Crown Castle International Corp. (CCI) is moving into a new growth phase focused on maximizing organic tower expansion and operational efficiency, CEO Chris Hillabrant said at the Goldman Sachs Communacopia + Technology Conference on Wednesday.
Hillabrant marked his one-year anniversary as chief executive the week following the September 9 conference. The company completed a portfolio transformation in May 2024 when it closed the sale of its small cell and fiber business, making Crown Castle a pure-play U.S. tower operator.
"We are now moving into the next phase of focus for us, which is all about maximizing organic growth, finding ways to invest in the systems and processes that will allow us to be more efficient and serve our customers better," Hillabrant said.
The company outlined a 200 basis point margin expansion target by 2026, driven by revenue growth, ground lease buyouts, and the rollout of automation tools. Two AI-native tools have already launched, with two more planned this year. Crown Castle noted that its ground lease ownership sits roughly 10% to 11% below best-in-class levels, a gap it aims to close over time through accretive buyouts.
On the capital side, Crown Castle maintained its full-year leasing revenue guidance of $60 million to $70 million, with activity expected to skew toward the back half of the year. Annual capital spending is projected at $100 million to $200 million. The company cited a free cash flow yield of 7% and a total debt load of $23.4 billion against a leverage ratio target of 6.0x to 6.5x. Its long-term AFFO dividend payout ratio target remains 75% to 80%, supporting a dividend yield of 5.59%.
The company's portfolio encompasses approximately 40,000 sites concentrated in the top 100 U.S. markets. Data traffic has grown at a 30% compound annual growth rate over the past five years, currently split roughly 90% download and 10% upload. Management expects 6G networks to shift that balance closer to 50/50. Early-stage edge compute trials are underway at more than 100 sites, using ground space for data centers generally under 0.5 MW.
On spectrum, Hillabrant pointed to the upcoming upper C-band auction in April 2025 covering 160 MHz of the 800 MHz mandated for 6G. He expressed confidence that carriers will find ways to clear spectrum faster when needed, citing historical precedent for engineering solutions around issues such as altimeter interference. Looking further out, potential future auction bands were identified at 2.7 GHz and 7 GHz by 2034.
Crown Castle also addressed obligations tied to DISH Networks. The company confirmed that a $3.5 billion contractual obligation from DISH has been called forward, while an FCC-established escrow fund holds $2.4 billion. The topic touched on broader carrier dynamics involving AT&T, Verizon, EchoStar, Starlink, and regulatory bodies including the FCC and 3GPP standards body.
On Starlink's femtocell approach, Hillabrant was skeptical, noting that deploying a femto-based network would require near-universal femtocell adoption across homes, businesses, and vehicles.
