Jay A. Brown
President and Chief Executive Officer at Crown Castle
Thanks, Chris, and good morning, everyone. Thanks for joining us. Our third quarter results continue to demonstrate our ability to generate consistent growth in the face of changes in the industry environment, allowing us to maintain our full year 2023 outlook for revenue, adjusted EBITDA, and AFFO.
Based on the multi-year strength of our business model, we are confident in our ability to grow our dividend beyond 2025 once we get past the Sprint related churn. Therefore, we are committed to maintaining our dividend in 2024 in the midst of the impacts from the non-recurring Sprint Cancellations and lower contributions from services. Based on the timing of these headwinds, we expect the low point of AFFO to occur during the first half of 2024 before returning to growth in AFFO in the second half of next year and beyond. Demand for our assets has consistently been driven by our customers investing in their networks to keep pace with the rapid growth in mobile data demand.
Through our shared infrastructure model, we have helped our customers maximize the benefits of their investments by lowering the cost of deploying networks, networks that have significantly improved our ability as consumers to connect with the people and the world around us. The combination of persistent data demand growth and our ability to provide low-cost shared infrastructure solutions has enabled resilient underlying growth for us throughout generational upgrades and across macroeconomic cycles.
Our full year 2024 outlook demonstrates the benefits of complementing our tower business with a leading portfolio of small cells and fiber. As our customers increasingly focus on 5G network densification so that they can meet the needs of their end users, we expect the total demand for our diverse portfolio of assets to increase. For towers, we expect to generate organic revenue growth of 4.5% in 2024. For small cells, we expect to generate organic growth of 13%, driven by around $60 million of core leasing activity, as we increase new nodes from 10,000 in 2023 to 14,000 in 2024. And for fiber solutions, we expect continued acceleration of leasing activity combined with a lower churn to generate organic growth of 3%.
Excluding the impact of Sprint Cancellations, the combination of organic revenue growth across our business is expected to generate consolidated organic growth of 5% in 2024, up from 4% in 2023. While our growth remains robust, we know we need to continue to get better. Therefore, we continue to simplify, streamline and centralize our business processes and operations, which will reduce our long-term costs and improve our customer experience.
Since announcing the restructuring plan in July, we have reduced our workforce and achieved $105 million of annual run rate savings. Having completed that plan, we have identified additional opportunities to drive further efficiencies, including a plan to move approximately 1,000 employee positions from several locations nationwide to a centralized location by the end of the third quarter 2024. The strong organic growth and improved operating leverage from the actions we continue to take to reduce costs supports our maintaining our current annualized dividend of $6.26 per share.
As reflected in our results and outlook, our differentiated strategy to invest in and build an unmatched portfolio of assets diversifies our sources of growth. Our 40,000 towers, 115,000 small cells on air and under contract, and 85,000 route miles of fiber concentrated in the top U.S. markets make us well positioned to capitalize on long-term growth and data demand, regardless of how carriers deploy spectrum and densify their networks.
At the beginning of 5G, customers moved quickly to deploy record amounts of newly-acquired spectrum. This drove record tower activity levels. As the initial -- this initial surge in tower activity ended, our small cell growth is accelerating, as customers shift focus to densifying portions of their networks that have experienced the most traffic.
In 2024, we expect to deploy a record 14,000 small cell nodes. Our ability to capture the accelerating growth in small cell demand is driven by the assets and core capabilities that we have built as the largest operator of shared infrastructure in the United States. Our 85,000 route miles of fiber include high strand counts in heavily populated areas, where the density of data demand is the highest, which make them the most desirable locations for small cell deployments.
We are a highly reliable operator of that fiber network. If fiber goes offline, small cells go offline and, for our wireless customers, network quality and reliability are paramount. We have a world-class team of network operators and engineers that ensures our network is designed to mitigate the impact of any outage and is capable of fixing these outages quickly and efficiently.
We have also developed expertise in navigating the permitting processes with multiple municipal organizations, regulatory agencies and utility companies across hundreds of disparate local markets, each with a unique set of regulations and stakeholders. This expertise allows us to navigate the difficult process of building small cells in the markets across the United States.
Finally, we are consistently finding ways to build small cells and fiber more efficiently. These efficiencies allow us to provide the most cost effective and reliable network solutions for customers.
We look to deliver the highest risk-adjusted returns for our shareholders through continuously building on the core capabilities that I just mentioned that generate unique value in the businesses we own and operate. These capabilities reduce the overall cost of deploying and operating communications networks, which becomes even more compelling for our customers in times of increasing capital costs. Of course, higher capital costs impact us as well.
Our disciplined approach to capital allocation means that as our cost of capital increases, so must the returns we require from our investments. We are continuously evaluating the expected returns of all of our investments against the rising cost of capital and other potential investment opportunities, including repurchasing our own shares. Consequently, we allocate capital to whatever we believe will generate the highest long-term returns.
Being disciplined allocators of capital means that we appropriately adjust the scale and economics of our investments based on changes in technology, customers and macroeconomic conditions. It doesn't mean that we stop investing. We apply a consistent, rigorous approach to pursue opportunities that generate superior expected returns for their given level of risk.
Long-term value is created when we invest in those opportunities. We have a long history of success in towers built on investing through various macroeconomic cycles, and we believe the small cell business is another great example of how we can build a business where our unique capabilities drive sustainable advantages that can grow significant long-term value.
In 2024, we plan to capitalize on these opportunities, resulting in approximately $1.2 billion in discretionary capital expenditures, net of customer contributions, with $1.1 billion in our fiber segment. This capital is supporting the acceleration of expected 10,000 nodes in 2023 and 14,000 nodes in 2024, reflecting a 40% increase in new nodes with only a 20% increase in capital, as we expect more than 50% of the nodes to be colocation nodes.
Importantly, we expect to fund this with discretionary capex in 2024 without issuing equity. Compared to 2022, this means that we expect nodes deployed in 2024 will be up 3 times, while fiber capex is only up 30%, again reflecting increasing colocations on our existing assets. The colocation and increasing yields on multi-tenant systems continue to be similar to the development of the tower business over the last 25 years.
There is one more item I wanted to discuss. As you saw in the release, Dan will be departing Crown Castle next March. While he's not leaving for another five-plus months, I wanted to take the opportunity to thank him for the contributions that he has made to the company over the last seven years. He has been integral to the growth of our business and strategy. We are benefiting from the work he has led to increase the duration and predictability of our balance sheet, and he has developed a strong finance team. We will wish him all the best in his next endeavors. We have begun a search to find his replacement, and we'll be considering both internal and external candidates.
As I wrap up, we believe the low point for AFFO will be in the first half of 2024 as we work through the non-recurring Sprint Cancellations and the services headwinds that I mentioned earlier. The consistent growth of each of our lines of business, driven by persistent growth in data demand, gives us confidence in our ability to fund our capex budget in 2024 without issuing equity, to maintain our current dividend in 2024 and to pursue sustainable dividend growth beyond 2025.
And with that, let me turn the call over to Dan.
