American Tower Corporation (AMT) Management Presents at J.P. Morgan 47th Annual Global Technology, Media and Communications Conference (Transcript)

About: American Tower Corporation (REIT) (AMT)
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American Tower Corporation (NYSE:AMT) J.P. Morgan 47th Annual Global Technology, Media and Communications Conference May 14, 2019 11:20 AM ET

Company Participants

Tom Bartlett - Executive Vice President and Chief Financial Officer

Conference Call Participants

Phil Cusick - JPMorgan

Phil Cusick

All right. My name is Phil Cusick I cover the Communications Services and Infrastructure space at JPMorgan. I want to welcome Tom Bartlett, the CFO of American Tower. Tom, thank you for spending time with us today.

Tom Bartlett

Great to be here.

Phil Cusick

Let's start with the U.S. business. We're seeing healthy activity with solid growth from the Big Four. Do you think - do you think the activity can continue at these levels for the near to the medium term? How do you view the overall health of the industry?

Tom Bartlett

Well I mean, I think Phil it's very strong. We're kind of in a - if you go back and take the last 10 years and if you ask me the same question, I probably would've said the same thing. And if you take a look at the 10 years growth it's been quite solid growth for us. And so, I think that we're in kind of an interesting cycle right now.

We're looking - I think the carriers are kind of looking at, 40% more demand on their networks, if you take a look at what our usage is per smartphone versus even what it was two or three years ago and what we would expect to see it over the next three to five years, today I think we're in kind of the seven gig per month range. And that was probably two a few years ago.

And particularly if you're looking at your family plans and if you have a lot of kids you see that it's creeping up pretty significantly and as a result of the ceiling's coming off on limit, that's impacting the overall usage.

And so kind of all feeds into that 30% to 40% kind of incremental demand being placed on the networks. And I think 5G is right at our doorstep. We're starting to see some of the signs of 5G as we speak. And I think there's obviously a lot of runway relative to 5G over the next several years.

You're looking at new spectrum coming into the marketplace, which I think will be particularly interesting, particularly in the mid tier, kind of in that 3 to 4 band, 3 to 4 gigs band I think it's going to be quite interesting for us.

And so you kind of put that all into the mixture and the carriers are investing heavily into the networks to be able to support and get ready for all of those phenomenons and spending upwards of $30 billion in the United States market.

For us we're being a global business. We have probably in our markets that we serve probably about our customers spending about $50 billion on that. And so for us when we take a look at the growth rate from an American Tower perspective, I think that we feel quite good about the overall growth.

We're coming off of a strong first quarter, actually a strong 2018, particularly towards the end of the year we were, 8% kind of growth rate and feeding into then over an 8% growth rate in Q1.

So, I'm - we're very optimistic obviously on it and I think if you're a believer in broadband wireless globally I think the kind of real estate that we have and the assets that we have make a lot of sense for you.

Phil Cusick

Have you been surprised by the strength in the U.S.? It was just a year ago here that Tom said we probably don't get back to that 8%. And then here we are in the first quarter.

Tom Bartlett

Jim said that, I didn't.

Phil Cusick

Sorry, Jim.

Tom Bartlett

Well, it's really hard to predict that particular growth rate. We continue to be a bigger business. And so we've got to run faster to be able to get that - that kind of growth.

I think what continues to amaze me and I've been in the wireless business, for as long as you have, 20 years - 25 years and it continues to amaze me. The amount of new applications that continue to get written to the category, the usage, the streaming, the technology, the capability, the banding of bands, spectrum bands and so that becomes a little bit easier for the carriers to be able to deploy.

And so I think that it continues to kind of feed into the rate of growth. Clearly FirstNet where we are with FirstNet, I think has been - has played a role in some of the growth. We're seeing amendment pricing up in the kind of $800 to $900, $900 range.

So we've been in that. We kind of target in that - kind of 6% to 8% kind of growth rate. And the last two quarters have been in the 8%. Candidly I think first quarter 8.2% is going to be kind of a high watermark for us this year; I think it will pale down from a guidance perspective we said for the year we're in kind of that 7% kind of range.

But, time will tell. We'll see what the deployment looks like, how aggressive the carriers will be. They're all trying to keep pace with the rate of growth that each one of us and our families are using on our device set. And it's complicated, it's hard for the carriers to do that, but they're all smart guys and spending a lot of capital on it and is being kind of a passive real estate company as we are we're taking advantage of it.

Phil Cusick

Are you seeing slower activity levels or it's just a tougher comp…?

Tom Bartlett

It's really a tougher comp. I mean we expect actually 2019 to be another record year for us in terms of new business that's contributing to our organic growth rates. But it really is -- you go into the latter half of last year, some sizable growth in those quarters and so it's a bit of a - in the U.S. business it's a bit of a tough comp for us.

Phil Cusick

Okay. It's worth covering just Sprint, T-Mobile quickly. How do you - how would you be impacted, how do you think about that both on the short term and long term impact?

Tom Bartlett

Yes I mean, from a metric standpoint, we've talked about this for some time now, T-Mobile and Sprint represent probably 10%, 8% and 8% of our revenue. They're supporting 100 million customers. Their contracts with us are up in kind of two to three year range to go.

We have not seen anything that would be at this type of scale candidly, but what we have seen in the M&A environment is that it's complex. I mean, these guys are really smart, so they'll be able to do it. It's not going to happen overnight, but to be able to change out networks like that, to be able to service 100 million customers, as well as being able to support 5G new technology types of service offerings is not going to be an easy task.

And so, from our standpoint seeing both of them together, we want to work closely with them to try to create a win-win solution out of it. But we would expect it probably out of the gate, there could be even more build. What we've seen from an M&A perspective before you can take down a platform from a given site and by the way that I think the overlap is roughly 4% of our revenue. So that's where on a particular tower you would have both a Sprint platform and a T-Mobile platform.

But before you can actually take down a platform you need to have enough infrastructure on that particular tower to be able to support all the customers in that geographic footprint. So generally what we've seen on M&A types of transactions is a period of overbuild, more infrastructure going on to a particular site because you're not going to want to take that other site down unless they have enough infrastructure there to be able to support the needs of their customers.

So it's going to be a multi-year I'm sure type of an event to the extent that the deal closes. And so, from our perspective we're really agnostic to whether it happens or it doesn't happen. If it does happen, sure over a period of time there might be some periods where there could be some bumpy roads, some churn there.

But what we've done historically, you look at back at the Sprint, Nextel transaction when they were kind of rolling out the push to talk product on the Sprint network, we were able to work with them I think quite well in terms of mitigating what the overall churn expectations or churn would be in that particular period of time. And so hopefully we'll be able to just sit down with them and work through what their plans are such that they're able to accomplish what they're looking to do.

Phil Cusick

Okay. You mentioned 5G and every carrier has their own definition of 5G and their own business model. Talk about if not the carriers than the different models of 5G and how they impact you both near-term and sort of long term?

Tom Bartlett

Well, 5G is a technology where it's not just all about speed. when you think about 2G, 3G, 4G it was largely about speed, it was largely about spectral efficiency, 5G from my own layman's perspective, I'm an engineer, I'm pretty -- for much of a layman when you're really talking about 5G types of services. But it's not just about faster speeds, it's a lot about latency.

And so everyone is going to enjoy the faster speeds and so there's going to be more streaming, there is going to be more HD, there's going to be more stress on the network itself which we think will help drive more the need for infrastructure being placed on the networks themselves.

The latency is kind of at least from my own perspective is what is probably the most interesting element of it, because I think that then opens itself up to a number of new use cases which are in their infancy, but there is a lot of dialogue going around it. And that's what could provide some as I said some interesting growth for us going forward.

And so, we have a number of different projects going on if you will, just trying to understand some of the implications of this, edge computing is one. Edge computing is part of a work stream that we have within our kind of our advanced network services and we're probably three years away from edge computing at the cell site level at the end of the day.

But when you think about a - the way we think about a cell site, the kind of a futuristic cell site, I mean, it’s got power, it's got backhaul because we're providing backhaul, either through microwave or through fiber, running through the site. But we also think that there is going to be an edge compute capability of that particular site.

And for a number of reasons we think that there are a number of customers, a number of carriers, a number of service providers that might be interested in that kind of capability. And so, we have a number of trials going out at our sites themselves.

One that we have down in Jacksonville is that we actually have built a module. It's kind of a 20 foot by 20 foot module and it's providing an on ramp to the cloud for wireline customers, not for wireless, but it's providing a capability into a small midsize type of a customer.

And it was probably filled up within two weeks. And they're just racks in there that we're providing and we can - we picked up a co-location center in Atlanta not too long ago, which does have an on ramp to the cloud. And so we can now see where we might be able to position ourselves in this new edge compute type of facility.

Have no idea how this is going to pan out, as I said kind of in our innovation lab. But that's one of the areas that may be fruitful for us and we're trying to get just smarter about being able to ask the right questions. I mean, we’re an infrastructure company. But we want to be able to approach the Amazons, the Equinixs they are our own customer, existing customers and we want to be smarter about how we might be able to participate in what this future of 5G might look.

Whether it's on driverless cars or whether it's on drones. There are so many different use cases that are interesting to us. And as I said, we have no idea how they're - what the timing might be in terms of their delivery or when they may take off, when we may generate a dollar of revenue from them.

But we're trying to leverage the exclusive real estate that we have and that's our model. We scale exclusive pieces of real estate and so we have 40,000 exclusive pieces of real estate within the United States that we think that we can further leverage.

Phil Cusick

So one of the guys from I think it’s Packet is your partner on the datacenter side, will be here on Thursday on one of the panels to talk about that. Can you dig more into those innovation sort of engines? Jim was here last year and he talked about drone efforts and things like that that he's excited about. What other on the new business side are you sort of working on?

Tom Bartlett

Well, we kind of have three work streams in terms of how we're organized. The advanced network services that fits the technology that we were just talking about, it's IoT or whether it's edge computing, those would be the types of applications that we would think within that work stream.

We have another work stream that we call next generation connectivity. And for us in that particular work stream it's all about in-building. So it's being able to provide a neutral host into a series of facilities if you will, perhaps taking advantage of some of the unlicensed spectrum or even some of the three band, three or four band license spectrum.

We have probably the largest desk network in the United States, we provide 300 or 400 venues desk network and distributed antenna system networks where we provide in-building and it's largely a mall or it could be a sporting venue or race-track where we're - where again it's exclusive real estate, it's ours. We have the relationship with the single landlord and we're putting the network in place by which then we provide it to as many people who are interested in participating.

And on our indoor DAS, as what we call it, we probably have tenancy in the - on a node basis, probably two tenants per node. But we're able to generate tower-like returns.

So what we're trying to do is we're trying to expand that capability. So right now, we're channeling towards about 5,000 buildings around the country. We're trying to create a neutral host capability where it will be easier for customers to come in, and we can open up that 5,000 to roughly 20,000 buildings, venues, high-rise buildings across the United States.

And so something again we can create exclusivity around and something that will be easier to us to scale. So that would be an example on the kind of the next generation connectivity if you will.

The other is outside of the United States, different than in the United States where we have been able to put our hands on exclusive piece of real estate in major metropolitan areas. So whether it's Sao Paolo, whether it's Mexico City, whether it's Monterrey, we've been able to assemble sites and they're not 150 foot site, but maybe they're 10 meter sites, 15 meters sites, 50 feet kind of a range. For example in Mexico City we have about - or in Monterrey, Guadalajara we have 50,000 of these sites.

And so now we have exclusive pieces of real estate. And in those transactions where we obtain that we also picked up some fiber. So we're using that fiber to bring to the tower. But we're also trying to see what kind of an opportunity we might be able to string together with the site exclusivity we have to provide a new solution or more densification to the customers in those particular markets.

So again it fits into the kind of the innovation lab. We have different strategies in each of the different markets testing to see which might prove to be successful, but it's all based upon again exclusive pieces of real estate which in the outdoor small cell environment in the United States is very, very difficult if not impossible to obtain.

Phil Cusick

Is that because you've sort of waited so long to get into it or it's not attractive now, it wasn't attractive then?

Tom Bartlett

No, I mean some of the initial small cell venues that are trading today were ones that we created. I mean, if you look at some of the small cell businesses that are out there they were ex-AMT employees. So no we've been in the - we've looked at small cells for many, many years and we believe again on the premise that we want to scale exclusive pieces real estate that the way that small cells are being deployed in the United States it's largely sitting on fiber and given the amount of fiber that exists in the United States that it's in a [indiscernible] it's an impossible way of being able to come with exclusive pieces of real estate because there's another strand that can go right by it.

And so, while there is a return that can be developed on that kind of environment we are looking at other classes of assets within our own business where we can generate higher rates of return.

Phil Cusick

And in international markets there's not as much fiber. Are you are you willing to invest a significant amount of capital into building fiber out or is it more opportunistic sort of to speak?

Tom Bartlett

Its more opportunistic. We do look at - again fiber as part of the supply chain decision. We want the exclusive piece of real estate and whether we build it, lease it, however we obtain the fiber, whether it's aerial or whether it's buried, we'll look at the most economical way of putting our hands on that. And we think that that's just a more attractive way of being able to deploy that kind of densification in those major metropolitan areas.

Phil Cusick

Okay. Let's switch gears and dive into India a little bit. You talked about 1Q being the high watermark for ‘19 churn. Just remind us where you are in the process of churning through that base of acquired network?

Tom Bartlett

Yes, I mean, the churn itself is a function of those carriers that consolidated or were consolidated or closed their doors over a kind of a 24 to 36 month period. And so we started to see some of this churn at the end of fourth quarter 2017 as you might recall and then largely in 2018 and then 2019 is a kind of a flushing out some of that activity from the beginning of 2018 those companies that were consolidated or closed their doors, but then more broadly our partner the Tatas, which is a transaction that we settled on with them as you recall, at the end of last year they wrote us a check and for that then they were able to churn out a good piece of their business.

And so that is actually then working its way through the system if you will in 2019. And so, the beginning of the year is as you mentioned, as we've said is that high watermark of churn and that will ratchet down into the fourth quarter such that while there might be some spillover in the beginning of 2020 to largely be out of the system that's on the churn side.

On the growth side, we've been able to continually enjoy the new amendment and co-location activity that's going on in the marketplace. And, Airtel or Jio are significantly investing in their businesses. Vodafone is starting to invest in its business, now that it's kind of through the merger with a company called IDEA.

And so we would expect to back out the churn. India actually to be our highest organic growth market across our portfolio, including the United States and be upwards in kind of the 10% range and we would expect, coming into 2017, ’16, ‘17 we were double digit type of growth rates in the marketplace. I mean, this is a - it's a huge market and there's a lot of opportunity within the market itself.

And so we're really energized, our teams, local teams are energized about what they're seeing in the market. It's a market where they today probably have about 600,000 tower leases. That's not us. That's the market itself. And third parties have and we've done our own analysis, we expected to grow over a million - to over a million within the next three to five years.

And so, we're - the government is well behind it. There's new spectrum coming into the marketplace and we have --, what we believe well capitalized customers looking to make major investments in the market.

Phil Cusick

And what about competition in India. Are there other companies that are going to take a good chunk of that or do you think you can take a lot of that?

Tom Bartlett

On the tower side?

Phil Cusick


Tom Bartlett

I mean, there are, its interestingly enough, it's setting up to very much look like the U.S. market, kind of four large wireless companies and three large tower companies. And then there is still some smaller players out there that we think will be probably rationalised and consolidated into one of the three that remain.

But we think that, we'll all be taking our fair share. Hopefully we'll be taking more than our fair share in the marketplace. But, I think we'll all be able to enjoy growth going forward.

Phil Cusick

Okay. We see a real chase for infrastructure assets around the world. And towers have been participants in that. Has that made it harder to go after new deals out there or are there things that are interesting to buy from here?

Tom Bartlett

I mean, there are kind of two questions. I mean, they're definitely using things to acquire. There's more - definitely more capital kind of chasing the assets themselves, whether it's private equity or sovereign or pension or. And so yes, I mean that is inflating some of the price points.

We stand down on most of the hosts during actions and we don't stick our nose into them just because of the size of we are, we usually in all of the mix, all of them looking at them. But we do have a very disciplined approach in terms of how we allocate capital first to our dividend next to our capital program and then available cash to the extent that we're in within our capital structure we'll look to M&A if not, we'll look at buyback.

And so most of the transactions that we do look at we just don't see the value that they're trading at. But there still are some sweet spots., if you look at the markets that we're in - we're in - we've positioned ourselves internationally into what we believe are the largest emerging market democracies in the world.

And so you look at, companies like countries like Nigeria, South Africa, Brazil, Mexico, India, I mean, there are some countries that we just stay away from just because it's very difficult to do business. So we're very focused on those kind of five key markets in terms of our rate of growth.

We only own probably a third of the inventory towers in those markets. So there's a lot of opportunity for us to be able to if we're patient, to be able to get traction in those markets. And so we've grown, you look at 10 years ago, I think we had probably 22,000 sites. Now we have about 170,000 sites.

And so, I think there'll be opportunity to be able to procure some of those sites, but we just - we do are able to kind of stand down and be very patient. We found that if PE [ph] money in particular kind of comes into an asset, three to five years is going to be back out in the market. And we'll take a look at it - take a look at it then.

But the modeling that we use is very consistent and the metrics that we use, the kind of the way we model are very consistent, good rule of law, a very competitive wireless market, exclusive pieces of real estate, an asset that we can scale, good credit and then we have a 10 year discounted cash flow that we use to evaluate the asset and we discount it based on a locally adjusted risk adjusted rate of return. So, in some of the markets in Africa it's up in the high teens, as you as you would expect. And we look at that and look at the accretion versus buying back a share of stock. And to the extent we're able to get it to trade we'll move on it. And so we have been very successful over the last six or eight years and we'll see what that might look like over the next five to five years or so.

One of the things that we do have is we're excited about is, we do have a sizable build program. So we build towers, we'll build probably 3000 plus towers this year and we build them for our existing customers with an anchor tenant underneath an existing master lease agreement and internationally at day one yields on that are really in kind of double-digit rates, low teen kind of rates of return. So it's a very good use of our capital and so we continue to look at more ways of being able to drive more newbuild activity.

Phil Cusick

Okay. I want to open up to the room if anybody has any questions. Just one up here.

Question-and-Answer Session


Unidentified Analyst

Thanks Just back in the U.S. in terms of 5G's, you heard Kendall Stevenson [ph] this morning talk about using the 4G equipment that is hanging on towers today for the first phase of 5G just being a software switch on. So if that's the case what does that mean for growth in the U.S. the next couple years as they leverage their existing assets to do 5G?

Tom Bartlett

Yes. No that's a fair question. I mean, that is one of the differences between a 4G rollout and clearly a 5G rollout. I mean, what we're seeing now is starting to get deployed are kind of the enhanced 4G radios, as well as kind of 5G radios ready to be turned on. And you're right, I think it's a bit of a software upgrade for the carriers themselves to be able to turn it on.

And that's what the unique piece about this is while it will not be kind of an overbuild, like a 4G. We think that the amount of demand on the 5G again because of speed, because a latency will require then the carriers themselves to have to put a lot of infrastructure on the site radios, antennas, MIMO [ph] those types of assets on the towers themselves to ensure that the quality of service is being received.

So it is going to look different. And it's, it's in some cases people have said well, , we might see kind of with 5G, 4G again kind of being the technology of choice because there's still going to be that 30% to 40% demand on the network, right. And so the carriers themselves are going to have to add enough infrastructure on the towers to be able to support that.

But in terms of real 5G services, you might see it relatively flat for a few period - for a few years and then all of a sudden spike because of some of the use cases being able to take off, whether it's on driverless cars or whatever it might be on. But I think at least the way we're thinking about it is that like 3G, 4G is going to be with us well into the ‘20s. It's a 15 year plus type of technology.

And so the carrier whether it's, a 5G switch they can get turned on or whether it's simply just 4G a handset devices that are in people's hands, there's going to need to be more infrastructure put it - put on those sites just because of the physical limitations in terms of the existing infrastructure supporting the existing rate of demand.

So there will be ongoing requirement to amend existing leases, depending upon the band of spectrum, perhaps more densification is going to be required because the signals aren't going to be propagating to the same length, to the extent that more mid band spectrum starts to come into the mix.

So we think that there's enough complexity there to provide - I guess go back to Phil's first question. We feel good about where the market is heading and the kind of the demand that we would expect to see.

Phil Cusick

Other questions. Let's switch gears to Brazil, your second largest international market. Can you give us an update on what you're seeing in carrier activity and also how Oi is going now?

Tom Bartlett

Yes. I mean, from a carrier activity perspective, we probably - I think in the first quarter our organic growth rate was probably in the 6% to 7% range in Brazil, right. It's down a bit candidly from the last two years. One of the pieces is because of our escalator, our escalators largely in international markets our CPI based. And so we underwrite some of the risk really in two ways internationally, one is the inflation based escalator. The second is that we pass through a lot of the expenses, whether it's land, costs in Latin America or power and fuel in Africa, as well as in India. So that's had an impact on the overall I think rate of growth in the marketplace.

We - again these things happen in cycles. And one of the elements of what we've tried to construct is a portfolio kind of across 16 now 17 markets is that they go through these demand cycles and build cycles differently. And the customers go through the build cycles differently within each one of the markets. The thought is that when you can put all these different sine waves if you will on top of each other they give you kind of a straight line of predictability, you're right, and that model works, and that's really helped us in terms of the ability to kind of scale what that might - what might look like.

Right now, I think Brazil right now is down from an overall rate of growth. I mean we have a good build program going on in the marketplace. The team is energized. There's a new administration that is being worked through. OI seems to have come through, the issues that it had in the marketplace at a bankruptcy if you will, so they are now starting to contribute.

There are probably a couple of consolidations that are going to happen. One, as we know, with Nextel, so there's probably consolidation that's going to happen over the next year or it's unclear as to where that asset or how that asset might evolve. But it's still in a market where I think there are roughly 50,000 sites towers in the marketplace and we still feel it's underserved by a factor of two.

And so we're excited about Brazil, as I said this year it's kind of mid single digit kind of growth rates and hope to get that back up into that could had a double digit growth rates that we've experienced over the last several years. Or as Mexico, Mexico is kind of high single digit kind of growth rates. And again, it kind of balances out the lesser growth if you will in the Brazil market. So from a Latin American perspective it's contributed to the business.

Phil Cusick

The question here.

Unidentified Analyst

Thank you. You mentioned just now that on the 5G, given the different bandwidth it's using the – the signal doesn't travel as far. So I suppose you need a much denser network. And I guess what would that mean if the service area of each abuse sites then becomes smaller maybe just or maybe…

Tom Bartlett

I mean, I think it's important to look at - look at the technology versus the band, right. I mean, and that's why certain spectrum is more valuable than other spectrum, 600, 700 megahertz spectrum because that signal will go for long pieces, miles. It's more valuable to a carrier than say millimeter wave type of spectrum which is 28 gig where the signal may only go 500 feet.

So when a carrier is looking at creating a nationwide capability they're going to need different bands of spectrum by which to be able to deploy it, all right. T-Mobile has talked about 600 megahertz looking at a nationwide 5G network. Verizon has talked about rolling out millimeter wave, high gig spectrum in your denser urban markets.

And so the way I kind of think about the technology is like every other technology, it's initially going to start in your dense urban markets and it's ultimately going to end - going to be rolled out nationwide. I mean, we're going to be able to take advantage and want to take advantage of the services in Boston, but when we go out to Wellesley or wherever we're headed west, we're going to also want to be able to enjoy those same types of services. And so the carrier will utilize these different bands to be able to deploy the spectrum.

In the - some of the more suburban rural markets you may find that there's kind of a hub and spoke type of the network that we're thinking about might be deployed, where we have 150 foot tower, it's got power, it's got backhaul, it's got all of the permitting and space that may be a feeder system into a an office park or a small neighborhood or wherever that might be. And that may utilize different spectrum to be able to penetrate or in that particular neighborhood.

So you might have like 600 or 700 bands supporting a wide sloth. But where 5G is really able to - as I understand and to be able to really enjoy its benefits is where you need a real runway, a real wide sloth of spectrum. That's why the millimeter wave I think is exciting to the carriers right now because there's a lot of it available.

So there's going to have to be some re-farming, some joint banding out as you leave the cities for the carriers to really be able to enjoy all the benefits of the 5G related services. So I think it's going to look a lot. It's going to look different wherever you are. The topography is going to have an impact in terms of what that's going to look like, the type of user is going to impact what that looks like and you can slice the 5G, so you can target certain services to do different customer sets.

And that's why it's so it's so hard to kind of understand what that's going to look like at the end of the day. We want to position ourselves and we are in one of the elements of our strategy. So from a leadership perspective we want to make sure everybody in the world knows what we do. So whether you're out in Silicon Valley, whether you're in Detroit, wherever you may be we want to make sure that those players that are going to be looking at this technology is a way to really enhance the value of their company know how American Tower can position itself and play a role in that.

And so that's why we're doing some of the trialing, that's why we're in some of those types of discussions and we'll know much better I think three years from now how that's all going to evolve, but we want to make sure that we don't miss the boat now.

Phil Cusick

If I can ask one more because there's nobody here after, but as I think about your sine wave comment, which we've talked about before, but it seems like India was a pretty out of trend pain right. But now that we're through that, U.S. seems like it's doing well. India is doing well and probably accelerates. Brazil is doing well and Mexico is doing well. Seems like you might be into a period where more than average are moving in the right direction over the next…

Tom Bartlett

I think that's - I think that's right, Phil. I mean we don't see the kind of event that we just went through in India. If you back out the churn, you look at the growth rates for international business organically it was north of 8% and we've always thought the reason we’re there is that we've always thought that our international markets could grow 2 to 300 basis points faster than our U.S. market and that's largely because in many of the markets we're still in a 2, 3G type of environment, in many of those markets there really is no wireline presence, in India for example less than 10% of the population actually has a wireline connection.

And so as a result those customers are spending every available nickel that they have on their wireless networks. The smartphone penetrations are well below where they are in the United States. And so if we can get all of them kind of moving in the right direction which they are, there's all good solid growth, they do move at different paces. Our customers build out their networks, everyone is building it out differently. But we do expect that the growth rates there, that's the reason that we're there would be significantly greater than the U.S. market.

And so what we've been ultimately trying to do is kind of change the slope of the growth curve. You've got the U.S. very predictable rate of growth. Clearly 5G is there, so it's still unclear as to what - how that might move things. But given kind of our history we've been in that kind of 6% to 8% kind of rate of growth. And then if you can layer on a series of assets, a series of markets that can drive that a bit higher we think that's worth the effort.

Phil Cusick

That's a great. Let’s stop. Thanks, Tom.

Tom Bartlett

Thank you. Good to see you.+