Crown Castle Inc. · NYSE:CCI
Crown Castle — Crown Castle International — Investor Day (2003)
36 slides from Crown Castle's investor day presentation, 2003
Slide 1: Crown Castle UK
Crown Castle UK Peter Abery President & Managing Director
Slide 2: Where in the world: UK and US comparison
Where Where in in the the world world … … United Kingdom Pop. 60 million Pop. Growth: 0.4% Mobile phone penetration: 84% Land area: 244,100 sq km GDP: US$1.4trn United States of America Pop. 280 million Pop. Growth: 1.1% Mobile phone penetration: 49% Land area: 9.37m sq km GDP: US$10.44trn shaping t
Slide 3: Slide 3
Slide 4: Agenda
Agenda Agenda § CCUK Regional Contribution and Business Overview § United Kingdom Mobile and Broadcast markets § History, Growth and Financials of Crown Castle UK shaping the wireless world SM 4
Slide 5: CCIC Annual Recurring Revenue
CCIC CCIC Annual Annual Recurring Recurring Revenue* Revenue* AUS 3% $24MM UK 36% $260MM US 61% $432MM *LQA Site Rental Revenue shaping the wireless world SM 5
Slide 6: CCUK Business Overview
CCUK CCUK Business Business Overview Overview § Three revenue segments 2002 Divisional Revenue Split • Broadcasting transmission • Site share rentals • Services Services 21% Broadcast 39% § Year-end 2002 summary data • Towers: 3,397 Site Rental • Revenues: £199MM 40% • Recurring Gross Margin: 51% sh
Slide 7: UK Mobile and Broadcast Markets
UK Mobile and Broadcast Markets shaping the wireless world SM 7
Slide 8: Overview of UK Wireless Market
Overview Overview of of UK UK Wireless Wireless Market Market Total UK POPs: 60MM § 60 MM POPs with 84% penetration at Wireless subs and penetration2 YE 2002 Subs Pentration 70 120% • 69% of subscribers are pre-paid 99% 96% 97% • Calling party pays (CPP) rules apply 60 91% 93% 95% 100% 88% 84% 50 79
Slide 9: Spectrum Allocations for the UK
Spectrum Spectrum Allocations Allocations for for the the UK UK Carrier Spectrum Amount of Spectrum Vodafone GSM 900 25 MHz GSM 1800 23 MHz WCDMA (FDD) 30 MHz O2 GSM 900 25 MHz GSM 1800 23 MHz WCDMA (FDD/TDD) 25 MHz Orange GSM 1800 60 MHz WCDMA (FDD/TDD) 25 MHz T-Mobile GSM 1800 60 MHz WCDMA (FDD/TD
Slide 10: 2G Market Growth in the UK
2G 2G Market Market Growth Growth in in the the UK UK 2G Market Growth in the UK 1998 1999 2000 2001 2002 Total Number of Subscribers (MM) 13 24 40 45 51 Percentage Increase over previous year 84% 67% 12% 13% Penetration as Proportion of Population 22% 40% 67% 75% 85% shaping the wireless world SM 1
Slide 11: UMTS (3G) Service in the UK
UMTS UMTS (3G) (3G) Service Service in in the the UK UK Customer Expected Launch Date Hutchison Q2 2003 Vodafone Q4 2003 Orange 1H 2004 T-Mobile 1H 2004 O2 2H 2004 shaping the wireless world SM 11
Slide 12: Overview of UK Broadcast Industry
Overview Overview of of UK UK Broadcast Broadcast Industry Industry Terrestrial § Near universal household coverage (99.4%) § Only 5 channels Satellite § Over 6.5MM subscribers § BSkyB is sole UK satellite broadcaster Cable § Over 2MM subscribers § Key UK operators: NTL and TeleWest shaping the wire
Slide 13: Digital Terrestrial Television (DTT)
Digital Digital Terrestrial Terrestrial Television Television (DTT) (DTT) § Launched service in 1998 § Available with the purchase of a set-top box § Government initially allocated six multiplexes • 2 1/2 for incumbent terrestrial broadcasters (BBC, ITV, Channels 4&5) • 3 awarded to ITV Digital • 1/
Slide 14: History and Growth of CCUK
History and Growth of CCUK shaping the wireless world SM 14
Slide 15: Portfolio Development
Portfolio Portfolio Development Development Acquired § 1997 Acquired BBC transmission 3,397 Built infrastructure (720 towers) 3,087 Beginning Towers § 1999 Purchased 1,676 sites from 2,330 One 2 One (T-Mobile) 2,071 § 2000 Acquired 425 sites and right to utilize rooftops on 4,000 British Telecom exc
Slide 16: Our Transmission Network Assets
l l Our Our Transmission Transmission Network Network Assets Assets l l l l lll l l § 754 Crown Castle broadcast sites l l l l l l l l l l l l l ll § ll l l 2,196 UHF TV transmitters l l lll ll l ll lll l l ll l l lll l l l l l l l ll l l l l l l l l ll l l l ll § ll 1,242 Analogue Radio transmitter
Slide 17: Broadcast Towers
Broadcast Broadcast Towers Towers Eiffel Tower 324mtrs Mendip, Waltham and Bilsdale 304mtrs Holme Moss 225mtrs Crystal Palace 199mtrs Alexandra Palace 65mtrs shaping the wireless world SM 17
Slide 18: Growing Recurring Revenue
Growing Recurring Revenue Broadcast Site Rental 1999 – 2002 Recurring Revenue* Growth of £58.3 million, a 16% CAGR £91,800* § Broadcast Transmission Growth related to new contracts £76,800 £72,800 • Freeview • BBC DAB • On-Digital £29,500 § Wireless Site Rental Revenue Growth • Co-location and new d
Slide 19: CCUK Q4 '02 Recurring Revenues
CCUK CCUK Q4 Q4 ’02 ’02 Recurring Recurring Revenues Revenues Other 13% BT Airwave 2% O2 5% Orange 4% BBC 45% H3G 7% Vodafone 4% NTL 8% T-Mobile BSkyB 9% 3% Broadcast represents 54% of Total 2002 CCUK Recurring Revenues shaping the wireless world SM 19
Slide 20: Total CCUK Recurring Gross Margin
Total Total CCUK CCUK Recurring Recurring Gross Gross Margin Margin £90.9 12% CAGR Total Gross Margin £65.0 1999 2002 in millions, assumes FX rate of 1.55 USD to 1 GBP shaping the wireless world SM 20
Slide 21: Our Customer Base - 2001
Our Our Customer Customer Base Base –– 2001 2001 shaping the wireless world SM 21
Slide 22: Growing Our Customer Base - 2003
Growing Growing Our Our Customer Customer Base Base –– 2003 2003 shaping the wireless world SM 22
Slide 23: Staffing and Locations
Staffing Staffing and and Locations Locations § 690 staff Edinburgh • 338 Staff based in Warwick • 236 staff based in 6 Regional Offices Manchester • 164 staff working from team bases Birmingham • Average length of service: 8.7 years • Longest Length of service: 39 years London Warwick § 31 location
Slide 24: Key Achievements in CCUK in 2002
Key Key Achievements Achievements in in CCUK CCUK in in 2002 2002 • Replacement of ITV Digital with Freeview 12 year Mux licenses & contracts • Strong tenant leasing growth • Significant one-off and recurring cost savings • Reorganisation of management structure and reduction in staff • Project Mana
Slide 25: CCUK 2003 - Top Objectives
CCUK CCUK 2003 2003 -- Top Top 10 10 Objectives Objectives • Achieve/exceed each quarter 2003 Budget EBITDA, Cash Flow and Working Capital targets • Know and meet our customers’ needs, requirements and expectations – make CCUK easy to do business with • Achieve/exceed our operational targets and obj
Slide 26: 2003 Challenge
2003 2003 Challenge Challenge § No surprises; no excuses • Hit our targets: Operational and financial § Do this every quarter shaping the wireless world SM 26
Slide 27: Appendix
Appendix shaping the wireless world SM 27
Slide 28: Company History/Key Acquisitions
Company Company History/Key History/Key Acquisitions Acquisitions 1997 Acquired BBC transmission infrastructure (720 towers) 1998 BBC/ITVD award DTT contracts for 12-year term 1998 Acquired Millennium Communications (102 towers) 1999 Purchased 1,676 sites from One 2 One (T-Mobile) 2000 Acquired 425
Slide 29: Revenue Growth
Revenue Growth (Amounts in £K.) 225,000 199,917 200,000 175,000 165,016 43,602 21% 150,000 143,798 22,270 growth Revenue 16,809 119,731 (£K) 125,000 13,417 84,342 93,657 100,000 86,109 75,363 83,384 75,000 76,777 50,000 72,973 25,000 56,636 43,605 29,537 0 1997 1998 1999 2000 2001 2002 TOTAL Site Re
Slide 30: CCUK Capital Expenditure (£m)
CCUK CCUK Capital Capital Expenditure Expenditure (£m) (£m) 1998 1999 2000 2001 2002 Total T Mobile NI - - £3.5 £14.8 £8.2 £26.5 DTT £49.6 £45.0 £7.1 £8.8 £1.5 £112.0 Site Acquisition £1.3 £1.0 £1.3 £2.9 £2.5 £9.0 BT Reach - - - £79.6 £67.3 £146.8 Site Development £3.7 £5.6 £12.8 £19.3 £22.8 £64.2 O
Slide 31: UK DTV Market Share & Forecast Growth
UK UK DTV DTV Market Market Share Share & & Forecast Forecast Growth Growth Summary of UK Digital TV Market at January 2003 Platform Forecast Subscriber Market Share in Coverage No. of Subscribers Stability Numbers 2010 2010 Penetration % - TV No. Households % of Digital Rate of churn Platform Type
Slide 32: Operator Revenue Performance - Key Metrics
Operator Operator Revenue Revenue Performance Performance –– Key Key Metrics Metrics Operator Turnover Profitability Blended ARPU* (£m) (£m) (£m) Vodafone UK 3,753 1,290 21.9 Orange UK 3,964 1,198 21.3 O2 UK 2,749 -854 19.9 T-Mobile UK 2,058 -706 18.6 UK Market 12,524 NA NA * Blended Average Revenue
Slide 33: Mobile Operator Status
Mobile Mobile Operator Operator Status Status Population Operator Ownership Listing Coverage Vodafone Vodafone UK Limited LSE/Frankfurt/NYSE 99% UK Orange UK France Telecom (86%), Shares (13%), Paris SE 99% Employees (1%) O2 UK MMO2 LSE/NYSE 99% T-Mobile UK Deutsche Telecom Germany/Tokyo/NYSE 99% sh
Slide 34: BT Reach Site - Staines GSC
BT BT Reach Reach Site Site –– Staines Staines GSC GSC § BT Reach TE – drawn down December 2002 § Existing 02 & Dolphin site - existing rentals £12k § H3G THS install December 2002 rental 26k – install costs 103k sales 113k § £100k draw down + £16,7k capex § Revenue £26k = £15.2k EBITDA = 15.2% retu
Slide 35: BT Reach Site - Mayfair TE
BT BT Reach Reach Site Site -- Mayfair Mayfair TE TE § BT reach site ‘drawn down’ June 2002 § Existing 02 tenant £13.2k rental – bought in rental § Installed H3G with a ‘bespoke’ GRP design – this design is cited by the local planning authority as an example of design standards! • Install costs £91k
Slide 36: Overview of UK Broadcast Industry
Overview Overview of of UK UK Broadcast Broadcast Industry Industry Terrestrial Digital Terrestrial Television (DTT) § Launched service in 1998 on both terrestrial and § Most widely adopted satellite networks § Near universal household coverage (99.4%) § 25MM households attracting over 80% of viewin