American Tower Corporation (NYSE:AMT)
Q4 2017 Earnings Conference Call
Feb. 27, 2018, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American Tower Fourth-Quarter and Full-Year 2017 Earnings Call. At this time, all participants are in a listen-only mode. Should you require any assistance or like to ask a question at all during today's call, please press *0. As a reminder, today's conference is being recorded. I'd now like to turn the conference over to our host, Igor Khislavsky. Please go ahead, sir.

Igor Khislavsky -- Director of Investor Relations

Thank you. Good morning and thank you for joining American Tower's Fourth-Quarter and Full-Year 2017 Earnings Conference Call. We have posted a presentation which we'll refer to throughout our prepared remarks under the Investor Relations tab on our website, www.americantower.com.

Our agenda for this morning's call will be as follows: First, I'll provide a few highlights from our financial results for the quarter and full year 2017. Next, Jim Taiclet, our President, Chairman, and CEO will share some brief thoughts on our recently completed Double Double initiative and our positioning for the future. Finally, Tom Bartlett, our Executive Vice President, CFO, and Treasurer will provide a more detailed review of our 2017 results as well as our initial outlook for 2018. After these comments, we'll open up the call for your questions.

Before I begin, I'll remind you that this call will contain forward-looking statements that involve a number of risks and uncertainties. Examples of these statements include our expectations regarding future growth, including our 2018 outlook, capital allocation, and future operating performance, the pacing and magnitude of the Indian carrier consolidation process and its impacts on American Tower, assumptions around our pending and recently closed acquisitions, and any other statements regarding matters that are not historical facts.

You should be aware that certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include the risk factors set forth in this morning's earnings press release, those set forth in our Form 10-K for the year ended December 31st, 2016, and in the other filings we make with the SEC. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances.

Now, please turn to Slide 4 of our presentation, which highlights our financial results for the fourth quarter and full year 2017. During the quarter, our property revenue grew 10.3% to $1.68 billion, our adjusted EBITDA grew more than 10% to $1.03 billion, and our consolidated adjusted funds from operations and consolidated AFFO per share both increased by about 8% to $707 million and $1.64 per share respectively.

Finally, net income attributable to American Tower Corporation common stockholders increased by 8.5% to $220 million or $0.51 per diluted common share. This included an impairment charge primarily related to assets in India partially offset by tax benefit associated with the impairment charge. The total amount of the impairment was approximately $209 million in the quarter, about $127 million of which was attributable to AMT common stockholders.

From a full-year perspective, our property revenue grew 14.9% to $6.6 billion, our adjusted EBITDA grew more than 15% to $4.1 billion, and our consolidated AFFO grew by 16.5% to $2.9 billion while consolidated AFFO per share rose by nearly 16% to $6.72. Finally, net income attributable to American Tower Corporation common stockholders increased by nearly 36% to $1.2 billion for the year. With that, I'll turn the call over to Jim.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Thanks, Igor, and good morning to everybody on the call. I'll briefly cover three topics today: The results of our just-concluded 10-year strategic plan, the launch of our next 10-year strategic plan, and our key focus areas for 2018. As many of you may recall, in 2007, American Tower initiated a long-term strategy for growth over a 10-year time horizon. By 2017, our strategy targeted 4x growth in number of communications sites and 4x growth in financial performance. Internally, we called this our Double Double strategy. As you can see, the trajectory of operational results delivered under this strategy is on Slide 6.

As we announced in our 2017 results today, I'm extremely pleased to report that we far exceeded both of our aspirational strategic goals. On the asset dimension, our strategy called for 100,000 towers and small-cell systems by the end of 2017. We ended the year with more than 150,000 sites, exceeding the goal by over 50%. The commensurate year-end 2017 financial objective was $6.00 per share of consolidated AFFO. We generated $6.72 of consolidated AFFO per share in 2017, exceeding that goal by 12%.

These accomplishments were led by my colleagues on the American Tower executive team, each of whom has been in their position for the entire Double Double strategy period. Delivering these results on the ground were our nearly 4,500 team members from around the world -- from Boston to Sao Paolo to Johannesburg to Mumbai. American Tower's 2017 results, in particular, were emblematic of the pace of growth enabled by our Double Double strategy.

We grew our consolidated AFFO per share -- as Igor just said -- by nearly 16%, expanded our return on invested capital and increased our common stock dividend by more than 20%, all while simultaneously buying back around $770 million in stock during the year. Moreover, during the course of just the past five years, we've invested nearly $20 billion to acquire and construct communications real estate. Approximately 60% of that was spent in the U.S. and 40% internationally. With our operational momentum and unmatched asset base, American Tower's mission remains consistent: To secure and optimally manage franchised real estate to enable wireless communications and to deliver strong growth and returns in the process.

So, today, we're formally launching our next 10-year growth plan for 2018 to 2028, which we call Stand and Deliver. Given our investments and our leading position in the communications real estate industry, we are expanding upon two of our long-held strategic pillars and adding two additional components to our strategy. All four of these components are summarized on Slide 7.

The first continuing pillar from our Double Double strategy is to deliver operational efficiency to expand margins, but going forward, not only do we intend to focus on efficiencies internal to ATC, we're also expanding our scope into improving the efficiency of the broader mobile industry, including an emphasis on environmental responsibility.

One example is working with industry and leading academic institutions to develop advanced distributive power solutions for tower sites that could supplement and may eventually replace many diesel generators. We're currently evaluating emerging technologies such as deep storage batteries and renewal energy approaches such as solar and wind. The benefits would include significantly reducing diesel generator fuel costs that are paid for not by us, but by our mobile operator tenants, and also then reducing the carbon footprint of the overall mobile network, especially in emerging markets.

The second familiar strategic pillar is to grow our assets and capabilities to meet our tenants' evolving needs. The core of our business will continue to be our extensive global macro tower footprint, as we believe that towers will remain the most cost- and technologically effective solution for 2G, 3G, 4G, and ultimately, even 5G mobile technologies. Consequently, we'll still utilize our disciplined capital allocation strategy to build and acquire additional tower assets that meet our investment criteria and we'll continue to make targeted investments when franchised real estate rights can be secured to meet our tenants' evolving requirements, one long-standing example being our leading position in indoor independent small-cell or DAS systems.

Another such example is the recent small investment in Federated Wireless to help facilitate access to the CBRS spectrum now expected to be made available later this year. While our fundamental view remains that 4G will serve as the primary consumer wireless network technology in the U.S. and abroad through the mid- to late 2020s at least, we also believe that we have to begin now to prepare American Tower to also be the industry leader in the 5G world of the future.

So, as part of the Stand and Deliver strategy, we're complementing our traditional ATC objectives -- operational efficiency and smart asset aggregations -- with two additional components, which we believe are essential to maximizing our future opportunities in five to ten years' time. The first is a methodical and disciplined approach to innovation. We have institutionalized here a structured program to seek out new potential customers for communications real estate beyond our current mobile network operator tenants.

Among these future potential customers and partners are companies in the aerospace and other industries that are interested in commercialization of drones, data centers and cloud computing providers, working on EDGE solutions, and social and branded media and entertainment companies. We're also selectively evaluating new communications real estate architectures that our current and future tenants may need to meet their network siting requirements in a 5G world.

We currently have a number of prototype development efforts and collaborative trials in process in both the U.S. and in many of our international markets. Our wireless smart light pole alliance with Philips Lighting -- especially our Huntington Beach project we announced just this week -- our next-generation broadcast technology trial in Dallas with three customers, and EDGE computing solution evaluations using our tower sites are just three examples of what's going on right now. In addition, we have made a couple of select fiber and urban infrastructure investments in underserved, hyperdense urban markets in Latin America and South Africa to deliver fiber-to-the-tower and small-cell siting solutions at scale where there aren't many other providers.

We realize that these new customer and architecture opportunities will take time to evolve and that some may not pan out in the end. However, we believe it's imperative to begin working on these future prospects today to ensure American Tower's continued leadership position well into the figure, as 5G enables much more robust consumer business and Internet-of-Things functionality in services over time.

This brings us to the fourth component of our strategy: Industry leadership, which is represented by American Tower's elevated participation and broad cross-industry consortia, interactions with national and local government bodies, groups pursuing smart city initiatives, and NGOs seeking ways to extend the economic frontier of advanced mobile communications to populations that are currently underserved. We aim to be seen across industries and around the world as the preferred partner for existing and new tenants that require mission-critical access to communications real estate. Our goal is for these opportunities to amount to meaningful additive leasing revenue and cash flow over the course of our 10-year strategic planning period.

As we orient our company toward this long-term Stand and Deliver strategy, we're also highly focused on the here and now. American Tower has a number of immediate priorities that I'll highlight before turning the call over to Tom for an in-depth review of our 2017 results and our 2018 expectations.

First, we anticipate that our core U.S. tower market will enjoy strong tenant demand in 2018 and beyond. Based on the mobile operators' recent public statements, the aggregate U.S. carrier CapEx should be in the $30 billion-plus range in 2018, a level which supports robust organic tenant billings growth for our business. With all four national carriers in the U.S. offering unlimited data plans and with increasing mobile video consumption among consumers, we can also expect another year of at least 30% aggregate data growth in the U.S., all of which places further demands on wireless networks.

With the announced deployment plans for the FirstNet public safety network, a mid-band spectrum buildout expected in the 2.5 GHz band, and the potential launch of low-band 5G coverage projects, we expect tenant organic billings growth of over 6% this year in the United States. While operating in this strong domestic demand environment, we aim to capture as much incremental cash flow growth as we can while also seeking to extend the term length of our existing base of business whenever possible.

In Latin America, we also expect a solid demand environment, and with ATC's excellent strategic positioning in the region's key markets, we expect to garner both strong organic growth and the opportunity for a robust tower construction program due to customer network expansion in the region. We see the accelerated deployment of 4G in Mexico by both incumbent operators and the new wholesale network providers continuing through the year, supporting organic tenant billings growth with 2017 there. We also expect steady growth in Brazil, which is also pivoting toward a higher-quality 4G market.

Our EMEA region should also deliver solid results and our management team there continues to patiently explore ways to deepen our presence both in Europe and Africa within our disciplined investment criteria. When it comes to India, we are, of course, highly focused on and involved in the ongoing mobile operator and tower industry consolidation process. While we always expected significant operator consolidation in the Indian market, Reliance Jio's bold launch of its 4G network significantly disrupted the incumbents, driving them to rapidly merge their businesses in response.

Consequently, an orderly consolidation process that we expected to run over four or five years is being compressed into a much tighter timeframe. As a result, we anticipate that ATC India -- along with all tower operators in the market -- will experience substantial churn in 2018, and this is included in our outlook. We then expect these elevated churn levels to begin to subside in 2019, and by 2020 and thereafter, that the reordered market will gradually return to more typical organic growth rates over the long run.

Over the mid- to long-term, we believe a rational Indian wireless market with three or four national mobile operators and two to three major tower companies that includes ATC will more than make up for the short-term churn impact of this consolidation process in the short term. Consequently, we have applied our practice of acquiring quality tower portfolios during times of short-term market disruption because they're required at reduced asset pricing. This is the logic behind our signed agreements to purchase the non-Indus Communications real estate assets of Idea and Vodafone. Over our planning period, we expect that these towers may eventually prove to be among the highest-return assets in the company given their low purchase multiple and the market's future long-term growth prospects.

Lastly, I'd like to thank our investors for their confidence in us as we've executed our Double Double strategy over the past ten years, and I hope that you share our enthusiasm about American Tower's potential for strong cash flow growth and expanded returns over our next 10-year strategic planning cycle. So, with that, I'll turn it over to Tom.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Thanks, Jim. Good morning, everyone. The strong set of Q4 results that you saw this morning wrapped up another solid year, in which we drove consolidated organic tenant billings growth of over 7%, added nearly 7,000 new sites, and acquired a strategic set of urban telecommunications assets in Mexico, which we think will generate leasing growth for years to come. In addition -- and as Jim just alluded to -- we continued to steadily increase our dividend and also repurchased nearly $770 million of common stock throughout the year.

We believe we're well-positioned for next year, but before we get into the details of our 2018 expectations, let me quickly summarize our operating results for 2017. If you please turn to Slide 9, for the full year, we drove organic tenant billings growth of over 7% on a consolidated basis, with nearly 6% coming from volume growth from gross new business throughout our geographical footprint. Our U.S. property segment revenue growth for the year was over 7%, driven by a 17% increase in new business contributions and an MLA amendment signed with one of our major tenants in the first quarter.

U.S. organic tenant billings growth was 6.2% for the year, including slightly lower expected Q4 growth of about 5.9% due to some timing impacts associated with certain existing master release agreements as compared to the prior year. Volume growth from co-locations and amendments contributed 4.9% to the full-year growth rate while pricing escalators contributed just over 3%. This was partially offset by churn of about 1.7%, of which just 40 basis points was associated with operational churn from the Big Four wireless carrier core networks. Importantly, as of the end of the year, our average remaining non-cancelable contract term with the Big Four was nearly six years. Throughout 2017, we saw U.S. wireless carriers focus on the quality of their networks as mobile video across unlimited data plans consumed more and more existing network capacity.

International organic tenant billings growth for the full year was nearly 4% higher than that of the U.S., coming in at about 9.7%. This was supported by significant network spending by tenants across our footprint, including a particularly strong year of activity in key markets like Mexico and Brazil in Latin America, both generating double-digit growth. Co-locations and amendments drove about 7.4% of the growth while escalators contributed another 4.7%.

Other run-rate items ended at about 20 basis points, offset by churn of around 2.5%, the majority of which was concentrated in India, where carrier consolidated accelerated in the fourth quarter. This carrier consolidation-driven churn -- primarily related to Reliance Communications and MTS -- increased our full-year international churn rate by about 60 basis points. Adjusting for the impact of this, our international organic tenant billings growth would have been over 10%.

On the inorganic side, the Day 1 revenue associated with the sites we added over the course of the last year contributed another 5% to our global tenant billings growth, and this was driven by our acquisitions as well as the nearly 2,000 newly constructed sites, primarily in our international markets, with average Day 1 NOI yields of over 10%.

Turning to Slide 10, we also generated strong adjusted EBITDA and consolidated AFFO growth in 2017, driven by the 15% top-line growth and diligent management of operating expenses, interest costs, and maintenance CapEx. Our adjusted EBITDA grew by more than 15%, with our adjusted EBITDA margin holding steady at 61.4%. This was despite the addition of a number of new assets we had during the year, the elevated churn rates and increased levels of bad debt reserves we booked in India during the fourth quarter, primarily related to MTS and Reliance Communications. Notably, we exceeded our initial 2017 outlook for adjusted EBITDA by about $230 million.

We also drove double-digit consolidated AFFO and AFFO-per-share growth for the tenth consecutive year. Consolidated AFFO grew nearly 17% and consolidated AFFO-per-share growth nearly 16% to $6.72, while AFFO attributable to common stockholders grew nearly 15% or over 14% on a per-share basis. These types of growth rates continue to reflect our ability to simultaneously optimize existing operations across the globe, grow our asset base, and effectively manage our costs while investing in long-term growth opportunities.

Turning to Slide 11, let's now take a look at the expectations for 2018. At the midpoint of our outlook, we expect property revenue growth of about 7%, inclusive of an expected negative impact of over 2% from lower non-cash straight-line revenue and another 2% from the India carrier-related consolidation-driven churn.

Given our expectation that the ongoing India-related carrier consolidation process will be a transitory event and that our growth in India will return to more normalized levels in 2020 and beyond, we provided reconciliations of the impact of this consolidation-driven churn on Q4 2017 actuals and our 2018 outlook in our press release and supplemental package. Normalizing just for the impact of this carrier churn, we expect total property revenue growth of about 9%.

We anticipate in our outlook the consolidated tenant billings will increase by 8% to 9%, driven by organic tenant billings growth of about 5% and a roughly 4% contribution from newly acquired or constructed assets. Excluding the impacts of carrier consolidation-driven churn in India, total organic tenant billings growth would be in the 6% to 7% range at the midpoint. Our outlook includes the impacts of the approximately 20,000 sites we'll be acquiring from Vodafone and Idea in India, with assumed closings by May 1st for both transactions. All in, total reported property revenue is expected to increase by approximately $460 million, or about $600 million on a cash basis excluding straight-line impacts.

As you can see, we expect a strong year of organic tenant billings growth across most of our global footprint, including in the U.S., where we are again projecting organic tenant billings growth in excess of 6%. This expectation reflects our significant new business pipeline, which includes a 10% sequential increase in lease applications in Q4, partially driven by activities surrounding FirstNet and associated deployments. We continue to see very strong demand for our sites in this, our largest market, with all four national wireless carriers making investments in their networks to keep up with the growing demand for mobile data usage.

In fact, we expect record levels of U.S. new business commencements during the year, and while our existing footprint is optimally positioned to support the network initiatives of the Big Four and our other tenants, we continue to evaluate additional opportunities for us to add value, including our alliance with Philips Lighting and a host of other projects within our innovation organization. Bottom line, U.S. continues to be an extremely dynamic market and we expect to generate strong organic growth rates for years to come.

We're also projecting strong organic growth in Latin America, particularly in Mexico and Brazil, our two largest markets in the region. In Mexico, we expect organic tenant billings growth to be driven by multiple ongoing 4G deployments as well as accelerating contributions from the buildout of a new nationwide 4G wholesale network by the Altán Consortium. As a result, we expect that 2018 will mark the third straight year of double-digit organic tenant billings growth in Mexico. Further, the portfolio of urban telecommunications assets that we acquired from KIO Networks in late 2017 is off to a fast start, and we're excited about the near-term fiber-to-the-tower opportunity that we have in the dense urban areas, which house a significant portion of our Mexican portfolio.

In Brazil, where the economy appears to have stabilized, mobile data usage is growing quickly and our tenants are making significant multiyear investments in their networks, particularly on the 4G side. 2017 represented a record year of new business commencements in Brazil, and we expect 2018 new business to be strong as well, driven primarily by the deployment of 3G and 4G networks as smartphone penetration continues to rise. We expect to utilize our position as the leading tower operator in the country to capture a significant share of these deployments and drive strong organic tenant billings growth in 2018. For the LATAM region as a whole, we expect organic tenant billings growth to be between 9% and 10%.

Meanwhile, we expect organic tenant billings growth in EMEA to be between 6% and 7% in 2018, which is down from the around 9% in 2017. On a dollar basis, we expect the volume from co-locations and amendments to actually be higher than 2017 levels, but commencement activity is expected to be more back-half-of-the-year-weighted, lowering the overall organic growth rate. Escalators are expected to be down a bit lower as well due to the lower rates of inflation. The underlying trends in EMEA are expected to continue in 2018 and are supported by the strong application volume in the region as well as our pipeline for new builds, both of which were particularly strong in the fourth quarter.

Finally, as I touched upon previously, we expect our Asia results in 2018 to include significant impacts from accelerated carrier consolidation-driven churn. As carrier combinations such as Vodafone and Idea, Reliance Jio and RCom, Bharti Airtel, Tata, and Uninor are finalized, and as some of the other smaller carriers potentially exit the market, we expect certain redundant tenancies on our towers to be rationalized.

As a result, our outlook includes about $90 million of carrier consolidation-driven churn in 2018, comprising nearly half of the 3.4% consolidated churn rate that we expect for the year. Incorporating this churn -- along with lower levels of assumed gross new business commencements as carriers focus on integrating their businesses -- results in an expected organic tenant billings decline of nearly 8% in India for the full year, or a positive 3% to 4% after normalizing for the impact of the carrier consolidation-driven churn. So, on a combined international basis, we expect 2018 organic tenant billings growth of a positive 2% to 3%, or about 6% to 7% on a normalized basis, excluding the impact of this Indian carrier consolidation-driven churn.

Turning to Slide 12, before we move on to the other aspects of our outlook for the year, I'd like to take a slightly deeper dive into what we are seeing in India. As we've communicated over the last few quarters, we expect near-term churn in the market to be significantly above historical levels, driven by this carrier consolidation process, through which we think the current eight or nine wireless carriers will consolidate down to three or four.

As we progress toward this new steady state over the next couple of years, we expect to incur a total of about $150 million to $200 million of annualized consolidation-driven churn, which includes an expected in-year impact of $90 million in 2018 specifically, as I just described. There are a number of primarily 2G tenancies that have been made redundant given the ongoing carrier M&A, and we expect a significant portion of these leases to churn off our sites in the next two years or so. At the same time, we continue to see meaningful investments in new 4G networks by the carriers, particularly Reliance Jio, whose customers are using extraordinary amounts of mobile data every month.

Longer-term, we expect that the remaining carriers in the marketplace will be larger, better capitalized, and have improved spectrum positions which enable a more comprehensive deployment of 4G networks across the country to satisfy this insatiable consumer demand for mobile data in India. Given our portfolio of nearly 80,000 towers -- inclusive of our pending Idea and Vodafone transactions -- we think we'll be optimally positioned to capture the resulting incremental demand for communications real estate. So, to summarize, our long-term view of India continues to be very positive, but over the next couple of years, we would expect lower organic growth rates.

Moving on to Slide 13, adjusted EBITDA is expected to grow over 6% for the year, or by over 8% after normalizing for the impact of the India carrier consolidation-driven churn. This also includes a negative impact of about 3% due to the expected $125 million decline in non-cash net straight-line recognition. Our adjusted EBITDA margin is expected to be down slightly from '17 levels, primarily due to the India churn, lower straight-line, and inclusion of the lower initial tenancy Vodafone and Idea acquired sites in our outlook. Excluding those items, our underlying business would be driving margin expansion of nearly 2% in 2018. In our outlook, our cash SG&A as a percentage of total revenue is expected to be under 8%.

Meanwhile, 2018 consolidated AFFO and consolidated AFFO-per-share growth rates are expected to be around 11% and 9% respectively. Adjusting for the impacts of the India carrier consolidation-driven churn, consolidated AFFO growth would be about 13% and consolidated AFFO-per-share growth would be nearly 11% at the midpoint. In addition to operational efficiency throughout the business, this reflects our prudent balance sheet management and ability to control costs while continuing to strategically expand our asset base and invest in growth initiatives. Finally, I do want to note that holding current spot FX rates steady for the rest of the year will result in approximately $15 million in incremental consolidated AFFO or an additional $0.04 or so on a per-share basis.

As you can see on Slide 14, we added to our long track record of strong operational financial growth in '17 and wrapped up our Double Double initiative significantly ahead of our initial targets. In just the last five years, we've almost tripled our site count while entering seven new markets, have more than doubled consolidated AFFO per share, and have nearly tripled our common stock dividend per share. Today, we are well-positioned in the most populous free-market democracies in five continents, where we believe the secular growth trends in mobile will drive significant demand for communications infrastructure.

During '17, we worked diligently to invest and strategically enhance our portfolio while growing our dividend and committing excess capital toward share repurchases. We deployed over $820 million of CapEx, more than 80% of which was discretionary in nature. We also spent approximately $2 billion for acquisitions, increased our dividend by more than 20%, and simultaneously repurchased nearly $770 million of our common stock.

In 2018 and beyond, we expect to deploy capital in a similarly diversified, balanced manner. We have about $1.2 billion committed to pending M&A in 2018 and another $900 million at the midpoint of our outlook committed to CapEx. These expenditures include $270 million for the construction of new sites, primarily in our international markets, where Day 1 new build returns are typically in the double digits. Additionally, we expect to commit roughly $1.4 billion to our common stock dividend -- subject to board approval -- and deploy additional available cash toward a combination of share repurchases and incremental M&A. Combined with our prudent levels of leverage, we are well-positioned to use our multifaceted capital deployment program to enhance our total return profile.

Turning to Slide 15, you can see that our diverse 2018 capital allocation expectations are consistent with our historical practice. Since 2007, the first year in the Double Double timeframe, we've deployed approximately $39 billion of capital. This includes nearly $9 billion of share repurchases and common stock dividends, both of which we continue to believe are important components of our total return profile.

About three-quarters of our capital in this time period, however, has been dedicated primarily to investments in long-term growth or acquisitions in discretionary CapEx, including new site construction and augmentation. We've invested around $24 billion in acquisitions, including strategic transactions like GTP and the Verizon portfolio in the U.S. and a number of other acquisitions around the globe. Additionally, we've invested approximately $5 billion on discretionary CapEx initiatives while spending just $1 billion or so on nondiscretionary CapEx projects given the low ongoing maintenance requirements of our assets.

As you can see in the chart in the middle of the slide, more than half of our portfolio investment since 2007 has been directed toward expanding our presence in our largest market -- the United States -- which also generates the vast majority of our cash flows. The remainder of our CapEx and acquisition spend has been deployed to diversify our geographic footprint, with about 25% in our Latin America markets, 12% in EMEA, and less than 10% in India. These well-diversified investments -- along with our high-performing legacy portfolio -- have allowed us to generate significant cash flow growth across our business over the last decade.

We've grown cash from operations at an average growth rate of over 15%, from around $700 million in 2007 to nearly $3 billion in '17 and expect double-digit growth in this metric during 2018. Inclusive of that expectation, the business has generated nearly $21 billion in cash since 2007, and we believe we're in an excellent position to continue to grow those cash flows at compelling rates for years to come. Supporting this growth is our large base of contractually committed revenue, which today stands at over $32 billion.

Turning to Slide 16 and in summary, we generated strong operating results in 2017 and continued our long track record of delivering compelling growth across our key metrics. At the same time, we enhanced the company's long-term strategic positioning in key markets, continued to diversify our global footprint through selective acquisitions, and grew our common stock dividend by over 20%.

In 2018, we're focused on substantially the same strategic initiatives that have enabled our past success. We expect to drive efficiencies across our operations, evaluate accretive investment opportunities, explore additional avenues to drive future growth, and return cash to our shareholders through our dividend and share repurchase programs. Our expansive global portfolio positions us well to be the provider of choice for ongoing wireless network investments and we're committed to providing the best service levels possible to our tenants around the globe.

We're excited by the underlying trends we're seeing across our footprint. In the U.S., the FirstNet initiative and associated deployments are expected to help drive compelling organic growth, along with the continuing growth in mobile data usage across the industry. In our international markets, we're seeing rapid growth in mobile usage, resulting in very strong demand for our real estate, particularly in key markets like Mexico and Brazil.

In India, where we do have some near-term challenges associated with carrier consolidation-driven churn, the fundamental long-term demand story is positive, with Indian consumers using extraordinary amounts of mobile data. We think we are optimally positioned to continue to deliver attractive total shareholder returns in 2018 as we translate the secular growth in global wireless into AFFO-per-share and dividend growth. And with that, I'll turn the call over to the operator so we can take some Q&A.

Questions and Answers:

Operator

Ladies and gentlemen, we do ask that you limit each question to one. Our first question will come from the line of Ric Prentiss of Raymond James. Please go ahead.

Ric Prentiss -- Raymond James & Associates -- Managing Director

Thanks. Good morning, guys. Questions on guidance, if I could. Obviously, a lot of details here, but a lot of moving pieces. It looks like the straight-line adjustments were not much changed from last quarter when you put out your supplement, particularly in the U.S., at least. That implies no new MLAs. So, can you help us understand -- is FirstNet in your guidance? Is it ramped throughout the year? We're all trying to gauge how compelling the FirstNet growth could be or what it could do to revenues.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Hi Ric. The way we're adjusting FirstNet is in the broader context of one of our key customers' activities with us across the board. You've heard from them that they plan to make site visits to implement at least one -- if not more than one, in most cases -- technology upgrade. So, FirstNet is a piece of those truck rolls, so therefore, spiking it out is really difficult, but what we get applications that include FirstNet or not, AWS or not, WCS or not, et cetera, those all roll into our guidance through that customer line. So, in aggregate, we're looking at the whole picture. We're not necessarily spiking and aren't really able to spike out FirstNet on its own, but the customer who's got the deployment obligation can speak to that better than we can.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Just to follow on, you're right. The straight line in 2018 is a decline overall of about $134 million or $135 million dollars. In the United States -- as I mentioned in my remarks -- we did see a nice sequential growth in applications from Q3 to Q4, and as I also mentioned, we expect new business commencements in the United States to be at record levels. So, I think that gives you a sense of the kind of demand we're seeing in our U.S. business.

Ric Prentiss -- Raymond James & Associates -- Managing Director

Right. Jim, you mentioned that you'd extend term lengths when possible, so should we think that there are MLAs in the works? How do you guys view going a la carte versus MLAs in the U.S.?

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

We are agnostic about whether it's a holistic agreement in our terminology, whether it's a long-term MLA or it's site at a time, application at a time. We agree with each customer at any given point in time based on our joint and collective needs. In many cases, the customer is comfortable continuing on that sort of retail basis, if you will. We will seek to continue to get larger deals, but even on a retail basis, there can be extensions a site at a time introduced into those agreements as well. So, we're using all of the tools in conjunction with our customers based on where they are in their deployment plan and what they're most confident in pursuing at that stage.

Ric Prentiss -- Raymond James & Associates -- Managing Director

More on India, if I could squeeze it in. I think you mentioned the $90 million for India carrier consolidation churn. Should we think that normal churn in India should still be in the 4% range on top of that? Just trying to think through what total churn might be in India.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Ric, I think it's in that $20 million range, which is what it has been historically. But, yeah, I think your numbers are probably right.

Ric Prentiss -- Raymond James & Associates -- Managing Director

Okay. And then, gross is down a little bit in India because of the consolidation effort as well, so maybe high single-digit percentage growth on the growth side in India?

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Yeah, if you take a look at even '17 versus 2018, new commenced business is probably 10% to 15% below what it was in 2017 -- still very strong, but I think as a result of all of the activity in the marketplace, it's a little bit depressed as the carriers themselves are integrating and looking at all of their network plans.

Ric Prentiss -- Raymond James & Associates -- Managing Director

Thanks. I appreciate taking the question.

Operator

Thank you. Our next question comes from the line of David Barden of Bank of America.

David Barden -- Bank of America Merrill Lynch -- Managing Director

Hey, guys. Good morning. Thanks for taking the questions. Just another follow-up quick for Tom on guidance. You included the Idea and Vodafone towers in the numbers. Could you tell us what that's adding to the total pie? And then, Jim, just a couple strategy questions. First, is there a budget that you're mapping out for this innovation projects that you're looking at, and does that signal perhaps that you're going to go back and revisit some of these ideas like fiber-to-the-tower or distributed outdoor systems that some of your competitors have been exploring? Second, with what's going on in India, does any of this make you want to slow roll your incremental acquisitions of the Viom project? Thank you.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

David, let me take the housekeeping on the India acquisition. The Vodafone Idea -- as I said, we're assuming beginning-of-May of closure on that -- it's about $215 million of revenue and about $70 million of EBIDTA that we have in the forecast.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

I'll take the questions in order, David. On the innovation budget, if you will, we have a modest SG&A commitment. We've hired some fantastic people, including a corporate Chief Technology Officer, who's got a tremendous and long background in the industry on the innovation technology side. That's in the single-digit millions of dollars, which is included in our SG&A. And then, every other thing that we do goes through our investment committee process. It's got the typical process controls and valuation models that run out of this corporate office to assess whether any investment makes sense.

To speak to examples of when they do, I would really settle down into franchise opportunities are what we're seeking. What do I mean by that? Franchise opportunities have four or five attributes versus commodity real estate opportunities or investment opportunities for us. I'll just run through them really quick because that's the only way to answer your follow-on question there, which is how do we view the small-cell fiber environment? We will invest in situations where we can get our target return based on a franchise platform.

What does that mean? It means exclusivity around the asset versus -- a commodity would be an open field. So, our indoor dash projects -- we get exclusivity within the building. When we can get that on small-cell systems or fiber runs or whatever, we'll consider those as well, but we need exclusivity or something close to it.

Secondly, relatively few competitors and relatively small competitors are already out deploying and running those assets. So, the difference between Buenos Aires, Argentina, where there's hardly anybody running fiber-to-tower, hardly anybody running large, integrated fiber networks -- we see that as an attractive place because we can get a franchise there and we don't have any big competitors that are already in front of us.

So, if you look the U.S., for example, the big cable companies and the big landline telecom companies have each 300,000 route miles of fiber. These are significant, and you can't compete with that when you're the size that we would be in the United States, for example. So, we like relatively few competitors, relatively small competitors, and that also speaks to another franchise aspect. There's been relatively low prior investment in that asset in that place because you don't have the big competitors and you don't have the long-standing players.

Next is little competition with our customers. In the U.S., two of the aforementioned large fiber providers that we'd be competing with are two of our business customers, so that's something we look at hard. In other markets where we've begun to explore deploying fiber and done a few investments, like Mexico, our biggest customers don't have any fiber assets in the country. Telcel does in Mexico, but that's one of our smaller customers. Telmex has fiber. So, we look at who the customers are, we look at who the competitors are.

Finally, we want to be able to facilitate long-term contracts. So, when you've got few competitors, no large competitors, and you've got a first mover advantage on the asset, you can actually facilitate long-term contracts. Finally, you basically end up with future demand exceeding future supply at a multitenant opportunity, which is really what we're after. So, those are the franchise types of attributes that we look for, and that's how we're going to look at every tower investment, every small-cell investment, and every fiber investment -- through that lens. Is there anything else I missed, David, on your set of questions?

David Barden -- Bank of America Merrill Lynch -- Managing Director

That was very comprehensive, Jim. Thank you.

Operator

Thank you. Our next question comes from the line of Amir Rozwadowski of Barclays.

Amir Rozwadowski -- Barclays Investment Bank -- Analyst

Thanks very much, folks, and good morning. I just wanted to touch base again on the U.S. demand environment. Jim, in towns like where we think about holistically the activity levels of that one specific carrier that you mentioned -- it's embedded in your guidance -- is there any framework you can provide as to how you think that will filter through the course of the year? I think there have been some questions on the pace of activity levels through the course of the year, so any color along those lines would be helpful.

Touching upon the prior question on the focus from innovation, it sounds like really a more selective approach is how we should think about the expansion of your opportunities in some of these tangential markets. Is it fair to say that -- how would you think about M&A within that scope? I'm specifically thinking about any large-scale M&A that could be on the horizon to help transform the business in that direction of capturing those innovation opportunities.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

What's interesting about innovation -- I'll start with that subject, Amir -- is that we believe a lot of the innovation activity is going to happen on our core macro tower assets. So, we look at a four-dimensional opportunity set here. One is using our existing assets more robustly for existing customers. So, let me give you one example where there will be potential for these innovative distributed energy solutions for our customers in emerging markets where we can actually put an investment in, take out the diesel generator, reduce or eliminate that diesel cost to the customer -- which is about half the site operation cost, if not more, in a lot of these countries -- and get a higher lease rate for that. So, a lot of our innovation is going to drive toward this.

That's just one example of many that we can use our existing predominantly for to get either new customers on them or new ways of having our existing customers increase their billings with us. New customers on existing sites we've been doing for years, but we're actually going to step up the tempo on that because we think the opportunity set of customers in a 5G world is going to be dramatically wider than it is beyond our four MNOs in the U.S. and other MNOs elsewhere.

So, the large M&A requirement of driving this innovation program is not necessarily front and center, and whatever we do buy -- like the fiber assets and small-cell siting infrastructure in Mexico City, Buenos Aires, and Johannesburg -- all three of those actually meet the franchise real estate characteristics that I already talked about. Again, we expect tower-like returns because towers have the same franchise characteristics. So, we don't necessarily look at going outside of our franchise real estate charter when we do M&A in the innovation space, and frankly, a lot of it's going to come through our existing asset base as it is today.

As far as how the year will flow with each of our big U.S. customers, we're going to work that as a derivative of our application flow, which is already strong with many of the customers -- if not all of the customers -- in the U.S. in the first half. In February, we're already seeing -- as Tom said -- a really strong application flow already in the U.S., and as far as when exactly that revenue hits when there's an installation -- or a notice to proceed, as we call it -- and start billing, that'll play out through the year and we'll continue to give you those updates as we do our quarterly results.

Amir Rozwadowski -- Barclays Investment Bank -- Analyst

Thank you very much for the incremental color.

Operator

Thank you. Our next question comes from the line of Michael Rollins of Citi.

Michael Rollins -- Citigroup Research -- Analyst

Hi, good morning. Thanks for taking the questions. Two, if I could. First, in the past, you framed the amount of CapEx in the U.S. relative to where site lease and growth rates could shake out in a given year, and I was curious -- as you look at the totality of activity that you're expecting from multiple carriers that can invest in their networks for the different spectrum bands you mentioned, technologies, et cetera, where could you see site leasing growth peak at on a two- to four-year view? Is there a way to frame that sensitivity? And then, just secondly, if you look at the recent changes in the rate environment, does that affect where you want net debt leverage to sit relative to your target range, and what would it take in the rate environment for you to want to revisit how you approach your target leverage? Thanks.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Let me take that one first. Clearly, in our outlook, we've adjusted for the forwards in terms of what we expect for interest rate growth and interest rate hikes. We're sizably a fixed-rate type of a portfolio from a total debt perspective, and we do give some detail relative to fluctuations in debt in our supplemental detail, so I gave you a little bit more color there. But, given what we're expecting over the next few years, I wouldn't see candidly any changes in terms of how we're thinking of our overall capital structure. I think it's very balanced.

I think given our commitment to investment-grade and our desire for commitment to investment-grade, I think there are a lot of pools of assets that are available to us to be able to dip into to allocate, so I think that we have a variety of sources to be able to access. As I said, given what we're seeing, I wouldn't expect changes in our capital structure policies, if you will, but specifically, there are some details within the supplemental package that can give you some sense of what that might look like to the extent that there are major fluctuations in cost of borrowing.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Mike, on leasing opportunity over the next few years, we continue to use the same methodology to forecast as we have for the last 15 years or so, which basically limits our forecast to the current planning year. We have estimates over the planning cycle. We do a strategic plan, of course, but what we share with investors and make public is data-driven. In other words, what is the application flow we have, what is the announced aggregate capital spend in the U.S. or other markets by our customers, and what is the current trend of data growth in the market? So, if you touch on all three of those, the application flow -- as Tom indicated -- is very strong in the U.S.

Second, we have $30 billion-plus this year of announced CapEx by our customer base, which perhaps will have a tailwind over the next few years with the recent tax reform that's been implemented in the United States. Thirdly, on the data consumption side, we all expect another 30%-plus growth in that. I don't see any of these necessarily subsiding over the next few years, but once we get data as to the magnitude of each of those components as we roll into 2019, 2020, and beyond, we'll be able to give you some better forecasting for those particular years. But, in 2018, we've come out above 6% for organic tenant billings growth in the U.S. and we think that's strongly supported by the fundamentals.

Michael Rollins -- Citigroup Research -- Analyst

Thank you.

Operator

Thank you. And next, we'll go to the line of Amy Yong of Macquarie.

Amy Yong -- Macquarie Capital Partners -- Analyst

Thanks. I was wondering if you could talk a little bit more about the M&A pipeline -- I think you identified about $1 billion of spending for acquisitions -- and maybe some of the markets that remain core to you -- perhaps Nigeria, South Africa, and Europe. Thank you.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Sure, Amy. So, the commitment so far that Tom described is primarily for the Idea/Vodafone closing of those two transactions, but beyond that, we've got -- and always have -- many irons in the fire that we're evaluating. You pointed out some of the key markets where we would like to deepen our position, and we're going to do that selectively when it meets our investment criteria, and of course, it also has a lot to do when the major operators or private owners of towers in those markets have a willingness to sell. So, we don't have anything to report today, but I can assure you that we're actively available to evaluate and understand what the opportunities are in our core market.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Amy, to remind you, we are expecting in our outlook build-to-suits of about 3,000 towers, and we're building those underneath master lease agreements that we have around the world, and that's one of the highest rate-of-NOI yields, if you will, out of the gate. It's double-digit. So, that is committed in our outlook.

Amy Yong -- Macquarie Capital Partners -- Analyst

Got it. Thank you.

Operator

Thank you. Next, we'll go to the line of Matt Niknam of Deutsche Bank.

Matthew Niknam -- Deutsche Bank -- Director

Two quick ones, if I could. First, on the Stand and Deliver strategy, are there any specific targets for portfolio growth or AFFO-per-share growth to think about over this planning horizon? I know it's a long way out, but I'm just going to ask it anyway. And then, secondly, on the U.S., the slight deceleration in terms of billings growth -- it was about 40 basis points this quarter -- maybe Tom or Jim, if you could just clarify what drove the deceleration and how we can think about the pacing of growth or activity over the course of '18 in the U.S. Thanks.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Sure, Matt. So, our long-term aspiration over the 10-year plan is to continue to look to deliver double-digit AFFO-per-share growth catered over the planning period. That's why we have to start thinking now about what the future opportunity set is going to be five to ten years away in the 5G world that we're emerging into. So, that's our objective -- to keep delivering those double-digit AFFO-per-share performances while maintaining and growing our ROIC as well. So, doing both of those outcomes through smart asset growth, innovation, and operational execution.

As far as the U.S. pipeline and new business rates of change, they do fluctuate quarter to quarter based on budgets and other customer-driven schedules, including deployment schedules -- believe it or not, weather, things like that -- and so, it's going to vary. This is not a major variation and there are some MLA provisions -- not only the U.S., but in other markets -- where certain large payments are made in certain quarters every year, and that can actually throw off the trend lines a little bit.

Matthew Niknam -- Deutsche Bank -- Director

Got it. Thank you.

Operator

Thank you. Next, we'll go to the line of Phil Cusick of JP Morgan.

Richard -- JP Morgan -- Vice President

Hi. This is Richard for Phil. While you provided significant details in the prepared remarks with all of the moving parts in India, can you give us a little more color on how we should think about gross activity levels and the pacing of churn over the next few years? Should it be relatively similar or is 2018 the most negative year? Also, could AMT sign an MLA with the carriers to mitigate the churn headwind from consolidation?

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Just on the churn side, the normal churn -- I think Ric had asked that question before, or Dave -- it's in that $20 million-plus -- it's in that typical 4% range. That's the general kind of normal churn that we see. As I mentioned, we do expect that additional $90 million of incremental consolidation-related churn. I would expect that to be at a high-water mark for the churn levels and start to subside going in, but as I said -- I did mention the $150 million to $200 million range, so I would expect similar levels, particularly when you look at the carryover into 2019 because that churn that we expect is going to happen throughout the year, so you're going to see the follow-on impacts from an organic growth perspective and tenant billings perspective in 2019.

And, over the mid- to long term, as I said, Richard, this is a reordering of a market that makes incredible sense, and it will result in most likely four major mobile operators and two to three significant tower companies. That is the industry structure very similar to what's in the United States, and that industry structure in the U.S. has been a long-term benefit for the tower sector, so that's our expectation in the round. But, of course, along the way over the next couple of years -- and already, frankly -- we are in negotiations with our big customers and have extensive and ongoing relationships with each of them, which I'll highlight for just a minute.

First of all, you've got to remember -- on the tower side, the supplier side of this equation, we are the No. 1 independent tower company in India and expect to remain so for quite some time, meaning that we are unaffiliated. We have existing contracts with all the big players, especially with the three to four that will remain as major operators at the end of consolidation.

If you go down the list, Reliance Jio is an extremely valuable and important customer of ours with lots of new business coming through even today. Airtel -- we have an extensive relationship both in India and Africa. Idea/Vodafone -- we are consolidating their non-Indus towers into our company, and there is a commercial agreement, of course, that goes along with that beyond even just those towers, so along with BSNL -- where, again, we've had a long-standing commercial relationship -- we are going to be in an excellent position with each of those four carriers that we expect will be driving the market over the next many decades in India.

These companies will have the wherewithal, the financial capability, and the scale -- these companies are going to have hundreds of millions of customers each. They have the scale now and will have the scale once these consolidations are completed on the operator side to drive 4G into over a billion handsets in that country, and the network requirement to serve that is going to be enormous, and we're going to be well-positioned over the next two to ten years to take full advantage of that once consolidation wraps up.

Richard -- JP Morgan -- Vice President

Great. And, a quick follow-up -- in terms of the new build-to-suits, should we expect any difference in terms of where you're building those given the consolidation in India, or should we expect it to be pretty steady with what we've seen in the past?

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

It's pretty steady with what you've seen in the past. I think we've seen a pickup in Latin America given some of the demand there, but pretty consistent with what you've seen in the past.

Richard -- JP Morgan -- Vice President

Great, thank you.

Operator

Thank you. Next, we'll go to the line of Simon Flannery of Morgan Stanley.

Simon Flannery -- Morgan Stanley -- Managing Director

Great. Thank you very much. Good morning. Tom, on that $90 million for this year, how much visibility do you have over the exact timing and exact amount? Is this a worst-case scenario or is this the middle of what you could expect? I assume in some cases, the companies haven't finished their RF planning and deciding exactly what sites they're going to keep and let go. And then, coming back to the 10-year plan, Jim, what are you thinking about in terms of activity beyond the major carriers? Are you starting to see any more activity there from the big tech companies or others that are looking to deploy more beyond the traditional wireless LTE opportunity? Thanks.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Simon, fair point. What we've assumed in the plan is pretty well balanced first half versus second half, so I wouldn't expect a lot of exposure, if you will, throughout the year given those kinds of expectations. As Jim said, to the extent that there are changes, we'll continue to update, but we think that's a pretty fair assessment of when it would occur. There can be a month slip here and there, but as I said, it's pretty balanced between the first half and the second half.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Simon, over the long-term plan, I did speak to some of the sectors that we are already engaging with to understand what their direct -- and, I'll call it indirect -- opportunity is for us. So, if you just think about EDGE data, for example -- data center companies, entertainment companies, et cetera -- that might want to have their content closer to the edge of the network and to the consumer to reduce latency and improve delivery -- and also reduce backhaul costs, frankly, and core data center costs -- those are a whole range of companies that could utilize tower sites, ground stations, ground space at our tower sites for stations that would then have EDGE data. We're doing some of this in other countries already. So, that's one category.

A second category we're involved in already, which is aerospace, and that's the delivery of either internet service to airplanes -- we have a large customer that does much of that in the U.S. already -- but there are going to be other technologies that you may have even read about this week using satellites, combinations of ground stations, and other things that will bring a new generation here. But then, there's also the autonomous air vehicle opportunity and who could be the customer in that circumstance. It could be a defense contractor, it could be a delivery company such as Amazon that would need to control drones outside of line of sight, which requires -- we think, and the FAA seems to think, now -- a tower-based terrestrial control and navigation network. So, these are the kinds of customers we're looking at in the future.

And then, on the potentially indirect side would be autonomous land vehicles, whether they're trucks on the freeway or the ubiquitous Google car driving around Mountain View. When you do any of those kinds of things at scale, there needs to be a whole new architecture put in place. Mobile operators may do that, municipalities through smart cities may do some of this, or the actual auto companies or electronics companies themselves may have some siting needs as well. So, we're going to work our way through all of these and many other sectors with the players in those sectors to figure out what they're going to need for siting and whether it's going to come through us directly as an infrastructure provider or through mobile operators as another of their lines of business, but then, what are those operators going to need as far as architecture from us. So, that's how we're looking at it.

Simon Flannery -- Morgan Stanley -- Managing Director

Thanks a lot.

Operator

Thank you. And, our last question will come from the line of Batya Levi of UBS.

Batya Levi -- UBS Investment Bank -- Analyst

Great, thank you. At a high level, you used to guide to 200 to 300 bps faster growth internationally versus the U.S., and now, excluding India churn, international is growing similar to the U.S. levels. Can you provide some color on your mid- to long-term view of these international assets? And also, a follow-up on India -- any updates on your thoughts to acquire the remaining stake in Viom? Thank you.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Batya, as I mentioned before, I think there are a couple of things that we're seeing in 2017. If you look at the Latin American market, really solid growth there -- 9% or 10%. It's a bigger business, but as I said, we're still seeing really solid growth in the marketplace, and as a matter of fact, even if you include the build-to-suit activity -- again, higher expectations in '18 than you saw in 2017.

To me, it's down a bit principally because of the two things that I mentioned. We're looking at record new business in the marketplace, but it's actually going to be a bit more back half-loaded, so that's going to have 100 bps or so of decline, and you are going to see escalators fluctuate with rates of inflation, so we're actually seeing lower rates of inflation in the marketplace as well, which is bringing down -- it's probably another 100 basis points or so.

On the India side -- yes, we are -- we talked about excluding the churn, but it's also impacting the gross. While it is still strong in 2018, it is below where it was in 2017. The new business commencements are 12% or 13% below. As Jim laid out what we expect is going on in this market over the next several years, we would expect those growth rates -- that gross new business -- to reignite and get back to those levels that we saw even over the last couple of years.

So, I think longer-term, we would absolutely expect the growth rate from an international business to be north of where our U.S. business is. Given where they are from a technology perspective, from a smartphone penetration perspective, all of those things would line up to suggest that there is going to be heavier investment being made into those markets and will outstrip even the growth that we're seeing in the U.S. market.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Also, Batya, we had a little bit of a mix change recently when we added France, which is in our EMEA region. It was purposeful for many reasons, but one of them was to rebalance emerging markets and developed markets in that region, so, therefore, the growth rates moderate the total a little bit just by adding another developed market into the mix. As far as our interest in TIPL or Viom, there's a series of puts and calls over the next one to three years.

There are four parties involved -- there's ourselves, Tata Teleservices, Macquarie, and IDFC, which is a local investment company in India. Between the four of us, we'll all be discussing everybody's interest in maintaining, expanding, or reducing ownership stakes over the next one to three years, and we'll report that as we go, but actually, there's a fair amount of interest in some of the parties to remain, and we'll evaluate that and negotiate it over the next one to three years.

Batya Levi -- UBS Investment Bank -- Analyst

Okay, thank you.

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Great. Thanks, everyone. That concludes the call this morning. Again, thank you for joining us. If you have any further questions, please reach out to Igor and the team, and we look forward to seeing you soon.

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Have a great rest of the week, everybody. Thank you very much. Bye-bye.

Operator

That does conclude our conference for today. Thank you for your participation and for using the AT&T Executive Teleconference service. You may now disconnect.

Duration: 74 minutes

Call participants:

James D. Taiclet, Jr. -- President, Chairman, and Chief Executive Officer

Tom Bartlett -- Executive Vice President, Chief Financial Officer, and Treasurer

Igor Khislavsky -- Director of Investor Relations

Ric Prentiss -- Raymond James & Associates -- Managing Director

David Barden -- Bank of America Merrill Lynch -- Managing Director

Amir Rozwadowski -- Barclays Investment Bank -- Analyst

Michael Rollins -- Citigroup Research -- Analyst

Amy Yong -- Macquarie Capital Partners -- Analyst

Matthew Niknam -- Deutsche Bank -- Director

Richard -- JP Morgan -- Vice President

Simon Flannery -- Morgan Stanley -- Managing Director

Batya Levi -- UBS Investment Bank -- Analyst

More AMT analysis

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

10 stocks we like better than American Tower
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Tower wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 5, 2018

The Motley Fool owns shares of and recommends American Tower. The Motley Fool has the following options: short April 2018 $130 calls on American Tower and long January 2019 $80 calls on American Tower. The Motley Fool has a disclosure policy.