Started here with the next session. Really pleased to have Kris Hinson from Crown Castle here with us today, kind of continuing. This is nice. We've included a lot of tower companies on the same day of the presentations. Yesterday was data center today, and today is tower day. It's nice to continue that conversation and kind of the same questions and a narrative that I know a lot of investors want to hear. I'm going to open. Well, first of all, Kris, thank you.
Thank you. It's great to be here.
Thank you for coming. Just for the audience, I will allow about five minutes at the end if you have any questions. They will walk around with a microphone, so just raise your hand when I mention that, and we'll make time for you as well, please. Back to my point, I'm going to open the same way I did with Mark earlier, where investors are, I think, very focused on trying to determine when we're going to see growth inflection positive in the tower industry. The way I think that Crown Castle has talked about it is, this being a low point for growth, right, this year because of a number of headwinds. Can you take us from that low point in growth and what factors are going to drive accelerating rent growth?
Sure. As you mentioned, our organic growth forecast for 2026 is 3.6%, excluding the attrition Sprint. We do expect that to be a low point. I think it will get better from there going forward. We'd also, when we initially put out our guidance at the beginning of the year, talked about how we expected activity to be a little back-end loaded as we go through 2026 as well. When we think about what drives that, there are several things for Crown. One thing specifically, which is what leads here to point two is, we have long-term contracts with our customers that provide pretty good line of sight into activity for us going forward.
That gives us confidence that things will pick up and be better from here. There are also some positive tailwinds as well that we see. There is the spectrum acquisitions, so AT&T in particular acquiring the 600 from EchoStar. Then also as we look at spectrum auctions going out in late this year, early next, as well as sort of longer term, up to 800 MHz of spectrum that the FCC has talked about auctioning off. I think all of that has historically provided support for our business, and we would view that as a positive in this case as well.
Okay. Just breaking down the piece parts then, you mentioned the AT&T 600 MHz. How impactful could the deployment of 600 be for Crown Castle?
Yeah, we do not go into too much detail.
Yeah.
The
Is there a way you can frame it broadly, though? I know you are not going to sell by cell site, but even broadly frame what historic deployments making a little spectrum meant for Crown Castle so we can get some context.
Yeah, I think having low-band spectrum, it tends to be larger equipment also.
AT&T, they spent a fair bit of money on this, and I think it's something that they are likely to want to deploy. That activity and the equipment that is required is something I would expect to be a positive for towers and a positive for us specifically.
Okay. I guess historically, when carriers deployed similar low-band spectrum, what percentage of your towers was that deployed on historically?
It depends a lot on the specific plans
Yeah.
carrier by carrier. But you generally would see when spectrum is made available, new spectrum of any kind, it tends to be impactful. Obviously, depends on where we are in the cycle and what the individual plans are for the customer. But again, I would certainly expect this one to be positive for us.
Okay, that's clear. In the C-band expectations, you probably don't get that cleared until, say, 2029, 2030. When do you think you'd expect to start seeing activity, though, related to C-band?
Yeah, it always takes a little bit of time after
Yeah.
Some of the actions. Obviously, there's a planning process that happens with each of our customers as they think about how to deploy spectrum that they acquire. And when you think about the tower space, we are a little farther out at the end of the value chain as well.
If you think about going from everything from equipment down to actually getting the equipment on the tower. It takes a little while to work through that planning process. This is an area where we do our best to make sure that we build and maintain good relationships with the customers so that we can be involved at points where it is most helpful for them as well, and try to make sure that we can engage in a way where we make the process seamless for them and also, hopefully add a little bit of value along the way.
There was some discussion in 2Q kind of broadly across tower companies and also from the builders like MasTec and Dycom, about one or more carriers actually slowing activity in the first part of the year. I think some of the comments pointed to that it might have been related to just headcount reductions at one or more carrier, and that would suggest it is a temporary slowdown, right? There has also been some thought, though, that maybe carriers are achieving densification more on owned fiber and with small cells, and that might be driving part of the slowdown. Can you address that in Crown's position or view on this and how that might be contributing to your comment about better activity in the second half of the year?
Sure. There are a couple of things. I think, of course, we have seen our activity. We have called out the 2026 as a low point.
Yep.
Certainly nothing to point out for a specific customer, but we have seen lower activity in 2026 than we did in 2025 and expect it to go up from here. I think there are a lot of things that come into play, and it is a combination of things that go on in the market and also the situations with individual customers and where they are in their planning processes. One other thing that you did not mention that I was just going to talk to is with more spectrum being made available.
Even with the spectrum that was purchased from EchoStar, I think it makes sense for our customers to make sure that they're optimizing around what's available and factoring all that into plans. It's not uncommon when you see spectrum acquisitions or auctions for that to take a second to work its way through the planning process, and then also for us to ultimately see it in activity levels on the tower side.
By that you mean when carriers acquire new spectrum, they might actually pause their original plans to rework in or to work in the new spectrum, and that could cause some dip in short-term activity. Is that your
I think historically they could, certainly. Yeah.
Yeah.
I think, if something new is made available, obviously it makes sense for them to optimize around what they have, and sometimes I have to imagine that factors into some of the planning.
Okay. I used to call with management team a week or two ago, and thank you guys again for doing that. The call was large to address or just talk about LEO-based service and what is required, not required on a terrestrial basis.
Okay?
One comment made on the call was, we still have a lot of DISH equipment hanging from our towers. If you can also remind us how much revenue historically you got from DISH, just so we have that number. Then the comment was, we would be very open to talking to any LEO operator that wanted to utilize that equipment, maybe for faster time to market and better coverage, more reliable network than you could ever achieve through a femtocell-based terrestrial build.
I guess first of all, how much revenue were you receiving from DISH, EchoStar? Then, I guess, how far in advance of wanting to deploy a network would somebody have to approach you and start having those negotiations about utilizing equipment?
Sure. In terms of DISH, first of all, we talked about the churn as we went into this year. We have no revenue from DISH in 2026, and the churn is a little bit in excess of $200 million.
Yep.
As far as the equipment goes, certainly if it is something that the folks are interested in-
That would be great. It is still going to take a little bit of time, I think, if someone were to want to try to deploy it, in order to go down that path.
I am sorry, I might have missed it, but historically, how far in advance of doing a new component of a build of 4G or 5G, will you start having those discussions with the wireless operator? First, we could assume time or lead time.
For something that would be a larger deployment, you might start having conversations a year out or so.
Okay.
Then we typically would have some lead time in the range of, call it six- nine months or so when decisions are made for particular sites and when we would start seeing revenue.
Okay. Historically, we all thought about things like application volumes and amendment requests as being good lead indicators of the business, at least for pipeline. Are you seeing any changes in these metrics that would suggest or support acceleration leasing activity, back to your point about 2026 being low point for growth?
On services?
Yeah. Exactly.
Yeah. We've talked about this a little bit. I think we made some changes to our services business going back to 2023. We exited construction services at that time.
You are doing more consulting engineering now with what you are doing on the services side versus construction.
That is right. So we are not going out and doing structural modifications or hanging things on the tower. Instead, we are focused on things like design work, structural analysis, permitting, that sort of thing. When we made the decision to exit the business, we looked at what our capabilities were and ultimately, what value we were adding and how profitable it was. It is a competitive business and one where, at the end of the day, we were not even necessarily winning a lot of business on our own sites. It was something where we looked at it and we said, "Hey, look, we are not adding value here. We are not making money on it, so we will exit." With what we have kept as well, that is a very high-margin business for us, so our margins are in the ballpark of 60% on the services business that we do.
Focusing on pre-construction, and I think it was actually as high as 53% in the second quarter. We are focused in on the work where we do uniquely add value, and we generate very strong margins as a result. We do not necessarily have an arrangement where we win all business on our sites with all customers, though. At the end of the day, win rate becomes a factor, even on the services that we do provide when you look at the services margin numbers that we report. When we go back and look at how, even after we try to adjust for exiting the construction services business, when we look at what we have done in services and then what follows on the leasing side, it is just not something that has been a reliable indicator as we go forward.
Is the correlation lower now then because you are not doing construction? Because I would have thought that if you were doing more of the engineering and more of the analysis piece, that that would even be a better leading indicator.
I don't know that it has gotten lower.
Yeah. Okay.
But at the end of the day, the activity, given that if the win rate fluctuates, as an example, that's something that can drive a change in the services margin, but not on the leasing side. As I said, we found those two to be relatively disconnected.
Okay.
They were somewhat disconnected when we had construction services as well. It's not that it's a new problem, but I definitely don't think that you can draw a straight line from where services is or where it is trending into where leasing is going to go in the near term.
Okay, perfect. Have you seen any change or shift in carrier conversations related to AI? There's been a lot of discussion from the carriers about AI changes, the kind of those downlink/uplink requirements and if someone had been kind of reconfiguration or thoughts around network engineering, if you're having those conversations today.
I think that it's something that is not having an impact today
Yeah.
On what we see come through the numbers. But I do think it's something that we're certainly excited about. You had mentioned downlink/uplink. I think if we look at some of the potential use cases, you're looking at uplink capacity needing to be 3x what it is today. Obviously, that takes spectrum.
And that, at the end of the day, is something that would be positive for us. I do think that, while I wouldn't characterize any of this as something that in the near term is factoring into anything that you've seen in our forecast, certainly for this year, that it is an area where we're optimistic, and I think it looks very promising long term. It's hard for me to imagine that if you look at just the capital that's going into the data center space and the AI space when you compute, that that isn't eventually going to come to where people are on their device. And that obviously will make some of the changes like we talked about with uplink, but just also in terms of mobile data consumption. It's hard to imagine that this isn't going to be a favorable thing.
Yeah. We would agree. That goes back to the first question, kind of predict how you get from where you are today to bridging for faster growth, the next few years. I am curious to hear from you in particular just about since Crown Castle is now a pure U.S. tower company and the other small celler pieces now are gone from the business. How has that changed your conversations with customers or hasn't it changed the conversation?
I think that it's changed the way a bit that we approach customers. If we take a big step back, I think we went through a strategic review process, which culminated in us selling our fiber and small cell business. That transaction closed in May. But we saw a lot of value in operating as a pure play U.S. tower company. At a corporate level, we've been very focused on both organizing and structuring the business in a way that makes sense as a towers-only business. But there has been a lot of benefits that have come from just being able to focus on doing a couple of key activities and having a couple of key capabilities that we do really well and having a great set of assets.
As we have focused on that as a corporation, I think we've shown a lot of progress in driving efficiencies through the business. We had a restructuring that we announced in the first quarter, and we have continued to make progress on the cost side as we've gone through the course of this year and expect to continue to make more progress as we go forward.
On the commercial side, since I've been in this role, I think a lot of what I've been focused on is trying to do the same thing with our commercial strategy and make some tweaks on the margins to make sure that we are aligned in a way that's going to be easier for our customers to interact with us, to basically decrease the number of handoffs and touchpoints as we are sort of making sure that we're organized appropriately as a tower-only business. But I also think that just being able to focus on what we do best is good. We're making sure that we're aligned and organized in a way that makes sense. Then, I've spent a lot of time going out trying to make sure that we are building and maintaining good relationships with the customers and having the right kinds of conversations.
I think all of that has been helpful, and the focus that you have seen driven results on the cost side are also being helpful on the commercial side as well.
What do customers tell you on how they want to purchase tower capacity, optimize their network, kind of basically want to interface with Crown Castle and other tower companies? My view is historically it was a very contra-traditional sales and relationship approach, right? Very person to person. Are they telling you now they want to self-provision more, or they want to be more online? Or how do they want to interact with a tower company like Crown Castle?
I still view this very much as a relationship business.
I think there are certain things that we offer that are really big parts of our value proposition that don't have a lot to do with that if I were to sort of prioritize things, and location is extremely important in this business.
Sure.
We have 40,000 towers, 70+% of them are located in the 100 largest Basic Trading Areas in the U.S. We've got a good footprint and a good asset base. Obviously that drives a lot of business for us. A lot of the things that we do when we think about the relationships that we have, we do want to be able to find ways to create alignment and generate value for our customers. Then hopefully, keep a little bit of that for ourselves as well. We do try to find ways that we can sort of help out.
Things that they look for, I think, are reliability and consistency. Nobody likes to be surprised, so on the operations side, just making sure that we can provide accurate estimates of how long things will take and that we do what we say we're going to do are really important. That's what we strive for.
The relationship manager part of the business is important, maybe not an area for more efficiency there, but something that was talked about a lot, at least a couple of years ago, is even just things like maintenance, which is also very human capital intensive today. The idea that you can utilize digital twins and drones and other technology to do some of that work. How much is Crown Castle integrating some of that technology to help to reduce cost?
Yeah. That, what we mentioned specifically, is stuff that we are doing.
I think that we're always looking for ways to improve our systems and integrate technology, and also, to the extent that there are duplicate costs or things like that we can look at, it's always nice if you can do something good for your customer.
Yeah. No, and I understand. So another growth area we've talked about, and it's not new, we talked about in 2016 or 2017, are edge data centers, right? Is that something that you're thinking about and talking about, and if you are, how big is the opportunity?
Yes is the short answer.
Yeah.
But I should be clear about how we're thinking about it. We actually have a customer that we've talked about, Available Infrastructure.
Who is looking to build out a nationwide network of neocloud data centers. They are a customer of ours. We're very much in early stages of that. I would say that we're in a sort of trial phase on the concept of
Sort of going into this edge space. When we think about that area, I don't view it as a new business for us, really, or at least not something new that we are doing. We have 40,000 units of distributed real estate, and we have power and fiber availability on virtually all those sites. What we do is we lease space, and so whether it's vertical space or horizontal space, we're a real estate company, and we lease space on our assets. As we look at things like the edge applications, this is just a continuation of using the assets that we already have and using the capabilities that we already have. We're not looking at spending a lot of CapEx on any of this. We're not looking at buying or building data centers. We're not looking at operating something that we're not operating today.
We're just trying to take the assets and capabilities that we have today and apply them in ways that allow us to maximize the amount of revenue we generate from the assets that we have.
Have you surveyed your portfolio and determined how many towers would be suitable for edge data centers based on space and power availability?
Yes. It depends primarily on power availability.
Yeah.
But I think we talked a little bit on the earnings call and said 0.2 megawatts was kind of an average representation.
Yeah.
I would just say that in general, we're looking at playing in a space that's in all likelihood a megawatt or less. But we have space and power at the majority of our sites. We also have shelters on a fair number of our sites as well. So we're trying to utilize those assets that are already there the best we can. If somebody does want something more bespoke or to build that out, that's something that is a possibility too. But we're not at a point where we're looking at really putting our own capital into a lot of this stuff.
Just so we don't get ahead of ourselves, how should we think about timing for edge data center and then I guess the size or the scope of the opportunity?
That's what we're trying to figure out with the work that we're doing. Part of going through this trial is figuring out what the size of the opportunity is and what the timing looks like. We'll learn along the way as we do this, but that's one of the things that we're working on with this trial.
Okay. I know you just exited fiber in small cell, but we're talking about, I guess, additional business opportunities or addressable markets. Are there other areas that you're exploring to expand your addressable market?
Yeah, look, I think that the way that I would characterize it is, yes, there are things that we are thinking about. I don't think that there's anything that is particularly advanced at this point. But when I think about where we should play, it really is focused around those capabilities and the assets like I talked about. Certainly, in my first three months on the job, I've tried to think about what potential applications would make sense given what we do well and what we have
And think about how to prioritize those opportunities and then pursue the ones that make sense vigorously. But more to come on all that.
Okay. In your conversations with the carriers, I am always curious how these conversations evolve, but do you specifically address need for additional FWA capacity, or do they not break down, discuss why they are trying to densify or add capacity?
It is more the latter.
Okay.
From our standpoint, the exact use, whether it is FWA or mobile traffic or whatever, is not something that really comes into the conversation. From our standpoint, anything that is needed and used to bolster the network is going to be good for us. From our standpoint, it all sort of characterizes looking the same.
Do you ever try to do your own research, though? Because there are websites you can go to. You can kind of calculate aggregate network capacity. You can actually see where FWA is available for each carrier, which would obviously signal that they are out of capacity, they pulled back from an area. Do you ever do your own research to try to determine why a carrier is looking to add capacity and if it is related to FWA?
We do some of our own research, but I would say that we are primarily interested in what capacity is going to need to be added. As part of that, yes, sure, we'll look at maybe the rationale behind it as part of building it up, but we're sort of indifferent in terms of what the use is.
But capacity adds of any kind are going to be good for our business.
Okay. On the most recent earnings call, AT&T noted that they're going to prioritize fiber, which is not a surprise, and they have their 60 million-plus homes past target. But it did feel, at least to me, like a slight shift to maybe deprioritizing FWA, right? Favoring fiber, which makes sense if you're trying to protect or lock down your subscribers ahead of a potential Starlink service availability with V3 satellites. Are you sensing any pullback in activity from AT&T into FWA?
Like I said, it's not something where we're having a lot of conversations that are specific to their use case. But look, there's nothing to call out really with any of our customers in terms of changes of activity here that have had a material impact beyond what we've discussed.
Okay. I think historically the view from the outside at least was that the carrier and tower relationship, I do not want to call it antagonistic, but that it was not always a great relationship, right? The carriers felt that they were spending too much, probably like any customer does, right, of any vendor. I guess how or what is your plan for improving the carrier relationship?
Yeah, well, first of all, I think Crown Castle has historically had good relationships with
With the MNOs and with our other customers as well. I think there are all sorts of reasons why we will not always be perfectly aligned on everything.
I have vendors of my own, and yes, all else equal I would always like to pay less.
Yeah.
But look, I mentioned before, I think a lot of this is a relationship business and there are areas where we can find alignment and where we can do things that are mutually beneficial. I think I've spent a lot of time early on trying to find those things and work with our customers to do things that will benefit both of us, as opportunities do exist.
I also think that there's just an element of being able to execute a little bit more efficiently over time for them, which is helpful. On the commercial side, specifically, at least make the interface as easy as it can be. Not having too many handoffs and just being able to generate clarity and help them meet their objectives is always something that's going to be appreciated. But spent a lot of time already working with customers across the board, trying to make sure that we can maintain and build those relationships, and that's going to be a key part going forward.
Do you have examples for the pain points that you found, either where there wasn't good enough alignment or efficiency didn't meet expectations? Do you have examples, just so we can visualize what can be improved?
I think anything that we can do to improve cycle times is always helpful.
Making them both more reliable and shorter. Like I said, making the interfaces easier for the customers, I think is always helpful as well.
Okay. Any conversations or even your thoughts, the potential for Starlink service to impact carrier network builds, specifically in more rural or semi-suburban areas where maybe LEO might actually be a good alternative to traditional wireless?
It's pretty hard for me to imagine that it would have any impact.
Look, if you go out to extremely rural areas, I think it's
Remind me, your tower footprint is the mix of urban, suburban, and rural?
Yeah. It is a mix of all three.
Yeah.
But we are, I think, more skewed urban, suburban.
You're skewed urban. Yeah.
Like I said, we have 70% of our towers, a little more, are in the 100 largest BTAs. All that said, I think that it would only be in very marginal cases where you would see any overlap. By and large, this will be complementary only. I don't think that there's going to be a lot of competition for our large customers. I don't see satellites as anything that would be a negative for our business. I think if anything, it would be a positive.
In terms of new business activity, how competitive is that between you and, say, SBA and AM T, or is it more that the carrier needs to have coverage in a specific area and you're the only tower company that has an asset there to provide coverage?
Location is
a very strong determinant of network planning for our customers. There are situations where you're going to have some jump balls. There are cases where at least there are going to be multiple options available. We do want to make sure when we're talking about some of the things around the relationship and making things easier for our customers, that we are at least as easy to do business with as we can be, and that we maintain those relationships. So, when there are these situations on the margin where carriers do have decisions to make and they have options, that they prefer to go with us.
Mm-hmm. I think one thing I know I struggle with the least is that network traffic has continued to grow by, what is it, 28%, 30% year-over-year. So very robust traffic growth, but we maybe just haven't seen the level of carrier activity that we would have expected to follow that level of traffic growth. What's your assessment for why that was not a better leading indicator for carrier activity and, absent from the spectrum auctions and other factors, what drives that need for densification?
Yeah. I think if you look over a long period of time, that data demand growth has led
To very steady growth in our business. Organic growth for any of the tower companies has always looked different and has also bounced around if you look over short periods of time. So year to year, you will see organic growth change for SBA, AMT, and Crown Castle. Depending on where you are in the deployment cycle, you have historically seen higher growth rates at certain points along the way for one of the players than the others. I don't think of anything that's going on now or what we're seeing as anything that's much different than what we've seen in past cycles. In fact, if you go back and look at low points of organic growth in the 4G era, there were years where Crown Castle was on par with where we are now.
I think as a whole, you've seen something that's probably been comparable, if not a little bit better for 5G so far. All that is to say, I know that this business is incredibly stable, so when you see small fluctuations in organic growth rates, it tends to have a big impact. If you do zoom out and look over a longer period of time, and particularly over a full deployment cycle, I think, one, I wouldn't really expect the performance to be wildly different for any of the tower companies, and I don't think that we've seen anything so far that would suggest that there's been some sort of structural change in the way that activity levels will play out through the rest of 5G.
I'll open it for questions here in a minute. There should be a microphone to go away if anyone has any questions. I want to go back to the 6G comment that you made earlier because I think that is being looked at as the next big catalyst for spending. What does 6G mean for carrier spending in terms of equipment? We've heard some comments, equipment's going to be much larger, right? Greater load on the tower, so higher rent per site. How are you and Crown Castle thinking about 6G as a driver of growth?
Yeah, I think that there are a lot of things to be optimistic about
Regarding 6G. I still think that some of the bigger potential things to come are going to be around AI adoption and
New applications that we haven't thought of yet. I think to the extent that we get to a point where there are new applications that are highly sensitive and require ultra-low latency, that's the kind of stuff that I think will ultimately come and I think be really good for 6G and for our business.
Does that also then point toward more demand for small cells and the lower latency need, or can you still use the macro site and achieve the latency required?
Yeah, you can absolutely still. Macros are always going to be a part of
Yeah,
The solution.
The network, yeah.
Look, I think over time there will be more small cells as well. It's not something that is going to detract from the macro tower side of things. I think you're going to need both, and I think macro towers will certainly benefit, and I think will benefit first.
Do you anticipate any changes in contracts over the intermediate longer term? Obviously historically we had the fairly ratable escalators in contracts and fairly standardized master lease agreements. Any notable changes you expect?
Not really. At the end of the day, whether you're working on MLA, off MLA, or what the flavor of the MLA is.
These agreements and pricing ultimately are set by supply and demand. I don't think that as long as data demand growth continues at the rates consistent with what we've seen in this 20%-30% range, that there's going to be a significant shift in that balance. To the extent that there's not, I don't see anything structurally leading to a big change one direction or another in terms of the terms of those agreements. There are always things that come up, and that are of particular interest or there are particular pain points for network build-outs that can have some impacts on the margin. I don't think that there's anything structurally that looks different in terms of supply, demand than what we've been seeing. As long as data demand growth continues the way that it has, I don't see that changing in a particularly meaningful way.
Are carriers expressing, though, that they think that maybe being off MLA is better than being on MLA, where you can do it more à la carte, especially if you are not doing a major wholesale network upgrade or build in the short term, maybe there is some value to just being able to go à la carte, make more selection versus having a holistic program in place?
I do not think there has been a lot of change there. In general, I look at the MLAs as if we can provide additional value to the customers by providing the flexibility that comes with an MLA, and then we get some more stability with these longer-term agreements. It is usually something that works out very well for both parties. But in order to reach an agreement on an MLA, you have to, by definition, have some sort of shared agreement on what the ultimate development plans are going to be at a high level over time. But there is an understanding that there is going to need to be a certain amount of investment in order to meet the needs of ultimately our customers and users. And we have found that to be the case more recently because we have certainly used MLAs a lot over recent history.
I think as long as that continues, there are real opportunities to add some value for both parties by doing them. And as long as that is the case, we will. But if for whatever reason we see things differently or there are different objectives and it makes more sense to operate off of them, then so be it.
Okay. Kris, that was great. Thank you so much.
Thanks a lot, Michael.
I appreciate it. Okay. Thank you again for coming out.
Absolutely.
Really appreciate it.