CCI - Crown Castle Inc. (CCI) Presents at Bank of America Securities Media Communications and Entertainment Conference Transcript
2023-09-14 13:15:05 ET
Crown Castle, Inc. (CCI)
Bank of America Securities Media, Communications and Entertainment Conference
September 14, 2023, 09:40 AM ET
Company Participants
Daniel Schlanger - CFO
Conference Call Participants
Presentation
Unidentified Analyst
Thanks, everybody, for joining us. This is our first Comm. Infrastructure session of the day. Really pleased to have with us Dan Schlanger, EVP and CFO of Crown Castle. Thank you very much for joining us, Dan.
Daniel Schlanger
Thanks for having us.
Question-and-Answer Session
Q - Unidentified Analyst
Do we have to make any Safe Harbor statements or anything like that?
Daniel Schlanger
All good. Just check the damn 10-Q.
Unidentified Analyst
Okay. So let's start off. So look, Crown's [ph] had some tough sledding from a stock performance standpoint this year. And I think it kind of began with the realization at second quarter results that -- among other reasons, I've actually got three reasons.
I think, number one, is that people gave up on the idea of recession. So owning defensive stocks was kind of fell out of favor. Second was that as people decided that we're not going to have a recession, higher rates for longer meant people had to continue to make adjustments for refinancing expenses and those sorts of things. Both of those things are kind of out of your control and not really fundamental wheelhouse. The third thing was, I think, the realization that the -- an anticipated carrier slowdown in capital spending and activity levels was happening more abruptly. I think was the word that got the run around starting in the kind of -- at the end of the second quarter into the second half.
So maybe we start there and talk about why do you believe the carrier activity levels kind of dropped off in ways that were kind of unanticipated at the beginning of the year?
Daniel Schlanger
It's a good question. And what I thought -- we anticipated, as your question implies, that activity levels were going to slow coming into 2023. When we gave guidance at the end of 2022 for this year, we were very clear about that. We had come off a year growing more than 6% in our tower business, and we thought that we were going to get to about 5% growth. And at the time, I think a lot of investors had not anticipated that level of drop-off and took it as some negative that was affecting us and not our peers.
Unidentified Analyst
And that was from the third quarter 2022?
Daniel Schlanger
Yes. The guide that we gave in October 22 for the 2023 year. And at the time, even at that point, we said, we still think we're going to lead the industry in growth. And I think we got a lot of question about that. Well, how can you lead the industry if you're slowing down? And I think we were more right than wrong that we anticipated a slowdown and the slowdown has occurred.
It's very similar to other generational upgrades that have happened in wireless technologies for decades when we've gone from 2G to 3G or 3G to 4G. We've seen a surge in activity that occurs as our customers push out that new generational upgrade. And then they settle into more of a run rate type of capital environment that continues to expand the utilization and deployment of that new technology for a decade. And we saw that from 2G to 3G and 3G to 4G.
I think what happened this time was, as you pointed out, the slowdown was more abrupt than what we expected. And it happened why we -- why I think it's more -- it occurred more abruptly is that our customers acted more at the same time than they had historically in the generational upgrades.
Unidentified Analyst
So you were around for the 4G upgrade, which at the time was called LTE.
Daniel Schlanger
Thanks for pointing that out.
Unidentified Analyst
I think it's a good thing in your business. So I was actually giving you credit [multiple speakers].
Daniel Schlanger
We -- but Verizon led that push and pushed really hard into LTE and wanted to claim and did claim the brand of being the best network. And they were kind of the first phase of the surge, and then other companies followed them. And therefore, when Verizon came down, other companies were still ramping around the higher level. And so it looked like less of an abrupt change. This time around, our customers generally acted at the same time.
Unidentified Analyst
In unison. Yes.
Daniel Schlanger
And then in addition to that in unison activity was DISH, which was a new nationwide network that had not been built in previous generational upgrades, because the nationwide networks have generally been built prior to 4G and actually prior to 3G, the nationwide network was out there. So we had all of that activity hit at the same time over the course of 2020 to 2022, which was reflected in our business. Our tower growth was really high, greater than 6%. We grew our dividend 9% to 11% a year like it was. We were delivering those results to our shareholders.
I think what we didn't recognize quickly enough or when we were thinking about it was, what that also means there's a chance that everybody comes down at the same time. And we knew it was going to be a reduction in activity. But if you go from a higher peak than historical to a lower, lower than historical, it looks very abrupt, even though the general driver of the activity is the same dynamic. Push out really hard to get your new generational upgrade out in the world utilized by customers and then pull back a little bit and settle into a more run rate. That dynamic is still in play.
What is interesting though is that despite this reduction in activity that we are seeing, we believe that the run rate for 5G will be significantly above the run rate for 4G as an ongoing expense or capital expense for our customers for two reasons. The first is just the quantum of data is so much higher now than it was at the beginning of 4G. So the base, if you're growing 20% to 30% mobile data demand per year, the base being higher matters because then the increment is higher, and therefore, the amount of money you have to spend is higher.
Secondly, we believe that because the density of the demand has already been established at the beginning of 4G towers were the only thing being deployed. By the end of 4G, we had a bunch of small cells being deployed because the density of the demand was already so high that small cells were required. That's true right now for 5G, which is why you saw both Verizon and T-Mobile give us large orders even during this period of time, they were significantly focused on towers, they gave us large orders for small cells because they knew the density of the demand was already there, and they needed to be delivering some additional capacity to the areas where that demand density require.
So we believe because small cells will come in as a more -- an earlier version of what the network architecture upgrades will look like that that amount of money will be spent as well. So we have 2 things going on. Like I said, the quantum, overall quantum of data is higher, and we have more small cells, more density in the demand, those two things will require our customers to spend more money in 5G than 4G.
Unidentified Analyst
So a couple of follow-up questions on that. I guess I'll come back to the kind of core fundamentals on that. But I guess within the sector, we kind of have two bookends at this moment in time with the slowdown kind of or lull or whatever you want to call it. One end is America Tower, who kind of unapologetically went after a lot of holistic MLAs, trade at made -- presumably made trade-offs. But now they've got 90% of their business contracted out through 2025 and like through 2027, I think they're saying like 70%. And the portion that's not contracted is really just the maturity of existing leases, 99% of which always get renewed anyway. So there's not a lot of variability in that.
On the other end is SBA who has very unapologetically not really value these holistic relationships and has been very activity-driven and has been guiding to more than a third slowdown, percentage slowdown in their new business revenue expectations for next year. So there's kind of these ends were higher highs and lower lows than activity levels, whereas you kind of more smooth it out with these holistic MLAs, where does Crown sit in that spectrum philosophically and actually contractually today?
Daniel Schlanger
I'll start the question on the contractual first, and then I'll get to the philosophical. In our earnings materials from last quarter, we had a chart that we put in that showed through 2027, we believe our tower growth will be 5% per year on average and that 75% of that has been contracted already. So just on a math basis, we are much closer to AMT than not having anything attracted. You said they said 70% through 2027, we're at 75%. I would say that's the same thing.
Unidentified Analyst
And let me ask a follow-up on that. So 75% of 5% is 3.5%. We know that the escalators are contractual, so that's 3%. So does that mean that you have a 0.5% contractual volume growth and or am I misunderstanding what you're saying with that?
Daniel Schlanger
So I would say that the 3.75% is the minimum that we are going to get according to our contractual agreements. That does include escalators so you can interpret it however you want. Philosophically, what we think about is our job is to try to deliver the highest risk-adjusted return we possibly can to our shareholders.
We have managed the risk side of that equation in many ways, one of which is through the agreements we have signed with our customers. When we look back, and you can see this in the owning of materials we put together, in the 4G upgrade cycle, we had some swings in volatility in the growth rates of our business.
So as we renegotiated our agreements, we took that into consideration and tried to get a floor that we thought was reasonable without cutting off too much of the upside. We have sophisticated counterparties, there's no way we're going to get something for nothing. So we do know that there are trade-offs.
So the floor that we're at 3.75% now is actually higher than what some of the years were in our 4G growth cycle. So we did effectively raise the floor. And our growth over the course of the last two years at 6% to 6.5% is still higher than in most of the years that we had in 4G. So we didn't cut off the upside. So we've reduced the risk without taking off too much upside and -- or much outside at all.
And we believe that having an MLA that has a tremendous amount of locked-in growth into it is beneficial because our shareholders want us to have relatively consistent growth over a long period of time in our belief, as opposed to being able to grow 10% one year and 0% the next year and average out to 5%. And I don't think that would be good for our shareholders. That's why we have not gone to CPI-related escalators. We want more fixed escalators because we think that, that stability is as important as the growth itself and why we have locked in the growth through MLAs, a lot of them.
And that risk-adjusted return, we believe has played out because we -- I look at what SBA has returned in terms of just growth in their business. And their net growth has not exceeded our net growth over the last five years. When you think as a la carte in the highest growth period, we just went through the last two or three years have been one of the highest growth periods. You would think that a la carte would allow you to price up and therefore, get more growth, and they weren't able to.
So they have more risk because they do not have long-term contracts, and they have not shown more return. That doesn't to us makes sense from a long-term value creation standpoint. So we are always looking to try to figure out how to drive the highest risk-adjusted return we can. That carries over to a lot of other aspects to our business. It carries over as to why we focus only on the U.S. because we believe it is a lower-risk market.
We believe it is the best market in the world to own communications infrastructure because the growth is the highest, the investment on our customers is the highest and the risk is the lowest. As long as we're paying a U.S. dividend, the risk is the lowest.
You can't pay dividends in reais, you got to pay in dollars. So it matters. We have lowered the risk on our balance sheet because we have gone to a longer tenor. We've almost doubled the average maturity of our debt over the last several years. And we have gone to very low floating rate debt because we want less risk in our balance sheet. We have extended those maturities, so we don't have any one period where we have a huge stack that needs to be refinanced. And we have a very large revolver that allows us flexibility to choose when we go to the market.
All of that was a choice. If we had during the course of 0 interest rate environment, chosen to go shorter term and floating rate only, we would have printed more AFFO. We would have had higher cash flows. But we chose not to because we wanted to reduce the risk in our balance sheet and try to drive the best risk-adjusted return we can. That is our philosophy. It will continue to be our philosophy.
I don't believe we have been recognized in the market for having done so. I can't find where we would have been recognizing the market for having done so. But I believe that we have delivered on what we think is the best way to drive long-term value in a business like ours, which is lower the risk and don't cut off your hub side.
Unidentified Analyst
Let me just make sure I'm getting it right. Through 2027 5% growth, is that a CAGR? And does that include the sprint churn?
Daniel Schlanger
No, it excludes sprint churn. Sorry, I should have said that. Thanks for reminding me.
Unidentified Analyst
And so with respect to the 3.75% kind of locked in, what has to happen to create that 1.25% premium?
Daniel Schlanger
Additional activity that wouldn't be caught up in the agreement itself which would be both activity with the big four customers, where they have some rights to some portions of what we have, but they don't have rights to everything all the time. And then other customers that we could lease our towers to.
Unidentified Analyst
And so obviously, looking back over the 20 years I've been looking at the space. There's always been a premium above the escalator. There's always activity, there's always densification that's happening. I think to your point, there's been this big spend. Now there's -- again, I would call it a low, but the difference between, I think, where we were in 4G, where we are in 5G is that I remember, unfortunately, the 3G I had a split phone and I could download ring tones, and that was super cool. That’s cool. We all share -- oh my gosh, I got like back prints, purple rain on my phone. But then when we got to 4G, there was something we could do that we could never have done before, which was the iOS, Apple Store, the Google Play store applications became a thing, all of a sudden Google and seamless web and Uber or just became parts of our lives. And it really was a step function change in utility for the consumer, and it just fueled massive investment because it was so obvious that there was a monetization opportunity.
I think that right now, the industry is struggling with the lack of some new incremental opportunity to put new money to work. And that is informing a pullback and a lack of need or necessity to put real incremental capacity to work because they don't really see a reason to put new money to work there. Do you agree with that? Or do you -- if you do when do you see it changing, if you don't, why?
Daniel Schlanger
Yes, it's never been our business to try to figure out what the use case is. It's been our business to provide infrastructure to allow that use case to happen. All of the things you mentioned, though, were not the original use case that was envisioned by 4G, not one of them was. And I believe that we all have a hard time as humans. Just predicting what the future is going to be and what that use case looks like until it comes.
And there's always been a chicken and the egg problem. You either need the network to work so well that the use case can be utilized or you need the use case there to drive the network to get there. And I think we're in the kind of cycle of which one is going to go first. But our customers spend more than $100 billion to increase the utilization of their network through the purchase of spectrum and the deployment of that spectrum over last several years. That is not no investment, and that is not a slowdown of investment, and as I said before, I fully believe that the overall cycle of 5G will require significantly more investment in the cycle of 4G. And the use cases are going to come I believe they will be different than the ones that we all think of right now.
I don't think that they are going to be that we, as a consumer, somehow are going to have a use case that is akin to Uber. That would be the repeating of the past, that isn't what happens. There are step function changes that happen as technology changes.
I believe the most likely use cases will be industrial ones, where companies use 5G to try to reduce their costs as opposed to consumer induced 5G to try to figure out ways to better live their lives. And if customers become industrial use cases, I believe they will pay for the incremental benefit that they get for 5G and will allow for a significant investment of both technology and infrastructure.
And we, as Crown Castle are uniquely positioned for that investment because I don't see that running on towers. I see that more running on small cells. You're talking about industrial use cases. It seems more likely they're going to be small cells than towers, more capacity in denser markets. That's what we're looking for. More capacity in denser markets points more to small cells than it does the towers. But towers are going to be required and are still the most efficient way to deploy spectrum over large areas of both population and geography.
So we will continue to grow as in tower industry because that continual just eating of demand that we do, 20% to 30% a year, will require towers to continue to add capacity and coverage to the market. But incremental use cases very well may be on the small cell side of the business that we think we are the only company that's positioned to take advantage of. And we believe we are the cheapest way that anybody can take advantage of that type of activity because we can share the infrastructure. And it therefore lowers the cost for any one customer or one person to use that infrastructure. That feels like a very good market for us at a very good setup for why we have done what we've done and position us to the future.
Unidentified Analyst
So you make a good point about the lack of predictability about these evolutional changes. One of the things that was the unanticipated outcome in terms of use case for 5G to this point in time has been fixed wireless access. The networks were not built assuming the fixed wireless access was going to be the killer app, at least in the early days of the evolution of the network.
So is fixed wireless access -- just to make the point, T-Mobile wants to double the number of fixed wireless access customers they have in the next -- I think it's two years, Verizon roughly the same. And Verizon is going to get quite as much spectrum across twice as much footprint in the country, and they've talked about having to roll that out over the next two years. Is fixes wireless access a meaningful contributor to that missing 1.25% and getting to 5% growth rate today? Next year or the year after or no?
Daniel Schlanger
I agree with the premise of everything you said. I think fixed wireless access was never the thing that our customers -- the carriers were looking at to try to build the network when they build the network. And I think in the early days, T-Mobile has and has still been very clear that they limit the number of consumers per sector so that they don't overwhelm their network with fixed wireless access because I don't know you may know the number better than I do, what does the average home consume in terms of gigabits per month?
Unidentified Analyst
Charter was telling us yesterday, they think it's about 700 gigabytes a month.
Daniel Schlanger
And what's the mobile user?
Unidentified Analyst
10.
Daniel Schlanger
Okay. So you have 70 users per home. That's a big allocation of spectrum, big allocation of capacity. So if they want to double, they're talking about 70 users per home. That's a huge increase for us as an industry. And that would absolutely be a positive for Crown Castle and our peers that everybody is going to benefit if the spectrum that T-Mobile acquired with Sprint or that AT&T and Verizon acquired with the C-band auction is being utilized to provide a single location with steady of 100 gigabits a month that's a great outcome for us because what it's doing is it's consuming all of that capacity faster than we would have otherwise consumed it as an industry, which means we need more and more infrastructure because we need more and more of those sites that allow for that spectrum to be deployed.
I believe that the ability to provide fixed wireless will likely start as a tower deployment because it's the cheapest and easiest and best way to deploy spectrum over a large area like I talked about. But over time, likely gets to more small cells. Because the way towers and small cells work together as towers generally provide the coverage and small cells provide the capacity. If you get enough capacity in a neighborhood, you build a small cell system there. That feels very positive to me when I think about where we positioned ourselves.
I don't -- to your point, though, I don't think that anybody would have guessed that fixed wireless was going to be the first. What's interesting is I don't think fixed wireless is a new concept. Everybody has always thought about it, it just was never available. The capacity and latency was never available and 5G has enabled it to be available.
That's exactly what I mean is that you never know what's going to happen until you have it. And then people are like, "You know what, maybe we can use it this way. And if we do, maybe I can solve this problem" and you -- and that's what happens in the world. And especially in the U.S. because the innovation typically happens here, where the next thing is developed by people who work and live in the U.S. And it's great because it drives a tremendous amount of activity for us. And I think at any point, I'll go back to 3G, I believe at 3G, the upgrade to 3G. The idea then was as long as -- as soon as everybody has a phone and is using their phone, there will be no more growth in the wireless industry.
And then in 2006, the iPhone came out. And everybody said "That's not going to work, it's web-based, we don't need web-based." We were using our Blackberries at the time. Because the BlackBerry was the pinnacle of technological advancement. And then the iPhone came out and everybody was skeptical. We're not going to use that thing, it's web-based, it's not secured, it doesn't have a keyboard, it's just not going to work out. And it turned out to totally change how we all live our lives. That's -- you can't predict that.
So every prediction I've ever seen about incremental wireless data usage has 20% to 30% for some period of time and then it falls to 10% to 15% every time. And if you look over the history, that's never occurred because there's always something that you can't think about that happens that drives it back up, that day of the demand back up. I believe that's going to happen again. I just -- I think that we demand it. We don't know we demand it, but we demand it.
Unidentified Analyst
So that being said, so I'm assuming your plan is to give guidance in October?
Daniel Schlanger
Yes, it is.
Unidentified Analyst
Okay. So let me get as much of that as I can now. The -- I guess the tower revenue growth guidance for 2023 implies, I think, $60 million-ish for the back half of 2023?
Daniel Schlanger
It does.
Unidentified Analyst
Should I -- would it be wise or unwise to assume that, that represents a good jumping off point run rate for 2024?
Daniel Schlanger
Yes. Why business -- our business is a relatively stable business. And I would say every time that we give guidance, it's always reasonable to take the fourth quarter and annualize it Azure baseline. But that doesn't mean that that's the right number for the next year, things can change. But of course, it's the good baseline. Our business just doesn't change that much year-to-year. You can look at our leasing over a long period of time.
And if you were to annualize the fourth quarter, you'd be pretty close almost every year. And on the business, the size of ours, we're talking about $5 million and $10 million differences that people get focused on, which I understand because we're such a long-term growth business, $5 million or $10 million now matters over a long period of time. But is that $5 million or $10 million that I think is what people really care about, not whether you should annualize the fourth quarter.
Unidentified Analyst
Got it. That's not what I care about.
Daniel Schlanger
Yes, it is.
Unidentified Analyst
If you want to give it to me. Sure. Go ahead. So the -- so maybe shifting gears a little bit to fiber services to start. The two kind of questions there, kind of the mirror of fiber -- sorry, of towers, the fiber kind of revenue growth guidance implies a big step-up in the $30 million range a quarter in now $30 million into the second half of the year. Why is there kind of this assumed step function second half versus first half of 2023? And is that a good jumping off point for 2024?
Daniel Schlanger
I think part of what happened was we have a weird comparative period in 2022 in the first quarter versus 2023 in the first quarter. So we had non-recurring items that hit in 2022 that we had called out at the time were about $10 million. If you normalize, you take, just take that out of 2022, and it looks like the first quarter of 2023 is more in line with the numbers you're talking about. So I don't think that there is a step function. And I believe it is reasonable for us to assume that we will reach our guidance or we wouldn't have given our guidance.
Unidentified Analyst
And your longer-term guidance for that business is 3% growth. Just as we've kind of been listening to some of the other companies in the fiber services business, 3% growth is pretty aspirational for them, whether it's lack of return to work or slowness in decision-making or budget cuts or whatever happens to be, where does the 3% growth guidance comfort level come from?
Daniel Schlanger
We -- Well, it comes from our ability to understand the market that we play in and the history we've had. If you look at the history of our business, we've had a pretty consistent level of leasing activity over the course of a very long time. And we feel like we have -- again, a reasonable expectation that the leasing activity will continue.
We have purposely focused our business on delivering engineered solutions to larger enterprises. So whether that's a government agency or education or medical facility or a financial services firm. Those types of customers plan for longer periods of time and require a higher level of engineering and capacity. Because we have built our fiber network based on the idea that we want to have small cells, we have more capacity than most fiber networks. So we build significantly more strands of fiber throughout the markets than most have done. And when we had purchased fiber, we were always focused on making sure that the systems we're purchasing had lots of strands of fiber.
So we have the ability to dedicate more capacity and more engineering to singular customers. And we believe that allows us to have more visibility, more stickiness and a higher growth rate, partly because we are -- we don't have a lot of smaller businesses that are more apt to churn and more price sensitive. And when you add all that together, we've shown we can grow at 3%. We believe we can continue to do so.
Unidentified Analyst
And then kind of shifting to the small cell business. You've kind of -- you had a pause there while the C-band build was happening, you were kind of run rating more like 5,000, 6,000 nodes a year. You've guided to kind of that coming back up into the 10,000 level this year, but there's obviously some churn in there which is kind of mitigating that. But the 10,000 to 11,000 kind of nodes added per year seems to be the comfort level that you have and the expectations you have. When you talk about, I don't know if you've kind of really even given this outlook into the 2027 ZIP code but, should I think about the next 3, 4, 5 years, that 10,000, 11,000 nodes per year is kind of the cadence because that's just what's doable in a real world of scenario.
Daniel Schlanger
We haven't given anything in 2027, but I can tell you that going into 2024, we believe we will be at 10,000 nodes or more going into 2024, just based on the backlog we have. So we have 60,000 nodes in backlog, and we believe we can put those on air and get to 10,000 nodes or more and believe that we can drive double-digit revenue growth going into 2024 over 2023 because you do take some of that churn out you were speaking of and we get more growth. That's a great place for us to be.
And to your point, the activity that caused 2024 to be where it is started two or three years ago because it takes a long time to get small cells on air. So even in the middle of our customers focused on towers, they were planning for small cells. And therefore, now we are seeing the benefits of that planning. Our -- as you pointed out, the small cell business during that tower focus went down, makes sense then. Okay, we don't want to do those right now, but we know we need them. So can we plan for over a period of time to put them on air, and we are doing so right now.
I think that's very positive for our business. I think it shows that all the dynamics we are -- we've been hoping for are coming to fruition that our customers understand the need for small cells, understand the need or economic viability and benefit of utilizing a third-party shared infrastructure model, and we get to do new builds and co-locations. That all plays very well with what we had expected. And therefore, we see lots of growth coming into the future.
To answer your question about the longer term 2027 or the implication of your question, we have 60,000 nodes in backlog. There is no real-world constraint as to how many nodes we can put on air.
Unidentified Analyst
In a given year?
Daniel Schlanger
In a given year. There's no constraint that says we couldn't do more. The constraint more is the demand from our customers. When do they want those small cells on air to provide what network coverage at what point? Because if we got a single order, this is hypothetical. So if we got a single order today for 50,000 small cells that they wanted built by 2027. We can put them all on air in 2027, if we knew about that right now because we got to put all of that it in place.
Yes, it takes 18 to 36 months to build them. But it takes 18 to 36 months, whether there's 1,000 or 50,000 of them, we can get it done. We've shown that we can increase the -- I don't know about 50,000, it was a hypothetical question, but we can figure it out. We have shown that we can go up and down in the amount of small cells we build in a year and manage that process really efficiently.
So I don't think we have been the bottleneck nor do I think that we would cause a bottleneck and the one thing that's running through my mind is I'm saying this is maybe we might run into some issues with permitting and specific municipalities that don't have the capacity. But the reason that we're so good at what we do is that we have those relationships in the municipalities all over the country. And our customers want a lot of small cells build all at once. So they don't come and say, hey, build me two here. They say, bill me a thousand, so we try to do that whole system with the municipality so that we can get it done all at once. So making it 2,000, I don't think would add a tremendous amount of time.
So I believe that the constraint more is what's the demand specific demand, where do our customers want to small cells, when do we want -- when do they want them on air? That's the constraint on our growth more so than is there an industry dynamic that would allow us to put a constraint on our business.
Unidentified Analyst
So I guess where I was going to that was because it kind of feels like the law of large numbers is going to put downward pressure on the revenue rate of growth. But I think, Jay, last week mentioned that you might have a 30-70 kind of colo anchor build, small cell profile. But at the margin, it's 50-50. But of the nodes going on there, let's just say, in 2024, half of those will be colos, which means that the margin in that business should be creeping up. And so we should be seeing accelerating EBITDA growth, I would imagine, even if we see somewhat decelerating revenue growth because of that colo mix shift. Is that right or wrong?
Daniel Schlanger
It depends on the colo mix shift and when it happens. So we -- what he was talking about 2023, that we believe that about 50% of our nodes are going to be co-location and 50% anchor build. If, for example, we were in 2024 to have the same co-location to anchor build is 50-50, which looks very good I don't think you would see the dynamics you're talking about, we would have to take an acceleration in the amount of co-location in order for us to see that dynamic.
But I don't believe that there is a revenue pressure at this point. We are -- what I -- you take all the things I just said, we believe it will be at least at 10,000 nodes. We're going to grow our revenue double digits next year. That's an acceleration of our revenue growth. We believe that there's going to be significant co-location.
We'll talk about that more in October, which we believe will drive really good returns in our business. I think the issue that we have is that the returns don't come through because we are also still building a huge amount of anchor builds. So you don't see the overall yields that we produce every quarter, increasing because you have some anchor build activity, some co-location activity, and it evens out to about 7.5% yields and that number doesn't move around very much.
Unidentified Analyst
So I want to ask one more question. I know we're going to run out of time. But -- the -- for the last couple of years, you'd be able to kind of say to the market, hey, we've got $3.4 billion operating cash flow, $1.4 billion CapEx, $2 billion free cash flow. We've got a $2.7 billion dividend, but we're going to be able to cover that dividend because our EBITDA growth at a five times multiple will allow us to not have to do anything other than what we typically do in the debt markets. Obviously, debt market is more expensive now.
That math implies that we need at least kind of $150 million of sequential EBITDA growth in 2024 or 2023 to keep that cycle going. Is -- are we going to keep that cycle going?
Daniel Schlanger
There are actually a few things in there that I think you missed, but I don't think we have time to get into. So I can't confirm or deny that, and I wouldn't because we're going to give guidance in October. I tried.
Unidentified Analyst
Well, Dan, thank you for coming. I really appreciate it was great.
Daniel Schlanger
That's a great conversation. Thank you so much.
Unidentified Analyst
I think right now, we're going to have a short coffee break and then back in here with Rogers. Thank you so much.
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Crown Castle, Inc. (CCI) Presents at Bank of America Securities Media, Communications and Entertainment Conference Transcript