美國電塔 (AMT) 2007 Q1 法說會逐字稿

Good morning. My name is Tandra, and I will be your conference operator today. At this time I would like to welcome everyone to the American Tower first quarter 2007 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS). Thank you.

I will now turn the call over to your host, Mr. Michael Powell, Director of Investor Relations. You may begin, sir.

Thank you, Tandra. Good morning and thank you for joining American Tower's conference call regarding our first quarter 2007 results. We will begin comments from Brad Singer, our Chief Financial Officer, who will then turn things over to Jim Taiclet, our Chairman and Chief Executive Officer; however, before we begin, I'd like to remind you that this call will contain forward-looking statements and involve a number of risks and uncertainties. Examples of these statements include but are not limited to statements regarding our full-year 2007 outlook, our stock repurchase program, future financing activities, and any other statements regarding matters that are not historical facts.

You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Those factors include the risk factors set forth in this morning's press release and those set forth in our form 10-K for the year ended December 31, 2006, and our other filings with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update this information contained in the call, including these forward-looking statements, to reflect subsequently-occuring events or circumstances. Our earnings release, which includes information required by Regulation G, was furnished this morning to the SEC this morning on a form 8-K and is also posted on our Web site.

Now I would to turn things over to Brad Singer.

Thanks, Michael. American Tower continued its strong performance in the first quarter, with significant revenue, adjusted EBITDA, and free cash flow growth.

In our core rental and management division, our revenues and gross margins increased 9% and 11% to $346 million and $266 million, respectively, from the first quarter in 2006. Our rental and management revenues and gross margins include a $4 million year-over-year increase in non-cash straightline revenue, primarily from the extension of approximately 5,000 leases with a major customer for ten years that occurred in the first quarter of 2007. With this latest master lease agreement, we have successfully negotiated multiyear extensions on the majority of our leases with the major wireless carriers and now have approximately $8.2 billion of noncancellable lease equipments, approximating six years of revenue. We expect that non-cash straight line revenue will decrease sequentially in the second quarter of 2007 by approximately $4 million. Please note also, for comparative purposes, we had $4 million of net positive nonrecurring items in the prior year first quarter, in both revenue and gross margin.

Our total selling, general, and administrative, and development expense was $48.6 million, including $16.7 million of nonstock-based compensation expense. The higher than anticipated stock-based compensation included $7.6 million and one-time charges related to the departure of employees and we anticipate recognizing approximately $11 million of stock-based compensation in future quarters in 2007. Our selling, general, administration and development expense also included approximately $2.8 million of additional cost associated with the stock option review and related matters. Including the additional cost associated with the stock option review, our adjusted EBITDA increased 10% to $236.7 million and our adjusted EBITDA margin was 67%.

Our income from operations for the quarter increased to $86 million and we are pleased to announce the fourth straight quarter with positive net income, with earnings of $22 million. We would also note that subsequent to the end of the first quarter, we received $80 million of net proceeds from the IRS-related tax refund claims we filed during 2003. These proceeds will not have any impact on our second quarter net income, but will increase cash provided by operating activities. Our capital expenditures totalled $31 million. During the quarter, we completed construction of 22 towers and four building installations. The average unlevered day one return on new towers and in-building projects was 13%, with strong prospects for additional tenants further increasing our future returns on invested capital. While the number of new towers was slightly below our expectations, we continue to anticipate completing 200 new towers and 25 inbuilding sites, approximately.

We substantially increased our land repurchase activity, acquiring almost $10 million of land in the first quarter, with a goal of completing $40 million by the end of the year. With our strong revenue growth and disciplined capital spending and cost control, we've produced approximately $140 million of free cash flow for the quarter, which we define free cash flow as cash provided by operations less all capital expenditures. Please note that free cash flow calculations include approximately $2.8 million of costs related to our stock option review, and approximately $16.6 million of discretionary capital spending on new site construction and land acquisition.

As indicated in our press release, we are refining our 2007 outlook. At the midpoint of our 2007 outlook, we anticipate tower revenues of $1.41 billion, tower gross margins of $1.08 billion and adjusted EBITDA of $977 million. We continue to anticipate 2007 levels of commenced new business to be slightly below 2006 levels without any significant commenced leasing activity from the AWS auction licensees. We expect the level of signed new business to be at or above the 2006 level as we look forward to the AWS auction licensees securing sites for deployment in late 2007 and into 2008 and beyond. Our financial position continues to improve due to the strength of our operations and the continuing solid fundamentals of the wireless industry.

Subsequent to the end of the first quarter, we began the process of recapitalizing our balance sheet to extend our maturities at a reasonable cost while maintaining an appropriate level of financial flexibility. In May, we successfully issued $1.75 billion of mortgage pass-through certificates for close to 5300 of our sites, representing approximately 25% of our entire portfolio. The offering was successful in several respects. It was the first tower-related securitization, which was fully related by all three credit rating agencies, it established the longest initial term until anticipated repayment, of seven years rather than the industry norm of five, and it was priced at a highly competitive weighted average interest rate of 5.61%.

As we look forward to the future, we anticipate continuing to improve our financial flexibility with additional sources of liquidity, as well as long-term debt. During the first quarter, we repurchased 12.6 million of our shares for approximately $500 million. Completing the initial $750 million stock repurchase plan at the end of February and commencing our new $1.5 billion stock repurchase plan. As of May 2, we have purchased over the past year and a half, approximately $1.04 billion representing 29.3 million shares with $1.21 billion remaining on our plan. We intend to refinance the remaining share repurchase plan with the cash from the securitization, cash generated from operations, our existing credit facilities, and now financing.

With five weeks into the baseball season, the Red Sox comfortably in first place with the best record in the American League, I'll turn things over to our Chairman and CEO, Jim Taiclet.

Thanks, Brad, and good morning. Well hopefully we'll still be talking about the Red Sox in first place in October.

At American Tower, we still have lofty aspirations as well. Our goal is to be our customer's clear preferred business partner for their siting needs both today and in the future. All our efforts over the past few years have been in pursuit of this objective and we firmly believe that obtaining a preferred supplier position with our customers is the most certain path to delivering operating results that exceed our shareholders' expectations. While we are clearly not satisfied with where we are and are striving to improve the company on many dimensions, we do believe that our demonstrated history of consistently delivering on our promises and the initiatives that we have taken will continue to help us deliver sustainable strong performance.

Our first promise was to achieve greater scale while maintaining the high quality of our tower portfolio. We delivered on this promise by effecting our merger with SpectraSite, which we have been operating as a fully-integrated company for over a year now. The second promise was to operate our assets effectively and efficiently. We're delivering on this promise through our rigorous commitment to operational execution, which enables the company to consistently deliver the highest revenue per tower and operating margins in the industry. The third promise was to continually improve our financial position. We are delivering on this promise by reducing our financial leverage, extending maturities, and utilizing a diversified range of financial instruments.

Our balanced financial strategy enables us to efficiently finance the company's assets and fund our substantial share repurchase program, while providing the strategic flexibility to act on opportunities to bring high quality assets into our portfolio that add value to the company. Our recently completed securitization transaction speaks to the benefits of this approach to our business. The size of the deal at $1.75 billion, its extended seven-year term, favorable costs, and fully-rated status from all three credit rating agencies reflect both the quality of the specific portfolio that was financed and the stability of the overall company.

From our approach in the midst of the wireless industry, we see the makings of a continued favorable environment for the future. Wireless communications continue to increase in importance for customers on the consumer and business side alike. New offerings from existing carriers and creative services and pricing plans from new carriers continue to drive additional penetration of mobile voice in the United States. Family plans, free calling circles, and targeted ethnic and affinity group marketing are among the programs that are pushing U.S. wireless penetration past the 75% mark.

Moreover, the affordability and flexibility of unlimited local calling plans both encourages wireline substitution and extends the availability of wireless telephony to a broader economic demographic. As a result, our major customers in both the U.S. and Latin America are enjoying sustained growth in revenue and profitability, making it possible for them to reinvest in their networks, to ensure sufficient voice capacity and coverage. The increased size and financial strength of many established wireless carriers has also enabled the initiation of nationwide 3G service by three of the four U.S. carriers, with the fourth now in a position to begin its deployment of a 3G network late this year.

We are already beginning to see the demand for tower space generated by the new spectrum made available last year through Auction 66. We are working closely with T-Mobile on its UMTS 3G plan, Leap Wireless and Metro PCS on their new market launches too. We anticipate that these advanced wire service licensee buildouts will result in an overall increase in lease signings in 2007 versus 2006. We anticipate that AWS network deployments will meaningfully impact commenced new business revenue at our company throughout the 2008 to 2010 time frame. In addition, clear wire is currently leasing substantial tower space as it uses its existing spectrum to broaden the geographic coverage of its service and Sprint Nextel in engaged with us in site level planning for its WiMax network trial markets as well.

We're also looking forward to the potential for additional tower demand, resulting from the upcoming 700 mHz spectrum auction. This high quality spectrum may be used by both incumbent carriers to extend their geographic coverage and by new entrants to deliver more advanced broadband or entertainment services. As all of these network deployments become more robust, carriers will be able to handle more high-speed traffic. And then as price points for wireless broadband service then moderate, we envision a virtuous cycle of increasing 3G penetration, with higher carrier revenues and then continued reinvestment in even more speed and capacity. While we expect this scenario to unfold over a number of years, we view wireless data and ultimately, mobile entertainment, to support continued growth in Tower revenue.

So now that Brad and I have had a chance to share some of the details of our first quarter performance and some of the highlights of how we view our future aspirations and opportunities, we'd be pleased to take your questions. Tandra, you can open it up now. Thank you.

Thank you. (OPERATOR INSTRUCTIONS). We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Michael Rollins.

Hi. Good morning. Just a couple quick questions. First on the international front, I guess if you go back a few months ago, it seemed like there might have been some opportunities that were a little bit nearer-term. I'm wondering where that stands today in terms of probabilities? Do you think we'll get something this year on the international front, or will it take more time to bake? Secondly, on the domestic business, if you look at the leasing that you've been doing with the national carriers, would you say now that all of them are signed up or renewed with master lease agreements, or are there more opportunities on that front to continue to deepen some of those ties post the SpectraSite merger? Thank you.

Good morning, Michael. On international, it's hard to project probabilities for timing, frankly. The Asian market, whether it's southeast Asia, or south Asia, the two places we've publicly discussed about looking into, are very dynamic right now. There's a lot of movement within the carriers, there's some M&A and change in ownership deals that have gone on recently. I feel that carriers are not yet certain for their own strategies for the Towers in Asia and we're working with them to try to come up with some creative ideas. So we are very committed still, very energized to make something work for both us and some of the major carriers in the Asian markets, but it's just difficult to project timing. On the domestic issue, we have with the great majority of our customers renegotiated master lease agreements. I guess the pivot point would be greater than five-year initial terms or existing terms. There's some more room to work there, but we've got most of it done.

If I could just follow-up, on the international point, are you reserving some balance sheet capacity to pursue international? And do you get to a point where you say, you know what, look at it carefully, nothing's really materialized. Would you take some of that capacity we were hoping to use internationally and bring it back domestically? Thanks.

Mike, the way we look at our flexibility and our balance sheet, it's broadly speaking whether it's international or domestic, we want to have the capacity to be able to be at strategic. Wherever the return is appropriate is where we would apply the capital rather than allocating it specifically pre the deal to either international or domestic.

Thanks.

Thanks.

Your next question comes from the line of Ric Prentiss.

Good morning, guys. A couple questions for you. First, the Devil Rays are in second place, that's not going to last. The first question I got for you, Brad. Let's talk a little bit about where your leverage is at right now given the transaction you did. What you feel as far as the relevant ranges as you look out, with what Jim was talking about. The visibility, maybe not just from 2008, but to 2010. And what other future financial instruments you might be looking at. You had talked about investment-grade desires.

Sure. Our leverage right now is surely below 4 full-times on a run rate basis. It will be moving up throughout the year as we continue to redo our repurchase activity under the existing $1.5 billion share repurchase program. Based on where you think our fourth quarter run rates would be, it would be over 4 times but probably below 4.5 times, what it would be implied based on our guidance. I think what you'll see us continue to do with the balance sheet is try to extend longer term debt, which would provide more foundation and more stability and more flexibility long-term. We would evaluate our share repurchase activity and the sizing of that in relation to what our strategic opportunities are, how our business is doing, and you did highlight that our business was in a good place, and ultimately a capital structure that we think makes sense long-term for the company at a reasonable cost. I think it's consistent with our prior statements on how we view this and we're beginning to execute it. The securitization was the first piece of the recapitalization and the next pieces should probably add on longer term debt. And that's really the direction we're going in.

Okay. Jim, you mentioned it's hard to predict timing for international projects. Is it any easier to predict timing of domestic portfolios coming out of the marketplace? T-Mobile's talked about actively -- they're considering it, but I'm not sure that a book's out yet.

With regard to the U.S., T-Mobile's parent, Deutsche Telekom, did make a public comment that the U.S. tower assets was one of a list of assets they would consider divesting. We would be interested, obviously, in reviewing those if and when they come on the market, but we don't have prior visibility anymore than that.

Okay. Final question for Brad, on the stock buyback, if I was reading it right, then on the new program, you guys have done close to $300 million, you've got $1.2 billion left, I guess. Does that imply almost $150 million a month worth of pace and is it on a 10B5 so where it's set in advance and you cannot really adjust it?

I think our numbers -- you're accurate in your estimate that it's probably in the ballpark of $150 million a month. You can adjust the 10B5, if we were using a 10B5 periodically, given certain windows that you're not allowed to adjust it, you can't. So I think we're common sense about this where we don't set a whole year's program, we generally set it in advance to be able to keep repurchasing through blackout periods, but we're kind of flexible -- we leave flexibility enough to adjust the program during the course of the year.

That quarterly instead of monthly or annually type thing, is that what we should expect?

I don't want to be more specific than my statement.

All right. Good luck, guys.

Thanks.

Your next question comes from the line of Brett Feldman.

Hey, guys. Thanks. In thinking about the balance sheet and capital returns, based on your goals you're laying out there, it sounds like you probably want to get the next phase of balance sheet work finished before you would have something incremental to say about capital returns beyond the current buyback? Is that the right way of thinking about it?

I think it is, Brett. We've got a decent amount of financing activity that we've done and a decent amount more to do over the next several quarters. So I think we want to go through our financing activity, want to maintain the capital structure we have, and we also want to assess what the other opportunities out there as we look at assets. We would update you when it's appropriate on any incremental share repurchase activity beyond the current plan we have in place.

Okay. Thinking about your business mix in terms of U.S. versus Latin America, what does that look like right now and what was the contribution in terms of incremental growth in the quarter?

The business mix is 87% U.S. and 13% international with Mexico being about 10% and Brazil being about 3% of that. The contribution to new business, it was primarily driven a little bit greater proportion than that by the U.S. The U.S. was over 90% of the new business.

Okay. Then you talked about the one-time items. Just to make sure I got it right. There was essentially $4 million of nonrecurring items because of the lease extensions in the quarter, and we're going to see that come back in the second quarter. Is that the right way?

that is correct. That's in comparison to the prior year, if you want sequentially, because people may ask, it was about $5 million on a sequential basis.

So $5 million of sequential growth was nonrun rate.

That's right.

And then the one last question, you talked about the day-one returns you're getting on your tower builds, what are the returns on land acquisitions looking like these days?

We've been hovering right around 10 times, is what we've been purchasing our land for. It's slightly over that. It's below 11. It's maybe in the mid10s.

Thanks, guys.

Our next question comes from the line of Anthony Klarman.

Thank you. A question first on pricing in the U.S. If you look at towers that have been built in the U.S. over the last 24 months versus the prior 24 months, there's actually been a scarcity of actual new physical structures built versus the prior two-year period. What implications has that had on pricing and are you still continuing to see pricing trends going higher, or are you using the size of your portfolio that you have at this point to put in more of a master lease type structure so that you can get more surety and bigger chunks of revenue all the while being willing to give some concessions in the way of price?

Anthony, it's Jim. The new build tower rate in the U.S. over the last few years has been relatively modest and even more so this year, as you said. So it really hasn't been a major affect on price, even during the time there was a little bit more building going on. As we've talked about in prior calls, the pricing structure by market tends to be set and is very stable based on the fact that you're normally competing against the carrier's own cost to build a tower versus leasing up on an existing site. Since those inputs, those cost inputs don't change that much for the carrier over time, pricing's been pretty stable for us. We try to, in our master lease agreements, achieve market pricing and volume commitments, and also get closer to our customers from a process and ease of doing business perspective and a volume perspective to try to maximize that revenue that you suggested.

Is that something akin to what you're doing with Clearwire, someone who needs a lot of sites quickly, or maybe Metro PCS or Leap are probably in that category was well?

We don't speak about individual customer contracts, but our strategy is to be the best operator from the customers' perspectives, quality of assets, speed of delivery of leases, getting them up on the tower relatively quickly. That's where we compete.

Okay. On the balance sheet, you have, Brad, a couple of deeply in the money converts at this point and one that's kind of getting relatively close. Would those also be things that you would consider using as part of the share buyback, or is the shire buyback really only something that you've targeted towards straight common shares?

Anthony, we've made a decent amount of progress on one of the most in the money converts. That's 3.25%. We've taken it down from $210 million to a little over $50 million is left. What we do is we induce conversion at a very MPV-positive rate for us and then we buy the shares in the open market. And that's been an efficient mechanism for us to effectively repurchase the converts over time. I would anticipate as we move forward in the future, probably would do some more inducements. The 5% converts that have a $50 strike price or so, I think it's $51.50, we have a call option already on that. So those we don't have to worry about them being dilutive at all.

Great, thank you.

Our next question comes from the line of Vance Edelson.

Thanks. Your EBITDA margins have been at the same high level for a year now, and I recognize there are some one-time expenses in there, but is there room for further margin expansion and what are your plans for increasing the margin above and beyond scale advantages.

Vance, I think when we gave guidance in November, we said that we increased our SG&A a little bit this year. I think we targeted between SG&A related to the operating units in corporate somewhere between 5 and $10 million. So the incremental revenue had an EBITDA impact of about 80% and a gross margin impact of about 90% flowthrough. That was for this year in 2007 as we were making investments in our business to better serve our customers and enhance our administrative infrastructure. In the future, we do anticipate 90% of incremental revenue should go to EBITDA, so as the revenue grows, that will increase the EBITDA margins. That's the best way to think about it, rather than to target 8% of absolute EBITDA margins, it's the incremental revenue that should flow through into EBITDA.

Okay, thanks. And on the timing of the stock option probe-related expense, is that now trending down, would you say?

It's trended down the last three quarters. Having said that, it's still at $2.8 million in the first quarter. It is unpredictable. Is $2.8 million going to be the second quarter? If the trend continues, that's probably not a bad number. What I would just caution you is that it's money that we keep spending as appropriate.

Okay, thanks, brad.

Your next question comes from the line of Tim Horan.

Hi, thanks a lot. A couple of questions. One is, with the extra cash you have from the securitization and also the $80 million tax refund, do you have any thoughts on doing anything like a tender or an accelerated stock buyback to accelerate the pace of your buybacks?

We take those into account in terms of when we raise the financing and how we deploy the capital and we can alter the pace of our buyback. Given the liquidity in our shares and how they trade daily, an accelerated share repurchase is something you probably don't need to do given the amounts we've just talked about. And that's the best way to think about it.

Okay. One other thing. It looks like the increase in the CapEx guidance is all from land repurchases. Can you confirm that and also maybe talk a little bit about that market. Is that market opening up? It seems that all companies in the industry are trying to buy back -- trying to buy land under their towers, but it's a relatively slow pace. Is there any acceleration you're seeing there?

The increase is due to a land repurchase increase activity. The market is one -- I'm not sure if it opens up, it's one that we've been targeting and whether we do it through lease extensions, which are not repurchases -- just extending the lease another 25 years or so -- or we buy the land, we just really try to have the maximum amount of flexibility with the underlying ground. That's how we think about it. We have a team that does a great job that's targeting bringing in the land under the towers or extending the leases. Either or, it's really an economic decision.

Okay. What percentage of the towers do you own your land under at this point?

15%.

does that include Mexico?

It does not.

Okay.

I'm sorry, it does, we do not own the land in Mexico or Brazil, so in the States, the percentage is higher, because none of the land is owned in Mexico or Brazil.

Thanks, Brad.

Your next question comes from the line of Jason Armstrong.

Thanks, good morning. Just one question following up on the comments you made in the remarks. Talk about a cycle of increasing 3G penetration, driving higher carrier revenues and ultimately driving continued reinvestment and more speed and capacity. I realize the comment are more forward looking, but are you starting to see that at all in some of the very early launch markets from the carriers? We've got some markets, EVDO or UMTS have been launching for two years and several carriers are talking about a high degree of success with the laptop card business. Just wondering if you're seeing the early signs of this cycle already in this markets where carriers are coming back to augment capacity on broadband networks?

It's Jim. It's very hard to break out. I'm not sure the carriers even try to do it as far as where their revenue comes from. The revenue growth of the industry drives a percentage of revenue, CapEx target that continues to therefore be supportable. So there's some revenue growth from voice penetration, there's some revenue growth from ARPU, there's revenue growth from data. All those things add together to support the financial health of the carriers, making them more comfortable to reinvest in data, and I think there are some success stories in data, but that encourages the reinvestment. I'm not sure they break out slices of research and target it right back to that original product.

Okay, thanks.

Sure.

Your next question comes from the line of Michael Weisberg.

Hi, there. I had a couple of quick questions. First, the tower cash flow numbers are after Azteca?

It includes Azteca.

Great. Maybe one for either one of you. Is there a way of quantifying the new business opportunities that you talk about from the carriers that should begin in earnest in '08. Is it sufficient -- do you think right now that you can see an increasing rate of tower revenue growth based on these new signings, or will it be really more sustaining the current level of very strong growth?

Assuming that the national carriers continue the kind of rates of growth they'd traditionally done over the last four or five years, the AWS spectrum and potentially and hopefully the 700 mHz spectrum should add some incremental commencement activity for the industry over the next two or three years.

Would that be sufficient -- the nominator is getting bigger every year. Do you think that would be sufficient, Jim, to increase the percentage rate of revenue growth?

The way we look at it Michael, is the absolute dollar value of new deals signed and commenced, will it keep up with the scale affect or not, that's to be determined.

But the absolute dollar --

Michael, when we guide 2008, you'll get your answer.

Okay, thank you very much. Two more, if I could. You gave fully diluted shares. What's the fully diluted using treasury method?

Fully diluted as of the quarter using the treasury method, the quarter end was 450 million. We did buy in, I think, through May 2. It's probably 446 million as of May 2.

But as March, it's 450 --

That's everything. Fully diluted, everything, converts converting.

Finally as a quickie, do you think Tom Brady, who's a smart knew something when he was wearing a Yankee hat a week ago? Do you think he knew about the Clemens thing and just wanted to get on board early with a winner? Or was there another factor?

Under the table payment is our theory.

All right.

Our next question comes from the line of David Barden.

Hello, guys. This is [Marcus Shaw] calling in for Dave Barden. Just a couple of questions. Number one, on the back of the success you saw on the CMPS fundraising. Do you guys have any incremental thoughts about doing some similar structure with some more towers?

Marcus, I think over time, you may see us securitize more assets. It probably will not be in the very near future, but it is a product that makes sense for a portion of the balance sheet. We think it's an efficient form of financing. You may see us take more towers and put it into a CMBS structure.

Cool. And second question, just in terms of the international investments, do you guys -- you kind of set up a drop dead date for which you'll say, we're no longer really considering these investments or a weighted scale on time in terms of looking at maybe putting the leverage to work for equity holders in some other fashion?

No drop dead date. Our core strategy, the first pillar of the strategy is to add meaningful sets of assets to the company, Marcus. We can't drive the other side of that deal as far as timing or place, necessarily, but that still remains our number one strategic pillar. So we're going to keep trying to do it. As time goes on, we continually reassess the availability of these assets. If they're less available in toto, we would fold that into our overall thinking on how we use our cash.

Thank you very much, guys.

Sure.

Thank you. Your final question comes from the line of Ric Prentiss.

Hey, guys. Two quick follow-ups for you. Jim, in your comments you mentioned how Clearwire was substantial leasing activity. If you look at Clearwire, this year's activity versus last year, is there a significant increase as to what Clearwire is doing this year?

I would say just on a qualitative basis, the answer to that is yes, Rick, more active this year. Very robust plan. I think they have excellent leadership and they are going about in a reasonable way, so we're happy to be supporting them.

But not tripling the efforts so far, look at their road show, they talked about 8 million pops going to 16 million pops this year.

You ought to talk to Clearwire about the specific buildout plans. Qualitatively, they're more active this year than last year.

Your own new builds, you said it was a slow start. You got, I think it was 22, out of your target of going for 200 this year. What's slowing down the start of the year? Was it just winter or what was it?

It was actually more of Latin America customer questions about speed and readiness to deploy some new sites. Nothing telling for the whole business, frankly.

Got you, Got you. Final question, since you're going really fast today. This is great.

I want to give you guys a lot of time to write your robust reports.

Industry consolidation, we've had most of it at the larger level, if there was a combination of Sprint Alltel, what impact would there be on you guys?

I don't know off the top of my head what the overlap would be between those two companies. My guess would be several hundred sites that they host directly on, so it would be less than Cingular or AWE, but there would be some impact. The towers we own from Alltel is about 1700 towers, so it would be some subset of that, would be the probable impact, assuming that there was rationalization, which there may or may not be.

I would expect if that did happen, it would be probably much less than Cingular/AT&T, because Alltel is more rural than Sprint probably was.

I think that is a correct statement.

Good luck, guys.

Thanks, everybody, for being on the call.

Have a good week, bye, now, and Tandra, you can wrap it up.

This concludes today's conference call. You may disconnect at this time.