybe just talk about that conversation because you and I have [indiscernible] that as well. And this is another way to kind of play in the edge in a way.

Sure. So we're one of the largest operators of indoor DAS systems. And we do have some trials underway with things like WiFi 6, CBRS and other technologies. But we haven't seen it as widely adopted yet. At this point, the business is still mostly traditional DAS as we're seeing some of the 5G upgrades come through. And a lot of the venues that we operate are premium venues, and they're going to continue to be DAS going forward. We do think there's some opportunity with CBRS lowering the overall cost of deployment, and we're experimenting with that. At this point, we haven't seen those adopted at scale yet. So it's still early days to say, is that going to change the game or not for us? We don't know.

Is it a way to play this private 5G or P5G or private networks opportunity?

You can. And again, like I said, we're trialing some of those types of applications in a few of our venues. But at this point, it's not a material driver of the business.

Okay. So it's still early. When do you think maybe in your plans that sort of uptick could materialize in P5G and private network?

Look, I would say it's still a little bit up in the air. A lot of the private networking we're seeing today is done by the major carriers. And so it's typically using either their existing infrastructure or things that are on-premises. And so we might see a little bit of activity from that in that in building space. But today, they're still pretty much focused on traditional DAS and WiFi. And so I'm not sure it will ever be a big driver. And if it is, I don't know when.

Right, right. And you do any of that when you do WiFi services over your DAS network? Or do you just provide just the infrastructure and somebody else provides the services?

We provide the infrastructure. We do have some WiFi is in conjunction with our DAS. It's typically venue driven. It's typically operated by the venue themselves.

And what like -- how big is your indoor DAS business in American Tower's?

So we have about 450 systems.

450 systems. Okay. What does that come to like as a percentage of revenue in your U.S.?

Oh, gosh. It's small.

It's small. And these...

Maybe 3%, 4%, in that range.

Got it. And that includes like casinos and stadiums, and do you do that sort of work as well?

Casinos, stadiums. We have like the MBTA in Boston.

Yes.

Some shopping malls, things like that.

Are the economics similar like 3% escalators and that sort of thing?

They're a little bit different. The DAS business comes with some capital contributions upfront. So if you look at our earnings, we disclosed the amortized revenue components, and then the recurring rent typically has an escalator as well.

Okay. While we're on topic of escalators, that's always been a topic in the last 2 years is when you've got inflation in the high single digits, hope it's coming down now later this year, just lapping it. The carriers, there's no pushback at their 3% escalator. Well, there was a pushback when there was a 1% inflation environment. Now I'd say, they're loving it. Any opportunity for you guys to just sort of honor a deal as a deal, if you will?

Did you ask Verizon that before if they pay us more?

I did. Yes.

Look, I think that escalator has been something that's benefited a lot over the past, call it, 15-year period. And we've been very disciplined in retaining that 3% and not diminishing it. I think it's unlikely that our customers would be willing to go to a higher escalator at this point.

In your philosophy on MLAs, can you remind us like when they sort of expire over time, and your thought process on -- now it makes sense to do an MLA during a 5G up cycle, but re-signing them sometimes you get better prices on a la carte deals?

So the way we look at our MLAs just philosophically is we never discount to get those MLAs done. And whether it's an upcycle or sometimes mid-cycle, and 4G, you saw us do some comprehensive MLAs mid-cycle. What we do is we project what we think the business is going to be without it. And we think we're pretty good at this. We've been looking at these generations of technology from 3G to 4G to 5G. And we engage with OEMs and other people in the industry to get a really good view of what business as usual will be. And then when we talk with our customers, the goal is to streamline the process and to take some of the variability out for both parties. And that's why it takes a long time to get these done. It's not unusual for these negotiations to take a year as you're rightsizing the expectations on both parties. And so we typically will enter into these agreements that will have comprehensive portion. It's typically around 5 years. It's tough to look out too much beyond that sometimes because you've got to project what that activity level is going to be, what the technology path is, et cetera. We do have -- we have done some there longer. And we don't really break out separately exactly when those are expiring. So...

Got it. Well, great. Thanks for your time. I appreciate it.

Thanks.