SBA Communications Corporation (SBAC) Earnings Call Transcript & Summary

[Audio Gap] to the BofA Media Telecom Conference. We're going to wrap it up here on day-2 with SBA. And thank you again, Marc, for coming out to the conference and participating in the fireside chat in the one-on-ones today.

Well, thanks for having me. Happy to be here.

Absolutely.

So I wanted to start higher level topical, what's of interest to investors and just how people should be thinking about the current state of carrier deployments and where they are in the cycle?

Right. So I think at different stage, it's funny because they're all in the same space competing, but they're totally different stage of development. I think T-Mobile is pretty much already done on the 2.5 spectrum. Verizon -- at least from what we could see on SBA towers, Verizon is probably at the very -- at the 70% mark, very active right now, very good relationship. I think they're doing a lot of work with us. And AT&T is probably at the 50% mark playing catch-up.

Okay. That's very clear. And SBA has been very vocal about application volume increase. And you've shown that in the last several quarters. And so what is the disconnect in the elevated application levels translating into domestic leasing activity?

Right. So our level of application has been growing up sequentially for 6 quarters in a row, still growing. Now we're at a stage where over 50% of the revenues are from basically colos on the application. So it's a good sign that the carriers are doing densification, and we are pleased about this. I think the issues on application is that the book-to-bill cycle is 6 to 9 months, depending on the carrier. So it just takes time for those basically applications to transfer into dollars and cents. So -- but I think it was a little bit misleading, the $9 million in the first quarter, $8 million in the second quarter. One number was rounded up, the other one was rounded down. We have not changed the guidance for the year, $37 million for the second half. And it's still -- the second half is still going to be greater than the first half. So we are very happy with the level of activity that we're seeing right now, and it's really spread among the 3 carriers.

So it was more just a factor of just the difference in whole numbers versus take it out -- one place pass a decimal?

It's just like -- it's forced precision. It's more like noise in the system. And what you need to keep an eye on is $37 million midpoint for the year and the second half is still going to be greater than the first half, okay?

And I want to come back to your comment about the book-to-bill because I think last quarter, you also noted that one of your customers, the commencement timing was taking a little bit longer maybe than expected. So are you seeing a lengthening in the book-to-bill? And I guess, if not...

No, not really. I think we feel good for the bookings and the billings for the second half of the year. And I think the pace going into next year, I think we are happy with what we can see right now.

Is there any insight into why one carrier might be a little bit slower with commencement than you expected?

They all have very different organization. Those are very large organizations. Some are more like regionals, some are more like centralized, and they just operate at different speed. That's all. So I wouldn't read anything into it really.

Okay. Do you ever see slower commencements when carriers are undergoing major core network upgrades? So maybe that could -- I'm trying to, I guess, get to the root of what might be causing the slower commencements for one carrier.

I don't really know the answer to this, to be honest with you. I think it just takes time. You're dealing with a very, very large organization. Those are very large networks. I mean, 70,000 [indiscernible] for some carriers. It just takes time to do the work.

Okay. And maybe focused and looking beyond 2025, what do you see for the long tail of 5G deployments for the carriers? Obviously, densification is going to be part of that. But how do you envision that developing over the next several years?

Well, I really think that once you get the coverage, the next step is really [indiscernible] just because the traffic on the handset is still growing at probably around mid-teens. And fixed wireless access, we're going to see another 10 million subs added this year. Fixed wireless access customers probably use 15x to 20x more bandwidth than handset users. And that's just using a lot of capacity, a lot of tonnage on those networks. So I think the next wave, I feel pretty good about the next wave, which is going to be more colos to be able to handle the traffic.

And I mean, are there other tools? Is there a formula or the metrics that you look at to gauge when FWA is going to potentially overload that network and demand more densification? Because from my seat, what I'm hearing and what I'm seeing is that current capacity can kind of get to maybe 25 million, 30 million FWA subs covered. The carriers are suggesting that they have enough spectrum, enough existing [indiscernible] capacity to fuel growth for the foreseeable future. AT&T with the EchoStar deal announced last week and the mid-band spectrum is talking about leaning in heavier FWA utilizing that spectrum with less densification. So from the outside, in my perspective, it's hard for me to look at a date and say, okay, densification needs to begin in earnest at this point. And I'm just curious with the intelligence that you have if there's a way to calculate that?

For us, I think it's almost impossible to do this. I think the carriers don't share that type of information with us. We see the applications for colos going up, which is a sign that they are working on densification. But that being said, if you look at AT&T, for example, buying the 3.45 spectrum, deploying that spectrum is a software upgrade, that's correct. But on the SBA towers, they only have deployed 5G on 50% of the network. So they still need to finish the deployment of 5G in order to activate that spectrum. So I think we still see a lot of lease-up coming up down the path.

Of course. And in the past, SBA has been relatively agnostic about signing MLAs other than AT&T. Do you see that change in the future and a greater pursuit of MLAs with AMT and CCI? And if not, what is the advantage of not having an MLA with a carrier versus having one?

Well, I think it's really on a case-by-case basis. I think if you take the -- just step back a little bit, look at it from 30,000 feet, the carriers are growing the top line at mid-single digit. And in an industry structure with an oligopoly 3 carriers, they really want to control basically their cost basis. And from our standpoint, we want to secure growth. So I think to the extent you could craft a deal where they make volume commitment to us, we are willing to obviously be more flexible on pricing. If we don't see -- because locking in future growth rate is very important to us through minimum volume commitment and later. So to the extent that the stars are aligned, M&A makes sense. And if carriers want to do it on a tower-by-tower basis, we are willing to do that as well. So it's really on a case-by-case basis, whatever makes more sense for us and for them. So there's no real rule. It's really on a case-by-case basis.

Okay. And I presume every MLA is different because they're negotiated down to the end degree, but you said -- you mentioned one factor, which is the minimum volume commitment. What do those normally look like? And what do they include and not include in a standard MLA?

I don't want to go into that level of detail for competitive reason, obviously, but I think for us, securing long-term growth rate is important through basically volume commitment escalators. And I think we are a good partner. We could help the carriers deploy faster on our network. So I think MLA makes sense because it speeds their deployment. So I think it's a win-win situation if you could craft the right agreement.

Yes. It makes a lot of sense. I wanted to shift to Sservices for a moment. I know it's not a recurring business for you, but it's also been very strong in recent quarters. So any details on what type of activity you've been performing on the Services side would be helpful?

Well, the service business, remember, is very indexed to one carrier at SBA. Obviously, this year, we're doing extremely well. We just raised guidance for our Service business. But it's a nonrecurring business. There's very little visibility beyond 1 quarter or 2. So I wouldn't read too much into it. It's a good indicator, but it's -- there's just no long-term visibility in that business.

Okay. So -- and my next question was how much visibility do you have into the business? So you don't get a lot of heads up or...

1 to 2 quarters.

1 to 2 quarters beforehand that you can look forward and say, I can predict Services business, but the degree of accuracy beyond that is best guess?

That's right. It's very difficult for us to see beyond 2 quarters, to be honest with you.

Okay. That makes sense. I wanted to shift to international for a moment and just thinking about that sleeve of the business. And how do you think about the current health of the Latin American market? And I know there is some carrier consolidation related churn. But outside of that, how do you see the general health in the market?

Right. So I think we need to break it apart a little bit. For us, Latin America is we -- Central America first and then Brazil, where we have -- we're the #2 operator, 12,000 towers. In Central America, we recently bought over 7,000 towers for Millicom. We have a 15-year agreement with Millicom with a CPI escalator, U.S. dollar contract and basically a commitment from Millicom to build 2,500 sites. So this is going to be locking mid- to high single-digit growth rate for us in the region for the foreseeable future in U.S. dollars. Those are very healthy market, has been consolidated down to 2 carriers, Claro and Millicom. Both carriers are well capitalized. And 5G is probably either depending on the market, 5% to 15% deployed. So we see a good prospect in Central America. Brazil, personally, I'm very bullish on Brazil. I think Brazil is the largest economy in Latin America. GDP per capita is 4x to 5x GDP per capita in India. It's a growth market for the long term, large exporter of grain, of mineral, of oil. And I think last year was a tough year with inflation running up. I think the Central Bank has done a fantastic job getting inflation under control. And I feel good about the country going forward. In terms of the telecom industry, the market has gone from consolidation from 4 into 3. So Oi, which was one of our major customers is being consolidated into Claro, Vivo and TIM. And we are in the middle of this phase of consolidation. So we cut a deal with TIM last year. We're doing the same thing with Vivo this year, and we're going to see some churn from Claro going forward. So I think we're probably going to see elevated churn in Brazil for the next few years. But long term, this is a market with 5G is only about 33%, 35% deployed. And you're going to see a very healthy carrier market, oligopoly, 3 wireless company, well capitalized. So I think long term, Brazil should do well. It's just a tough time right now.

Got it.

But the currency has appreciated by 20% this year. We have adapted our operation. I think we took some cost out. We have cut our CapEx spend tremendously, and we are seeking to see a much higher return on invested capital in Brazil.

Do you see Central America and Brazil, the pace of 5G deployments, do you see that tracking similar to the pace that we saw in the U.S.? Or are there structural reasons, country-specific reasons, why that will be slower or faster?

I don't see any reason why it would be slower. I think those markets are going to get to the same point.

Okay. And you mentioned the churn that's going to persist for a number of years, and then you still have the Sprint churn in the U.S. Would just love your perspective from the CFO of the advantages and disadvantages to address front, right, through a contractual agreement versus letting it wind down over time naturally through expirations. So how do you think about the pros and the cons of the 2 different approaches?

Well, it depends on NPV, right? I mean, if you get a prepayment upfront, you start talking about discount. And it really depends on the discount. Some carriers, I think are happy to do that. I think we were able to strike a deal with TIM and Vivo. With Claro, we are just -- I think probably you're going to see the churn over time. And in the U.S. market with Sprint, we are just letting those contracts expire. So as a CFO, I think I will take a prepayment upfront so the numbers are cleaner going forward. But it's always on NPV. You need to get the right deal at the right price. So we are very disciplined, very disciplined.

Yes. That makes a lot of sense. And then through the Millicom acquisition, you get even more exposure to Latin America. Can you give us any thoughts on the line of sight of the timing of closing the remaining sites?

Yes. So we have another $400 million of basically acquisition cost to pay to Millicom. This is for Honduras and El Salvador, it's about 2/3 Honduras and 1/3 El Salvador. That should be closing any time now. So it's just a question of getting a signature on a page. We don't expect any issue. It's just a question of getting regulatory approval.

And what advantage does the Millicom acquisition bring to SBAC in the region? Or is it not strategic because it is more a good financial deal?

Well, it's a little bit of both. When Brendan Cavanagh, our CEO at his first earnings call in February of 2024, announced a portfolio review, I think we made it clear that we thought it was important to -- in each one of our 15 markets to have a strategic dialogue with our customers. And in order to do this, you need to be a leading tower company because then you get the call, they need you to deploy their network, where you are a small player, your margins are lower because your G&A costs are basically fixed and you're not necessarily in the flow in the dialogue. So we exited the Philippines where they are over 30 tower company. We exited Colombia where we had a very small position. We exited Argentina. We just announced the sale of our Canadian operation. We have been up there for 15 years with about 400 towers. We didn't see an opportunity to do a large sale leaseback with the 3 large operators in Canada. They're a fantastic operator. It's a great market for anyone for the wireless industry. We just didn't see how we could really get a large sale leaseback from them. I think more looking at, I think, financial engineering solution with some of the pension funds in Canada with the deal -- with those segments 49% of their operations. So we decided there was not a path to be a leading tower company in Canada. We monetized it at, I think, a multiple [indiscernible] we think is very attractive to us. After tax, it's about adjusted 26x AFFO. So we thought given our small position, it was better to exit that market and redeploy the capital. And finally answering your question, I get to Central America. We were in 4 markets with very small position and short-term lease as part of the deal with Millicom. Today, we are the #1 tower company in Central America. We're extending the lease on the existing sites that we had with Millicom to 15 years, and we have a new 15-year lease agreement renewable with Millicom going forward. And it's a 2-carrier market, Claro and Millicom, well capitalized, all U.S. dollars, we pay 11x for those markets, and we think it's -- we thought it was a fantastic deal. And we have a good, good -- very good relationship with Millicom.

And you've already touched on it a bit, but presuming international is better than being exclusively domestic, and you've already chosen that strategy. What makes international market attractive? What are the variables? I mean, you already mentioned stable 2-carrier market, well capitalized. But what other factors make international market attractive to you? And what markets that you aren't in today could potentially fit the criteria?

Well, I think having a long-term lease, strategic relationship with MNO is key to success over the long term. So that's why we -- I think we like the M&A we have. We want to support our operators. I think at the end of the day, we are all in the same industry. And there's -- you could cross the win-win agreement by teaming up with your customers. That's what we did with Millicom in Central America. I think we like our position in Tanzania. This is a growth market. The government is really pushing for coverage. Our team is doing extremely well. This is a growth market for us. We're building a lot of sites in Tanzania with a very attractive return. And we have been in South Africa for many years now. It's the market with the best ROIC of most of the market we operate in. And so I think we like our position where we are today.

And I'm just curious when you're evaluating these deals. I mean, from the equity side, we would kind of talk about a country risk premium, right, when thinking about investing in equities in a specific market. And I presume you use a similar approach when thinking about investing in different markets. So how do you apply that premium when thinking about making acquisitions in non-U.S. markets?

Well, we have different cost of capital for hurdle rates for every single market. It's basically our [indiscernible] plus country risk plus another risk premium. So I just tell you, for example, Brazil, the cash we have in the bank in Brazil is yielding in the checking account 15%. Currency is appreciated by 20% today. So when the team asks for a new site or a new CapEx plan or is clear, I could tell you that the hurdle rate is fairly high. I keep telling my team, as my word, why should I do this deal? I could just leave the cash in the bank account and collect 15%. So to answer your question, we have very much higher hurdle rates for some of these markets.

Yes. And that blends in well to the next question is on the -- how you think about the capital allocation options for SBAC and even rank ordering those and how they might be shipped in the next 12 or 24 months?

Right. So that's a good question. And the numbers I'm going to give you are or public have used them in the past. But I really think that going forward, the path to value creation for us is really through capital allocation. And so you look -- start with the top line, about $1.9 billion of EBITDA minus $475 million of dividend, about $35 million of cash taxes, another $435 million of cash interest expenses, $50 million of maintenance CapEx, $200 million of growth CapEx, you are left with $700 million of cash to allocate every year to either M&A, share buyback, dividend and debt payment. So in 2023, in a rising interest rate environment, we spent $100 million of share buyback and about $600 million paying down debt. In 2024, we did $200 million of share buyback, $200 million of M&A and the rest we paid down debt. This year is an unusual year. We have $975 million payment to Millicom. We're getting some proceeds from selling in Canada, about $280 million after cash, and we did about $175 million of EBITDA. So this year is more indexed towards M&A. Frankly, this was a very unique opportunity for us, this Millicom deal. Right now, M&A opportunities in the U.S. are very scale and very expensive. I don't see ourselves expanding into new emerging markets in the near future. So I think next year, we're probably going to index towards buyback and paying down debt.

Okay. And then addressing the debt now, see my colleague, [indiscernible], probably knows this much better than I do. I will ask the question anyway. And addressing debt maturities, can you just kind of walk through the prioritization of just paying down debt, re-fi the debt? And if you are re-fi the debt, how you rank order priority for how you might do that with different options that you would have?

Right. So I think 2026 is going to be an easy year for us. We have a $750 million ABS maturing in January, and we have $1.2 billion maturing in November. We have a $2 billion untapped revolving credit facility. So I think we'll probably use the revolver to pay down the ABS in January and then pay down the revolver in order to delever. That's probably where we're going unless it's an incredible market and we could tap the ABS market at a very attractive rate. I think if you really look at SBA at the balance sheet, it's $12 billion of debt. S&P recently upgraded us to investment grade, BBB- at the corporate level. And the question for us really is a time in the future where you go to an investment-grade market, you start tapping the investment-grade market. It probably makes sense over time in the long term because you're in an environment where you grow the top line at basically mid-single digit, you have long-term agreement with your largest customers and you have the ability to issue very long-dated security at attractive rate in the market that's always open. So you derisk refinancing risk, and you could probably lower your cost of capital going forward. So we haven't made a formal decision yet. One of the gating item in order to get to investment-grade level, I think we need to get to a 50-50% secured and unsecured. Today, $9 billion of our debt is secured, $7 billion of ABS, over $2 billion of term loan, and we have a $3 billion of high yield that's unsecured. So it takes time as that debt mature, you could take the opportunity to refinance that debt in the unsecured market and eventually work your way to investment grade. So no formal decision has been made. We lock our leverage at around 6.5x. It's -- the number is good enough to be investment grade. I think the gating item is really the mix of secured and unsecured.

Okay. But the last point that you made, the mix, I mean it sounds that it takes some time to work through that before you can start to really tap the unsecured market, which is, to your point, a more predictable market, potentially lowers your cost of capital. Because I think one question that investors have that can probably even skew to a bit of a concern is the refinancing risk and the potential wager pressure that might put on AFFO per share growth, right? We're obviously in a higher rate environment. So what would you say to investors maybe to reduce that concern or to answer that question?

Well, we think that the leverage is an output. The input is cash interest expenses, right? So if interest rates come down, I think you could probably operate with higher leverage and have lower cash interest expenses. In a rising rate environment, it makes sense to pay down debt and go to investment grade. So we want to maintain flexibility. We see where we are in late this year, early next year. And you'll hear from us probably at some point in the future -- in the near future.

Okay. It'd be great to get an update on that. I appreciate it. Last one on capital allocation, dividend growth. So how do you weigh growing the dividend versus buying back stock? How do you do the math around that?

I mean, our payout ratio is about 35% today. Dividend policy, remember, is a board decision. It's not a management decision. But I think we have the opportunity to keep growing the dividend at low double digit for the next few years until we get to basically a 50% to 60% payout ratio. So for the next 3 years -- 2, 3 years, I think we could grow the dividend at low double digit and still delever the company.

Okay. So I wanted to come back to the domestic business and the Sprint churn. I'm trying to understand this better. So -- and it's kind of connected to your densification comment. You and we are projecting relatively high Sprint churn for the foreseeable future. Is there an opportunity or an open door to negotiate directly with T-Mobile, looking at the need to densify over time? And maybe talk about less Sprint-related churn in the short term to help maybe address the densification needs longer term, but is maintaining some of the sites. Is there any kind of connection you can make between those 2 to reduce the churn?

I think it's difficult at this stage. Right now, it's $50 million of churn in 2026 and $20 million of churn thereafter. So I think those leases are just going to expire. We have a good relationship with T-Mobile's #1 customers who are very active with us. And I think it's status quo on those leases, which is going to take $50 million of churn next year and '27 and thereafter.

Okay. And then the AT&T EchoStar. EchoStar only 2% of your revenue, smallest of all the tower operators, you have the lowest number of percentage of revenue. But I also believe that your contract expires with them sooner than your peers. So can you walk through the expected or potential churn impact from EchoStar?

Sure. So it's about $55 million of revenue currently. It was about $2 million of lease-up in our guide and budget for 2025 that's called for. So there's no impact to lease-up for the second half or last part of 2025. Out of the $55 million, about $25 million is going to churn up in 2027 and another $25 million in 2028, and a little bit in '26 and a little bit in '29. So the impact is we're going to be $25 million in '27, $25 million churn in 2028.

So relatively small number...

It's very small number.

But high visibility into the short-term nature of it. And then kind of sticking with spectrum, upper C-band NPRM, right, projected potential auction date in early '26. So what are your thoughts on that and what it potentially means for SBA and the tower industry in general?

I think this is a very good question actually because I mean, I was on board Intelsat for 2 years following this negotiation with SES. Today, SES and Intelsat are one company. They own 90% of the upper C-block in the U.S. The FCC I'm hearing is probably going to issue [indiscernible] this month, so definitely in the next coming weeks. That's probably going to take 12 months to clear and then they could get auction rule probably early '27, get an auction done. It may take 18 months to clear that spectrum. So you could see 120 megahertz of upper C-band coming to market late '28, sometime in 2029. You have 3 operators, 120 megahertz of spectrum coming. That's 40 megahertz each. It's timing would be just right for 6G, right? I think the equipment makers would love to see a next wave of CapEx. We'd love to see the next wave of CapEx. And I think it's good for the operators. I've been in this industry for 30 years now. Each time you go from 2G, 3G, 4G, 5G, you basically lower the cost per bit you deliver over the airwave by about 10x.

Yes, you get better spectral efficiency.

Better spectral efficiency. So if you're a carrier, remember, I mean, you used to get $1 a minute for voice and then $0.25 a minute and $0.05 a minute and I'm going to give voice away, but I'm going to charge $0.25 for text and then you get the text away and then you get the data away. The #1 priority is maintain that ARPU at about $55, $60. And it's -- they have done a fantastic job. 25 years later, they still get $25. They still get $55, $60 of ARPU every month, and they give you all this capacity and they have maintained 40% plus EBITDA margin. It's quite a business, quite an achievement what they have done. And the reason they have been able to do it because each time you get more spectrum, you roll out a new generation technology, it's more spectrum efficient. You lower the cost per bit by about 10x. So look at this industry with fixed wireless access, everybody may have -- not everybody, but at least my kids, my daughters in her 20s are probably going to have meta glasses walking around, video going everywhere. It's just going to keep driving traffic, AI to the handsets. So -- and if you're a carrier, you want to take advantage of that opportunity. You need new spectrum, you need 6G. So put things in perspective, there's a lot of, I think, false precision in all of this forecast. What -- if you go back 25 years, you look at CapEx as a percentage of revenue for wireless operators, it's always between high teens and 25% of revenue. I remember when I was at a banker to Nextel in the '90s, every business plan had CapEx at 25% of revenue, dropping to 10% after 10 years, it never happened. I joined the company, all my models follow the same thing. It never dropped to below 20%. Look at the CapEx as a percentage of revenue in 2022, 2023, it was 25% for the big 3. It was over $40 billion of CapEx spent in the U.S. market. This year, it's a trough, you're about like less than 15%. It's going to creep up again because when they build at 5G, they got a 10x increase in capacity. That's why they were able to do fixed wireless access. And now they need to do densification colos to basically support this fixed wireless access customer video traffic. So I think the cycle will start again by 2029, 2030, you're probably going to see CapEx as a percentage of revenue for the big 3, probably way above 20%. So this business has been around for 35 years. Those towers are going to be there in 35 years. If you just drive around, in Connecticut, Long Island, Florida, all these places where it's really difficult to get new towers up. Just look how much equipment is sitting on those towers. They keep getting bigger and bigger and bigger. And we have that real estate. It's always going to be easier for them to come to us than building a new site because they have the fiber going to the site, they have the generator, they have the solar panel, they have the fuel tank and they have the equipment up there. If you have an MLA, it's just going to be so much faster to deploy next gen. So I feel good about our business long term. And yes, we had the Sprint headwind, and now we have a little bit 55 or 25 a year in '27 and '28 for DISH. But I mean, if you look at the long term, it's really a blip on the screen.

And last question from me, and I'll leave a minute or 2 for the audience in case there are any out there. What role, if any, do you think that LEO satellite constellations can play in carrier coverage? And is there any threat to the tower business, to the terrestrial wireless networks?

Well, I think of 2 different LEOs. I mean, Iridium started...

A long time ago.

Yes. One of the biggest bankruptcies on the '90s. We were working back then, yes. And now it's coming back. I think it's always going to be a niche product for the handset, you send a text or you make a call if you're in an area with very little coverage or no coverage. I think the SpaceX business model is very different. I mean, having run sales and marketing for the old MSV mobile satellite adventure, having working in the industry, I think it's a fantastic product for the maritime industry, cruise ship, container shipping, you could do like live tracking of all these containers. You have WiFi on the ship. It's great for the airline industry. You have WiFi on the plane, you put a small dish on the roof of the airplane and you have fantastic connectivity. You live in rural America, you get 200 or 300 kilobits of data. You're not going to watch Netflix, but you're going to have e-mail and pretty good coverage, but you're still going to need to have plugged the antenna to an outlet. You need to be outside because if you have a tree or you're inside, you don't have coverage. But it's a fantastic product, but it's more a data product than a voice product.

And the use cases you mentioned more like the legacy Viasat business?

That's right.

Right, right. I mean, shipping, recreational and boating, mountaineering, rural broadband, that's all legacy use case. You don't think that the application can be more just regular cellular usage, direct-to-device, providing usable broadband speeds?

I don't see it just because the cost per bit is going to be an order of magnitude greater than the cost per bit on the wireless network.

That's the name of the game, right? What are the cost to carry a bit?

That's right. What's the cost to deliver a bit over the air. And it's always going to be lower on the wireless network because the handset is cheap. The RAN network is cheap. You have massive scale that you're never going to get in the satellite industry. I mean, Keyera is paying $40 billion just in the U.S. building a RAN network. Imagine you have 300 megahertz of spectrum to deliver basically a bit to a handset using this massive infrastructure. It's going to be -- I don't see the satellite industry being to replicate the capacity, the throughput and the cost per bit.

No, that was very helpful. Marc, we run out of time. Thank you so much for being here today.

Thanks for having me.

Thank you. Good to see you again.

See you again.