Crown Castle Inc. Presentation at Goldman Sachs Communacopia & Technology Conference
Crown Castle Inc. (NYSE:CCI) recently participated in the Goldman Sachs Communacopia & Technology Conference, where Chief Financial Officer Dan Schlanger shared insights on the company’s strategic review and future plans. The conference call took place on September 10, 2024, at 10:30 AM ET, with Jim Schneider from Goldman Sachs as the telecom analyst leading the discussion.
During the conference call, Dan Schlanger discussed the changes that Crown Castle has undergone in the past year, particularly focusing on the ongoing strategic review of their fiber and small cell business. He highlighted the importance of the assets the company has built over the years, emphasizing the role of towers in delivering network and digital infrastructure in the US.
Schlanger explained that Crown Castle had recognized a significant opportunity in densifying the network through small cells, which are shorter towers that can be placed closer together in densely populated areas. This strategy aimed to address the increasing data traffic over the network, especially in markets where traditional towers were not sufficient to meet the demand.
As part of the strategic review, Crown Castle conducted an operating review of their fiber and small cell business, leading to several changes in their approach. The company decided to focus more on on-net or near-net opportunities, reducing capital expenditure and optimizing resource allocation to enhance efficiency and productivity.
One of the key aspects of the strategic review was to evaluate whether the fiber and small cell businesses should remain integrated or be separated under different ownership structures. Schlanger emphasized that while the operational aspects of the two businesses could be separated, the decision on whether they should be split or remain together was a complex one that required careful consideration.
The company’s Board was actively engaged in determining the best path forward for Crown Castle’s ownership structure, taking into account factors such as maximizing shareholder value, long-term growth prospects, and investor sentiment. Schlanger highlighted the importance of balancing short-term results with long-term value creation, acknowledging the challenges of navigating investor expectations and market dynamics.
When discussing the tower business, Schlanger expressed confidence in the steady growth potential of the core business, despite fluctuations in the market and industry cycles. He emphasized the resilience of the tower business model, which leveraged existing infrastructure to drive incremental revenue with minimal additional costs.
Schlanger also addressed the impact of the T-Mobile-Sprint merger on Crown Castle’s business, particularly in terms of churn effects and revenue projections. He outlined the expected revenue loss associated with the merger and provided insights into the company’s growth algorithm for revenue, EBITDA, and AFFO in the medium to long term.
Regarding future investments in the US market, Schlanger highlighted the role of spectrum availability in shaping carrier spending and network expansion strategies. He noted that limited spectrum availability could drive increased densification efforts, leading to more small cell deployments and accelerated infrastructure investments.
In conclusion, Crown Castle’s participation in the Goldman Sachs Communacopia & Technology Conference provided valuable insights into the company’s strategic direction, operational changes, and growth prospects in the evolving telecommunications landscape. The ongoing strategic review and focus on optimizing resources and investments underscored Crown Castle’s commitment to maximizing shareholder value and capitalizing on emerging opportunities in the market.