Crown Castle Inc. (CCI) Earnings Call Transcript & Summary

Well thanks, and good afternoon. And welcome back to Citi's Global TMT West Conference. So for those of you I haven't had a chance to meet, I'm Mike Rollins, and I cover the communications services and infrastructure sectors for Citi Research. We do have disclosures available on the conference and registration site. And I'd like to welcome back to the conference, Dan Schlanger, CFO of Crown Castle. Dan, Happy New Year, and thanks so much for joining us today.

Yes, Michael, thanks. Happy new year to you. And I really appreciate the opportunity to talk to you today .

Great. Well, as we've now entered officially into 2021, maybe you could start with the strategic and operating priorities for Crown Castle for the coming year.

Sure. It's a great place to start. That's something we think about all the time. And one of the great things about our business is we don't change very much from year to year. Our business has always been based on delivering an infrastructure asset that can be shared among multiple customers to lower their cost of operation and implementation. And therefore, once we have that asset built, we want to put as many people on that asset as possible. So our strategic view is to continue to add more colocations to existing assets that we already have, particularly on our tower business; on our existing fiber business through more small cell colocations; but also in order to drive more future growth, to add assets that will allow us to colocate in the future, which is where we're spending a lot of time and effort with the vast majority of our capital going into fiber to support our small cell business going forward. And overall, our goal here is, like I said, provide a significant amount of value to our customers to where we lower their overall costs by sharing assets among multiple end users. And as we see the market playing out and what we're seeing going forward, we're excited about what 2021 is bringing us because we're on the very early end and the very precipice of what we think is a long-term investment cycle to invest both in 4G and 5G technologies from our customer base, and we're excited to be a part of that. And we believe that as long as we continue to provide that value, by giving lower cost of operation and adding to the colocation of assets on -- or the colocation of customers on our existing assets, that we'll be able to both help our customers and drive value for our shareholders.

And as you consider the use of your capital, curious just to think about the range of options that Crown considers on a regular basis. You talked about the shared infrastructure with towers and fiber and small cells. But do you actually -- when you think about what are the opportunities out there, do you think even more broadly? And could you see scenarios over time where you may add more asset classes or product classes to the portfolio, be it data centers or other infrastructure assets?

The short answer is we looked at a lot of infrastructure assets. What we're really focused on is wireless infrastructure and providing a wireless solution ultimately to our customers and for them to provide to their customers. That may lead us to other places, like as you mentioned, data centers. We don't believe that we will get into the large hyperscale type of data centers that are central to the functioning of our networks. But we do think that having access to 40,000 distributed sites of real estate throughout the top markets in the U.S. that are already connected to fiber and power and secured, may be a very good place to put edge data centers, which we believe will be a part of the future of 5G network architecture. So things that are very close to what we already do, we are looking into. But we have to have a strong belief that we are able to add value as an organization in order to make those investments, and we're able to add -- able to deliver value to our customers and ultimately to the end consumer. And the reason we want to draw it -- as I made the distinction a second ago, the reason we want to draw the distinction between a hyperscale data center and an edge data center is we believe that the operators of hyperscale data centers are great operators, understand the business, and will be able to do so better than we will. And there's no way for us to add more value than what they're able to add. Whilst on an edge data center, because of the characteristics I spoke of before with our real estate, our relationship to the wireless network operators, our understanding of RF engineering, our understanding of what the technology will ultimately be unable to do, we believe that we may bring some distinct value to something like edge data centers. Beyond that, we do look at other, as I mentioned, tangential ways of participating in network architecture. And we will continue to do so. But I would say it is most likely that the majority of our capital over the next several years will be dedicated to wireless infrastructure in terms of towers and fiber and small cells.

And just to follow on that just for a moment. So whether it's a partnership, alliance, or you may own some of the data center assets that you were describing, is it clear to you, though, to do the edge the way it needs to be done? Data centers and towers at some level need to work together to optimize the solution for the customer?

I think the answer to that is yes. Saying that it is clear is a bit hard to do right now for me. I'm not enough into the technology to be able to say that it is absolute that it has to happen. But what I will say is that as 5G is developed, we know that the driving characteristics are high speed, low latency, ubiquity of service with the ability to connect a tremendous number of devices to any one location over time. And in order to get that, I think it stands to reason that more computing power, both in terms of storage and computation, will need to be closer to the edge of the network so that you're not spending time sending data long distances that can be dealt with closer to where people are using that data. And I think that's where edge data centers will come in and be important. And because all of that is part of 5G, I think it will be part of an overall network architecture that will include towers, fiber, small cells and ultimately edge data centers. And they all have to interact. And one of the reasons we feel so good about our position in that is that we have access to all of those different infrastructure assets. We believe we are uniquely positioned to have all of those assets and to have the relationships with our customers that will allow us to understand what their needs are and be able to respond to them as quickly as possible. So we believe that we've positioned ourselves very well, and that, yes, all of these things will have to work together because in order to provide the service that we are all trying to provide to the end user, we're going to need every tool that we can come up with as an industry between tower, small cells, fiber and edge data centers.

That's really helpful. And I want to get our audience involved in the conversation. And so one question that we want to ask the audience is, what is the risk to future consensus AFFO per share growth for Crown Castle? And the choices that we're going to give our audience is: Not concerned; customer consolidation or rationalization; low to no inflation; slower domestic growth, that's for towers; weaker services revenue; or the underperformance of the small cell strategy. So we'll get to that question in a few moments once we get our responses back. And just for our audience's comfort, your responses are anonymous. We're not tracking individual responses. And just maybe taking a step over to the tower business specifically. One of the questions that we're often asked by the buy side is just -- is there a simple way to frame the 5- to 10-year view of how these assets can grow over time? When you take into all the different moving pieces, which I suspect will get into some of these new spectrum and technology; you got some consolidation thrown in there; and of course, demand for usage from the customers. So is there a simple way that you look at this internally that you could help educate our clients on?

Sure. It's a great question. And one of the things that we are fortunate enough to operate in this business, is because that the -- we do think that you're able to look out 5 to 10 years and have a pretty good understanding of what could drive value in a tower business. The core function of a tower is to allow for an antenna to be put at height to drive out a radio signal to carry data. And in order to meet the increasing demand for data in the U.S. that's going over wireless networks, which we think, and industry analysts expect, there's around 30% to 40% data demand growth per year, you need more antennas on more towers, and that's what drives the growth in the tower business. And we've been in -- pretty consistent in how we talk about what that medium to long-term growth is, where we talk about a goal at growing our AFFO per share and our dividends per share somewhere in the neighborhood of 7% to 8% per year. And we believe that, that gives a very good framework to how to think about our business because our business is driven predominantly by our tower business, which is 70% of our business. So you can think about we've already -- we've given that type of long-term -- medium to long-term growth rate target for a long time now since 2017. And we believe, because we are focused on the U.S., which is the best market for wireless infrastructure ownership in the world, and also happens to be the lowest risk for us, that we're able to meet that target year in and year out, if not beat it, like we believe we are going to in 2021. And the reason we get comfortable with that is that underlying demand I was just speaking of, drives our customers to want to spend more money to put more antennas on towers. And the way we think about it is we add about 1 tenant per tower every 10 years. And we're in the neighborhood at this point of 2 tenants per tower across our portfolio of 40,000 assets. And if you add that, it means we're growing at about 4% a year. Just adding 1 tenant per tower, over 10 years, over 2 tenants. So 0.1 over 2 is about 4%. So we look past that and we say, beyond that, what drives growth is a combination of escalators, less the amount of churn that we're going to expect. We see about 3% per year in escalators and about 1% to 2% per year in churn. And so when you add all of those together, we believe that somewhere in the neighborhood of 5% to 6% revenue growth on the tower business is a good estimate for a medium term. And that's generally where we've been operating over time. In 2020, we think our tower revenue growth will be towards the lower end of that, around 5%. And as we move into 2021, we think that we will be towards the higher end of that at 6%. And of course, there are going to be times throughout the next 5 to 10 years we will grow faster than that for whatever reason. There might be times to grow slightly slower for some reasons, although we think those are much less prevalent if you look at the history of the tower business. But that 5% to 6% range is a pretty good estimate based on, like I said, adding tenancy, getting our escalators or moving out any churn that we see. And we add all that together, it really is one of the great business models because of that predictability, because of that stability and because the underlying demand is coming from demand growth that continues to grow in the U.S. We feel like we're extremely well positioned in our tower business for the next 5 or 10 years, and beyond, even. And as we think about it, we know that our carrier customers, the wireless carriers in the U.S., spend an amount of money per year on their wireless networks, it's estimated in the neighborhood of $30 billion a year. And that can go up 10% or 20% one year, go down 10% or 20% one year. But that amount of change probably does impact our growth rate by about 1% up or down, which is why we continually say that it is rare to see an inflection point in our tower business. What we normally see is much more smooth change in the pace of growth, like we're seeing from 5% to 6% '20 into '21. And we believe that, like I said, that level is sustainable for the medium to long term.

And you mentioned something about the target to get a new tenant over 10 years. And one of the questions that we get from the buy side is, is that a physical tenant on average on each of these locations? Or is that an equivalent tenant, where it's the combination of both the physical adding equipment on to a new site but also carriers adding equipment to existing sites?

No, it's a good question. When we speak about adding a tenant equivalent over 10 years, it is the second of what you said, which is both the physical tenancy as well as the incremental revenue we can generate from adding additional equipment to already existing sites. So it is the combination of those 2 things. And that is, in essence, what the driver of growth is in the tower business. It's a relatively simple business. We either get new tenants to go on existing towers or we get the tenants that are already on those towers to add more equipment and pay us more commensurate.

Now the move you mentioned from 2020 to 2021 of guiding at that lower end of the range of 5% to now guiding for 2021 at the higher end of the range, organic growth of about 6%, what are the key elements that's causing the improvement in growth?

Yes. The 2 key elements, which are generally the case in any year-to-year period or any period-to-period move in our business, is new leasing activity in turn. The escalators of our business generally remain pretty similar in about 3% range, as I mentioned earlier. But the new leasing activity and churn is what drives the incremental growth in our business. And moving from 2020 into 2021, we see new leasing activity ticking up a bit and churn ticking down a bit, which is going to add to that -- to get us from that 5% to 6%. And the new leasing activity ticking up is really exciting for us because we still believe we are on the very early portion of significant investment in the network from our carrier customers because we just haven't seen a tremendous amount of 5G spending yet, and we believe that, that 5G spending will come and we're at the very early edge of that. And if we can continue to increase our tower leasing activity, even without seeing a significant increase from 5G, we believe it sets us up well for a long-term growth target like we talked about. On the churn side, what we had seen was, in the early 2010s, there was consolidation in the wireless industry. And we saw the very last bit of that consolidation churn coming into our business at the end of 2019, meaning the financial statement impact, the income statement impact of it, really hit us in 2020. But because that happened -- that last bit of turn happened at the very end of '19, we no longer see that happening at the end of '20, and therefore, we don't see it -- the financial impact going into 2021. So our churn is now down closer to 1% of revenue in 2021, which is a more normal view for us where we've been around 2% for a while because of acquired network churn. We're still able to grow even with that, but it does add to the value that we see going forward and the growth rate we see going forward, to have that churn to be a little lower.

So another question that comes up is, you mentioned activity up a little bit in 2021 in terms of the leasing revenue contribution. But you and your competitors have flagged that 2020 was just a slower year because it took longer for T-Mobile to get the deal done. And so that's just -- there's a lag effect come through. So given the T-Mobile ramp, given the possibilities of C-Band and DISH, why couldn't leasing activity be substantially higher in 2021?

Yes. I would say that -- like I said before, we're actually pretty excited about 2021. Going from 5% growth to 6% growth is great. And we believe that after our competitors, our peers, give their guidance for 2021, it will look like industry-leading growth both in 2020 and in 2021. So we feel really good about where [ in terms ]. But the potential for it to be higher, yes, there could be more growth in our business. But it doesn't -- like I said before, it doesn't happen that quickly. There are inflection points in the tower business like that to where it's a huge step up. It takes time because a lot of the new leasing activity that we see in 2021 is based off of activity that happened in 2020. Either we put something on air at the end of 2020 and so the majority of the income statement impact happens over 2021, or we sign a lease in 2020 and it takes 6 to 9 to 12 months to put that lease on air and start generating revenue. That we see that the majority of our new leasing activity has happened in 2021, it's happened already because of activity in 2020. So even if we do see an uptick in 2021 activity, it will have a limited impact on the run rate of our business in 2021, but could have an impact going forward. And we see that, that's an absolute possibility, and we'll talk about 2022 when we get into giving guidance a year from now for 2022. But right now, we're focused on 2021 and how good of a year we think it will be and how excited we are about it. To the specific points you mentioned, I think on both DISH and C-Band, it is more like -- DISH has been very clear that they don't expect equipment to come in until the second half of 2021. And so it will be more likely that, that impact will be limited in 2021 and have more of an impact going forward. And I think it's pretty similar on C-Band. Just clearing that C-Band in order to get it available to deliver wireless data will take time, and therefore, it will likely be later in 2021 where we see that activity if that is what happens. It will depend on who loans it and when they start spending money. But I think it would be later in 2021 before we saw that, which would impact future years growth.

And so it's fair for investors to take from your comments that -- because this is the question we get. If the wheels of the C-Band just take longer to start going for whatever the reason, your guidance for 2021 is not dependent on that. You have -- there's a lot of flex in that for you to hit your target aspirations?

Yes. I would say that the way we think about any time we give outlook for the subsequent year, we have, like I said, 3 buckets of activity: Already signed and generating revenue in '20; the lop-over effect impact to '21, signed in '20, goes on air in '21; signed in '21, goes on air in '21 and impacts '21. That last bucket is the smallest bucket in any one year because in order to get something signed, on air and generating revenue in a time frame that is -- that provides substantial impact to that given year, that's pretty low. Because like I said, it takes, say, 9 months between signing and getting something to generate revenue. So even if we signed something in March or February, it has a limited impact on that current year. So we have a lot of our growth already understood and feel good about where we are, and we think the activity levels will follow and believe that our customers will spend money, whether it's on C-Band or something else, to improve their network. Because what they're really trying to do, what -- we're somewhat spectrum agnostic because what we believe our customers are trying to do, the carriers, is to compete with each other on network quality because that's what we as consumers care about. And as long as that network quality competition is happening, they will continue to spend money on their network to get better. And they all have sufficient spectrum. There's spectrum that's laying around that isn't generating any value today on each of their balance sheets. And it doesn't have to be new spectrum to get there. So we believe that our customers will spend going into 2021, and that it will drive the growth that we've been talking about. And that's -- again, that's why we're excited about 2021 as we're in the early stages of some of these growth things, and we're still generating the higher end of that tower growth rate that we've spoken of. And it just -- we believe that sets us up for a long-term, very good trajectory of growth.

Does that also set you up for 2022 to be potentially better than 2021 from the organic growth?

We're not in a position of giving 2022 guidance. And I think what I would say is, yes, if everything goes right, it's going to be good. And if everything goes wrong, it's going to be not as good. And we don't know what that's going to look like in 2022 yet.

Let's take a step back and see the results from the first survey question that we put out there. I'm just going to read this for people who can't see this. There are a few people that are dialed in that don't have access to the visual. So in terms of the risk to future AFFO per share growth for Crown, 63% cited underperformance on the small cell strategy; 38%, slower domestic growth; and 0 for the other categories. So as you look at this, how do you think about where the risks are greatest to executing against that long-term goal of growing the AFFO per share?

I believe that we are well positioned to grow our AFFO per share and our dividend per share in our 7% to 8% growth target. I think the risks that we see lie really on the spending patterns of our customers and the health of those customers to continue to spend on their networks. If our customers continue to compete on network quality and therefore have to spend on new spectrum being deployed or using their spectrum more over and over again with cell splitting, that either way, we're going to drive significant growth in our business. And because we have access to the small cell portion of the business, we are, again, agnostic as to whether that happens on towers or small cells. And so we actually feel like the biggest risk to all that would be some sort of slowdown in industry growth, which we don't necessarily see. Because of all the reasons that we talked about, 5G coming, new use cases for 5G being developed, competition on network quality, our customers being very focused on their wireless businesses as driving significant value for their shareholders, new entrants in the market, all of those things, we believe, are -- give us lots of confidence in our 7% to 8% growth target. And we believe that we've taken into account some of the differences of one being up or down, one of those assumptions being up or down within that. So we're -- we feel really good about our 7% to 8% growth target. I think the question that we get asked a lot that we're still, I guess, not sure of yet is, is 5G going to be incremental to that 7% to 8% growth? Or is it just going to be a way of continuing that 7% to 8% growth? And the reason that we can't really answer that question yet is there's a question of, when that 5G use case is developed and clear to consumers, end users, will they pay more for it? And therefore, will our customers be able to monetize their investment in 5G with incremental revenue? I believe the answer to that is yes. I think there's so many important and positive things that can come out of a 5G use case that we believe that our customers will get paid more for having invested in 5G and ultimately implementing 5G and deploying it. And therefore, they will continue to spend more than they would have otherwise because they get to generate more revenue and more money, more -- better returns from their shareholders. And if that happens, we think there's a chance that we could be above our 7% to 8% target. If that 5G use case comes, allows for more spending because the monetization is happening, we think we're extremely well positioned for that. And we think that we could generate higher than the 7% to 8% growth. Otherwise, if 5G is just a portion of the spend that is already occurring, we believe our 7% to 8% growth can continue for a longer time period because 5G will just add longevity to our growth rate. So like I said, we feel good about that range and think that there's some upside to it.

Let's introduce another survey question, which is, will the location of Crown's domestic tower portfolio influence the market share of site leasing activity, colo and amendments for the next 1 to 3 years? And we have 3 choices for our audience today. Yes, urban and suburban towers are more valuable contributors; yes, the rural sites will become more valuable for ongoing coverage and densification; or no, tower companies are likely to keep their average share positions for new leasing activity. Before we get to that question, can you help and frame when the churn from decommissioning shows up from the T-Mobile-Sprint deal? And is there a peak year that you expect for that, that investors should be mindful of?

Yes. I may answer that question a little differently. I'm not sure it is -- we are certain of churn and decommissioning in a certain period of time. What we did a few years ago was determine internally that the merger between Sprint and T-Mobile was enough of a potential that we wanted to go back and renegotiate with both Sprint and T-Mobile to push out the term of the agreements we had with them, which now put us in a position of having about 5 years left on the term for both the underlying Sprint and T-Mobile agreements we've had with the new T-Mobile. That, we did on purpose to lower the risk that we had of having a big year of churn that was right next to when the merger happened. Because we thought that they would be very focused on consolidation and trying to generate synergies as quickly as possible, we wanted to give ourselves some time. And those contracts are noncancelable contracts. So we believe that we have achieved the goal that we went in with, which is to push out the churn event and give us time to talk to T-Mobile about what their goals are. And our goal, one of which -- what our goals are, one of which is to mitigate as much churn as possible. That being said, and even though there's an average of 5 years left on our contracts with T-Mobile and Sprint, we do have 1 renewal opportunity coming in 2023. And that's the first big chunk. And that may turn into churn or it may not, it depends on what T-Mobile needs and wants. We do believe that they will have some synergies on towers. I think that is undoubted. And I think that they are -- have been very good operators and consolidators of networks in their past and I fully anticipate they will be going forward. But they also need to spend money to expand their network where they wouldn't have gone and merged with Sprint in order to get access to 2.5 spectrum. If they were just going to let it sit idle, there's no reason to do so. So what we're looking for is a conversation to balance their needs of incremental access to infrastructure, both towers and small cells, with their desire to lower their ongoing cost of operations by having a consolidated network that is more efficient than the one that was operated separately. But over time, we believe that because T-Mobile will be in a better spot to compete very effectively with Verizon and AT&T, given that both their size and their spectrum position, we believe that they will spend a lot of money incrementally on infrastructure to deploy more spectrum and generate a more effective network. So we feel good about that relationship. We have a good conversation with them all the time. We will continue to have that conversation. We both have things we want out of that relationship. Both we have the things that we need out of that relationship. And we think it will work out as we continue to have the dialogue.

It sounds like you're interested in a comprehensive deal, but there may not be a lot of pressure to get something done until closer to 2023. Is that a fair takeaway from that?

I think we're interested in any type of relationship that addresses both of our desires. And if that is a comprehensive deal, we're happy to do it. We've done it in the past, we'd do it again. If that is more what we would call business as usual or more a la carte type of relationship, we have no issue with that. What has driven us and our customers more to those comprehensive deals has generally been our customers want certainty of pricing, they want ease of use and they want speed to get on the tower. We want basically the same thing. We would love certainty of revenue, we understand we want ease of use, and we want speed to get on the tower. When those 2 thing -- when those 3 things match up for the two of us, we generally can come up with some way of making that work. If there's some reason that they don't, then we generally go with a more a la carte type of discussion where we work through it each tower by each tower. We're okay any way. We see value in both, and we will continue to have the conversations with all of our customers to try to come up with ways that we can satisfy their needs as well as we can while continuing to understand how important and valuable our tower assets are, our small cell assets are, and how we can continue to generate value for our shareholders based on that value that those assets have.

Let's bring in the results of our survey question on the importance of tower locations in terms of the market share of site leasing over the next few years. And I think we're waiting for a -- I don't think it came in correctly. We'll get the presentation in a moment from that. Because you raise an -- oh, here they are. So 75% urban and suburban more valuable; 25%, no, keep the average share position. And the discussion about engaging with T-Mobile, with the Sprint merger and the recent deal that you signed with DISH, raises a really interesting question: Do the actual locations matter? So can you share with us how your tower portfolio is skewed in terms of geography? And how you see the importance of that playing into the opportunity for Crown to maintain or improve site leasing share over the next few years?

Sure. We have about 70% of our towers in the top 100 markets in the U.S., and the vast majority of our small cells are in the top 30 markets in the U.S. We believe that, that is a good skew because the population density in the top markets is very high, and therefore, the majority of people live in the -- in the -- in cities, in metro areas. And it costs a fair amount to put a tower or a small cell anywhere, you're going to have to get as much revenue out of that as possible as a carrier. The way to do that is have as many people around it as you possibly can, and that's in cities. So we believe that, that skew actually does position us very well. Within that, we think that there -- one of the great things about the tower business is, on any single site, that site is going to be important to cover the area around it, and there's very little overlap in towers. So if you're -- if 1 of our carrier customers is looking -- that has an existing network is looking to provide coverage in a very specific area, let's call it a square block of the city, and there's a tower there, whoever owns that tower is likely to get the lease as opposed to a tower that's a mile away because it won't work. So the tower business on existing networks is really an infill type of business where a lot of it has -- of the new incremental revenue has to do with location. There are ways to skew some of it. Like I said, ease, the speed of getting on a tower, those things actually can skew some demand one way or the other. But the majority of it has to do with do you have a tower in the right place at the right time? And because we have 40,000 towers that are skewed to the top metro markets in the U.S., we believe we do, and we believe that will help us going forward. I think it is a little bit different with a new network build like what DISH is doing. We haven't seen that for decades in the U.S. And there's no longer a infill type of mentality going on when you're building from scratch, it is where are we going to build the network and how are we going to design it? And DISH has the option of sorting the towers based on whatever they want. They could say, "We only want [ 50-foot ] towers." They could say, "WE only want 250-foot towers." They could say, "We only want concealed towers." They can say any of those things because they can have a way of thinking about their business that may lead to any of those decisions being good decisions. What we believe we've done with our agreement with DISH is not only do we have more towers in the top markets where they will likely build it first because they have a population coverage requirement, we believe that because we have a minimum contracted payment that is significant with DISH, that we have given them economic incentive to use Crown Castle sites as one of their source. And we believe because of all of those things, we will get more than our fair share. We'll get a higher market share out of that DISH network build than we otherwise would have without the agreement. So with our -- with the 3 existing networks, T-Mobile-Sprint -- and I mean, T-Mobile, Verizon and AT&T, we believe that we are very well positioned because of location. With DISH, we believe we're very well positioned not only because of location, but also because of the agreements we have struck with them and being their anchor provider of infrastructure in the U.S. So yes, we do think that we're going to get more than our fair share.

If we switch gears to small cells for a few minutes. If I look at the small cell performance, the growth, it's been interesting because the number, I guess, of small cells build and in the backlogs been -- the total number has been flattish, I think, for a few quarters now. But small cells is clearly a growth opportunity for the carriers as they think about the future densification of the network. So can you unpack maybe some of the reasons, where -- it's been growing because you've been putting more on building from the backlog. But where are the overall opportunity might have just been flattish for the last few quarters. And when do you believe you may hit that inflection point where the opportunity set just expands significantly for Crown?

I think this goes back to one of the things we were talking about earlier, is how much and when are our customers going to spend on their network? Towers remain the most cost-effective way to deploy spectrum in the U.S. but because towers can't get close enough together because they start to have both interference problems and zoning and permitting problems, small cells are required for the next generation of wireless network. Whether that's 5G or just the continuation of 4G, we're going to need, as an industry, significantly more density in the network than what exists today. It has always been difficult for us to predict the timing of when that happens. We can tell you -- I can tell you, over the next 10 years, we're going to have significantly more density and a tremendous amount more small cells. Whether it's going to happen in January or March, that's really hard. Whether it's going to happen in '21 or '22, that's still somewhat hard. That has to do with the prioritization of the capital spend within our customers. What I would say though is, with 5G -- and like I said, we believe that the spending on 5G is beginning in earnest in '21. With 5G, we expect more going towards small cells than has been the case with 4G just given the low latency, high speed and ubiquity that's going to be required, will generate -- will drive more density. And we see that backed up with the type of spectrum that is being utilized for 5G. It is a combination of all bands of spectrum, both low band, mid-band and high band. And as you get closer and closer to that high band, the more and more small cells become the favored infrastructure asset to deploy on. So as we see our customers investing heavily in that spectrum, including in C-Band, we think that, that will drive a lot of small cell demand going forward. And we think that, that is all coming and will enure to our benefit. And that's something that we're really excited about. And if we can grow our business as we are, as our outlook says going into '21, where we're growing our small cell business in the mid-teens range; our tower business in the 6% range; and at the AFFO line, we're growing at 10%, that's without significant investment in 5G. We do think that it looks like a very positive outlook for us. And we believe that small cells will be a good driver of growth going forward as that densification becomes more and more of a requirement to meet the demands of the future network architecture and demand from end users, both consumers and enterprises and industrial use cases that 5G, we think, will generate. And we're looking forward to how that plays out and have been having really great conversations with all of our customers around towers and small cells and think that, that will ultimately result in good things for us and our shareholders.

So a quick follow-up to that. From your comments, do you think the uncertainties for the carriers of who's going to own C-Band, how much they may have, has that been a roadblock to making new small cell decisions? Do you think the carriers just have to get past the C-Band, and once they know what their spectrum real estate looks like going forward, they can then make faster decisions on the macro upgrades and the small cell deployments and the expansion and densification of their network?

I think that is one of the factors they use to determine how they spend money, yes, on their network. I can't speak to what their decision-making is. That is not within my understanding nor would they share that with us. I believe they have lots of priorities on how to spend capital, not just the spectrum, not just wireless networks or densification, but also dividends and share repurchases and debt and other businesses, that I think it will always be that there is some prioritization that happens. And sometimes, that will mean more business for us, and sometimes, that will mean less business for us. But as I said earlier, I think over the long term, it means significant business for us because we need more density and we need more spectrum being deployed in the U.S. to meet the demands in the market, and we are extremely well positioned for that.

As some parts of the country have gone through a second wave of the pandemic, have there been any impacts to your business or anything that investors should be mindful of?

Nothing that is material. I think the biggest impact to our business has been some delays in closing transactions just because it's harder to get the focus of the counterparty when you're both remote and when the pandemic is going on. So we've had a little bit of a longer cycle between understanding what a customer wants and getting a deal signed. But nothing that I would point to that would have a significant impact on our business or financial statement.

And just to understand that, is that in towers? Is that in fiber? Is it small cells? Or all of the above?

It's a bit of all of the above. I think the most acute impact is in the fiber solutions business.

And just as a last question in our final minute. Is there anything that you feel is unappreciated by the market that you want to outline or share with our audience today?

What I would say is we believe that we have built a business in our fiber and small cell business that has a tremendous amount of upside. And that as we look forward and you talk about the densification that you've been asking about and I've been speaking about it, that it is highly unlikely that we're going to end the next 10 years with the same number of small cells as we started it. And I think it's going to be a significant increase. And as we look forward to the type of returns that, that type of increase in small cells on our fiber could have for our shareholders, we don't believe that we are not getting any value for that. We believe that we basically have the unpriced upside option from 5G sitting in our stock that just isn't being appreciated. And we believe that as we continue to build fiber assets, it gives us more and more capacity to ultimately add more small cells on that we believe will generate significant value going forward. And like I said, we don't think that we're getting the credit for that because we're trading on current cash flows, not the promise of that future. And it looks very much like that promise of the future is going to be substantial.

Dan, thanks so much for sharing your time with us today.

Thanks, Michael. It's good seeing you. And really appreciate you having us at the conference.

Great to see you, too. Thank you, and thank our audience for participating.

Yes. Thank you very much.