Crown Castle Inc. · NYSE:CCI
Crown Castle — Crown Castle International — Investor Day (2004)
51 slides from Crown Castle's investor day presentation, 2004
Slide 1: US Operational Overview
US Operational Overview Ed Wallander President & COO, CCUSA Jed Fawaz VP Operations Support & Technology, CCUSA
Slide 2: CCUSA Overview
CCUSA Overview • CCUSA team • Current tenant lease activity • Sources of future leasing • Potential impact of consolidation
Slide 3: CCUSA Team - Areas
CCUSA Team -Areas Bob BobAckerman Ackerman Northeast NortheastArea Area Dave DaveTanczos Tanczos President President Great Great LakesArea Lakes Area Larry LarryHughes Hughes President President West Area West Area NORTHEAST President President AREA GREAT LAKES WEST AREA AREA Chris CENTRAL ChrisTret
Slide 4: CCUSA Team - Functions
CCUSA Team - Functions Jed JedFawaz Fawaz Kellie KellieRogers Rogers Jennifer JenniferWallace Wallace Vice VicePresident President Vice VicePresident President Vice VicePresident President Operations OperationsSupport Support Finance Finance Human HumanCapital Capital &&Technology Technology Barclay
Slide 5: Increasing Tower Leasing Activity
Increasing Tower Leasing Activity • Site inquiries • Carrier search rings • Applications for our sites • New rental revenue from signed leases
Slide 6: Total Wireless MOU's
Total Wireless MOU’s Jun-03 Dec-02 Jun-02 Dec-01 Jun-01 Dec-00 Jun-00 Wireless MOU’s doubled Dec-99 from June ’01 to June ‘03 Jun-99 Dec-98 Jun-98 Dec-97 Jun-97 Dec-96 Jun-96 Dec-95 Jun-95 Dec-94 Jun-94 Dec-93 Source: CTIA Jun-93 Dec-92 Jun-92 - 400 300 200 100 MOUs (in billions)
Slide 7: Monthly MOU's Per Subscriber
Monthly MOU’s Per Subscriber 468 427 Wireless MOU’s per Subscriber 380 398 increased 50% from June ’01 to June ‘03 314 255 221 185 156 140 136 121 127 119 125 115 119 119 108 117 117 Jun-93 Dec-93 Jun-94 Dec-94 Jun-95 Dec-95 Jun-96 Dec-96 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-0
Slide 8: Importance of Network Quality
Importance of Network Quality REASON CHOOSE PROVIDER REASON SWITCHED PROVIDER Good Good 20% 18% Coverage Coverage Promo / Sale 18% Price Plan 17% Recommended 8% Promo / Sale 12% Price 8% Customer 9% Service Group plan 5% Recommended 5% Source: Telephia 2001; n = 50,000 for choose and 9,500 for switc
Slide 9: Increase in Search Rings
Increase in Search Rings 10,000 Carrier Search Rings Received in Crown Markets 5,000 0 AUG '03 SEP '03 OCT '03 NOV '03 DEC '03 JAN '04 FEB '04 MAR '04 APR '04
Slide 10: Signed Tower Leases
Signed Tower Leases Monthly Revenue $900 Executed License Revenue ($000) $700 $500 $300 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04E
Slide 11: The Future
The Future • Leasing impact as voice networks improve and wireless data emerges • “The Shrinking Cell” Pattern • Case Study: A single U.S. Market • Observations from high speed wireless networks •GPRS, EDGE, EVDO, WCDMA • Lines and Antennas • Ground Equipment
Slide 12: Wireless Data
Wireless Data relation to cell site density… BPS 2 K 12. 144 KBPS 384 KBPS (Increases in bits/HZ throughput require a better quality radio channel.)
Slide 13: The Shrinking Cell
The Shrinking Cell Geographic Coverage : Voice Concept Source: Wireless Networks McGraw-Hill Telecom
Slide 14: The Shrinking Cell
The Shrinking Cell Geographic Coverage: Add Data Concept Source: Wireless Networks McGraw-Hill Telecom
Slide 15: The Shrinking Cell
The Shrinking Cell Geographic Coverage: Add Cell Sites Concept Source: Wireless Networks McGraw-Hill Telecom
Slide 16: Antenna Systems
Antenna Systems “A lesson learned with IS-95 (CDMA) deployment into an Advanced Mobile Phone System (AMPS) environment is that for performance and optimization reasons, a set of separate antennas should be sought where possible. It is not that the technologies cannot share the same antenna but that
Slide 17: Case Study: Atlanta Market
Case Study: Atlanta Market • POPs: Total 3,991,303 • Area/Location: 4,384 sq mi. • Spectrum license holders: y AT&T Wireless 10 MHz y Cingular 25 MHz y Metro PCS 20 MHz y Nextwave 10 MHz y Sprint PCS 20 MHz y Verizon 35 MHz
Slide 18: Case Study: Atlanta Market
Case Study: Atlanta Market Breakdown by Tower Location and Type Rural Guyed 5% Self 3% Support Major 26% Road Urban Corridor 39% 29% Interstate Monopole Corridor 71% 27% CCI Total Atlanta Towers: 301
Slide 19: Case Study: Atlanta Market
Case Study: Atlanta Market Financial Summary of the Atlanta Market Average tenants per tower 2.46 Site Rental Revenue / Tower $41,600 Operating Expense / Tower $13,700 Gross Margin / Tower $27,900 67% *$ Q4 ’03 Annualized
Slide 20: Atlanta Market Carrier X Current Coverage
Atlanta Market Carrier X Current Coverage “Best in Market”
Slide 21: Atlanta Market Carrier X Migrating to 2.5G
Atlanta Market Carrier X Migrating to 2.5G (-70Db)
Slide 22: Atlanta Market Carrier X Best in Market
Atlanta Market Carrier X “Best in Market"
Slide 23: Atlanta Market Carrier Y Subpar Voice Network
Atlanta Market Carrier Y Subpar Voice Network
Slide 24: Atlanta Market Carrier Y CCI Leasing Opportunities
Atlanta Market Carrier Y CCI Leasing Opportunities
Slide 25: Atlanta Market 2001 Revenue per Site
Atlanta Market 2001 Revenue per Site
Slide 26: Atlanta Market Q4 2003 Revenue per Site
Atlanta Market Q4 2003 Revenue per Site
Slide 27: Atlanta Market All Carriers move to 2.5G
Atlanta Market All Carriers move to 2.5G
Slide 28: U.S. Market: Breakdown by Tower Location and Type
U.S. Market Breakdown by Tower Location and Type Rural Guyed 10% Urban 20% 20% Self Support 44% Major Road Interstate Corridor Corridor 40% 30% Monopole 36% CCI Total US Towers: 10,642 70% in Top 100 BTA’s
Slide 29: U.S. Market Financial Summary
U.S. Market Financial Summary of the US Market Average tenants per tower 2.41 Site Rental Revenue / Tower $42,300 Operating Expense / Tower $13,600 Gross Margin / Tower $28,700 67.8% *$ Q4 ’03 Annualized
Slide 30: US Market 2001 Annual Revenue per Site
US Market 2001 Annual Revenue per Site of $27,800
Slide 31: US Market Annual Revenue Per Site Increase
US Market Annual Revenue Per Site Increase of $14,400 from 2001 to $42,300 in Q4 2003
Slide 32: US Market Current RF Measured Need for Voice
US Market Current RF Measured Need for Voice Represents $11,400 of Add’l Revenue per Tower for a total of $53,700
Slide 33: Potential Revenue Per Site with Data
Potential Revenue Per Site with Data Breakdown of Towers by Annual Revenue $27,800 $42,300 $53,700 $73,400 Rev / Twr Rev / Twr Rev / Twr Rev / Twr 100% $90,000+ $72,000- $90,000 $54,000- $72,000 50% $36,000- $54,000 $18,000- $36,000 $0-$18,000 0% Jan-01 Current Potential Revenue Potential Revenue Im
Slide 34: Observations and Examples
Observations and Examples Project Southpointe • Used in discussions with all of our major carrier customers • Helps to improve customer relationships and to increase new leases • Enables CCUSA to focus and prepare resources on the areas where the carrier demand is located
Slide 35: Consolidation Considerations
Consolidation Considerations • Spectrum - 850 Mhz vs. 1900 Mhz • Existing lease terms • Compatibility of technology • Network quality • Voice MOU’s • Data deployment • Timing
Slide 36: Cingular 800 MHz Footprint
Cingular 800 MHz Footprint Cingular Wireless Licensed Areas Ee] 800 MHz Areas
Slide 37: Cingular 800 & 1900 MHz Footprint
Cingular 800 & 1900 MHz Footprint
Slide 38: Cingular 800 & 1900 MHz Footprint with Overlap
Cingular 800 & 1900 MHz Footprint with Overlap
Slide 39: AT&T 800 MHz Footprint
AT&T 800 MHz Footprint AT&T Wireless Licensed Areas || 800 MHz Areas
Slide 40: AT&T 800 & 1900 MHz Footprint
AT&T 800 & 1900 MHz Footprint AT&T Wireless Licensed Areas | | 800 MHz Areas 1900 MHz Areas
Slide 41: AT&T 800 & 1900 MHz Footprint with Overlap
AT&T 800 & 1900 MHz Footprint with Overlap
Slide 42: Cingular & AT&T 800 MHz Footprint with Overlap
Cingular & AT&T 800 MHz Footprint with Overlap
Slide 43: Cingular / AWS Impact
es SS } _ ; —_ a \ Cingular / AWS Impact Total Spectrum 800 & 1900 with NextWave Purchase = 10to 20 20to 30 30to 40 40to 50 SO to 60 60 to 70 7Oto 90 90 to 120
Slide 44: Cingular / AWS Impact
tf Cingular / AWS Impact Total Spectrum 800 & 1900 with NextWave Purchase 10 to 20 20to 30 30to 40 40 to 50 M@ 50to 60 @ 60to 70 HM 70to 90 1914 HM 90to120 10 @ Sites with AWS & Cingular in high spectrum areas (201)
Slide 45: Site Classification
Site Classification LAND USE METHODOLOGY Road Category & Daytime Population Density Categories Land Use Categories Road Category Major Hwy Major Road Minor Road Daytime Pop Density (>2500 per SM) LUC -3 (150 - 2500 per SM) (<150 per SM) CROWN | mere
Slide 46: AT&T-Cingular Analysis Revenue Impact
AT&T-Cingular Analysis Revenue Impact Land Use Category Co-existing Annual Revenue 1 $1.2M 2 $5.6M 3 $10.4M 4 $10.4M 5 $5.7M Total $33.3M ½ of LUC-4 and 5 co-existing annual revenue is $8.0M or 1% of 2004E Consolidated Tower Revenue
Slide 47: Network Quality
Network Quality Different Base station Equipment Cingular AT&T Merger – Overlapping Market Footprints - Need to consolidate base station technology within market CINGULAR AT&T WIRELESS TDMA/GSM Tx Rx Tx Rx Ericsson MTSO Rx Tx Rx Tx T1’s Lucent Lucent Ericsson Ericsson Base Basestation Base station B
Slide 48: Network Quality
Network Quality Cingular AT&T Merger MTSO MTSO MTSO MTSO
Slide 49: Network Quality
Network Quality Combining Two Complex Networks Will Be Logistically Challenging
Slide 50: Summary
Summary • We have a seasoned team to deliver results • Current leasing volumes are up 25% from 2003 • Future leasing scenarios for voice are very promising • We believe impact from data could be significant • Consolidation not expected to materially impact U.S. operations
Slide 51: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements that are based on management’s current expectations. Such statements include, but are not limited to, plans, projections, and estimates regarding: (i) the impact and effect of wireless carrier consolidation, (ii) leasi