Q2 2021 Anterix Inc Earnings Call

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Yeah.

Good afternoon, and welcome to the <unk> second quarter Investor update call.

At the time, all participants of the and placed on the listen only mode and the <unk>.

The open for questions and comments after the presentation.

I would now like to turn the conference over to you and Natasha of Ceccarelli director of Investor Relations and corporate communications.

Please go ahead.

Good afternoon, everyone and welcome to the entirety of.

Second quarter fiscal 2021 Investor call. Joining me today are more of Brian Our executive Chairman.

GAAP Swartz, our president and Chief Executive Officer, Ryan and Gerbrandt, Our Chief operating Officer, and Tim Gray, our Chief Financial Officer.

Before I turn the call over to Rob. Please let me remind you that any statements. We make during this call that are not based on historical facts constitute forward looking statements and our actual results could differ materially from those implied.

A discussion of the factors that may affect our future results.

Contained in our SEC filings, which are available on the Investor Relations page of our website and.

And that's always a replay and transcript of this call will also be made available on our website.

Following our prepared remarks, we will open the call to take questions using the process. The operator will describe.

And with that I'll turn the call over to and targeted president and CEO Rob Schwartz.

Thanks for talking and good afternoon, everyone.

So the will provide you with an update on the key elements of our continued progress and momentum since our last call.

Given that this last call was just about two months ago, right and I will provide a brief update and then we'll go to Q and able to for team.

With that lets dive into the details.

They were going to cover a few key topics first of all provide an update on our near term customer contracting process. Then I'll address the continued progress of our top down the state and federal strategy, which when combined with the tailwinds of increasing private LTC market interest is providing for a catalyst for potential collective movement for the utility industry for spectrum adoption.

Right, well, then follow the disgust or customer pipeline and highlight the key indicators of progress you told the momentum we're seeing.

I don't remember it is top of mind with many of the Investor. So let me start with an update and where we stand.

It's fair to say ER contract completion process has been slower than we had anticipated.

However, based on the continued progress we remain confident that we'll get the his first broadband customer contracts line shortly.

The first one is always the hardest and one of the approval process is not in our direct control. The execution process continues to move forward with sponsorship from their top leadership.

And we do continue to remain confident and our ability to report to the three signed agreements for fiscal year and March 31st 2021.

With that said, it's important not to lose sight of the fact, we're pioneering with average and others, the new and revolutionary idea for the utility industry.

That will have a major positive impact on our nation's electric grid and will establish the differentiated and sustainable opportunity for and terex, but new innovation with large and risk averse institutional companies takes time.

The result, and value creation, we believe is worthy of the patients required.

As the team we're used to overcoming challenges, even those that some seem to think or impossible to achieve.

Just like the considerable patients that were sort of required during the FCC process. We are confident that once again, the reward will be well worth the wait.

In parallel we're also making strong progress with other near term perspective customers and despite cope its impact and slowing decision cycles, we're experiencing strong demand.

As can be seen through additional utilities and have recently been publicly vocal about their interest and private LT and specifically 900 megahertz.

New York Power authority or NYPA, the largest the public power utility in the U.S. recently announced the pilot of 900 megahertz broadband as part of its goal of becoming the first and and digital utility.

As part of this announcement night the CEO Gil can you only son I interviewed on an energy central podcast discussing Naples, Digitization plan and the requirement for private LT. During the interview Gil was quoted as saying.

We are excited and our partnership with and Terex and we're looking for to having the successful pilot because our debt really is to deploy this as quickly as possible statewide.

And then other public event I participated and the fireside chat with the eye to lead from ex on one of the nation's largest investor owned utilities companies in five states and the district of Columbia.

At this fierce wireless event he publicly identified for the first time book Exelons expenditure of Merrill experimental use of 900 megahertz and the strong interest and private LTV.

Additionally, Dominion energy the Investor owned utility operating and 16 States was the <unk> entity to file for experimental license. The pilot 900 megahertz private LTV and their filing Dominion explained that they plan to evaluate diverse use cases, including the workforce mobility substation communications.

And telemetry and automation.

Now I'd like to spend a few minutes, providing you with an update on the key market forces and our top down initiatives that we're leveraging to organize and foster the collective demand for our spectrum.

As the result of the hard work of the and Terex team for.

And also by the recent conclusion of the CBS auction and August we're seeing a growing industry ecosystem focused on the benefits of private broadband networks, including from enterprises across numerous verticals and from major vendors.

Fiercewireless recently, well summarize the compelling industry rationale and stating quote for many enterprises private networks offer more control and security and data infrastructure stay on premise and traffic doesn't have to go over of public network.

And while our team remains laser focused on clothes and customer contracts. We are leveraging this growing industry interest to talk with potential strategic partners for.

We're exploring ways to work together to create even more compelling solutions, and and turn and partner capabilities and heft to accelerate the adoption of 900 megahertz private networks.

We're also making progress on our top down programs aimed and impacting the utility industry as a whole at the state federal and industry Association levels.

By moving the industry towards a collaborative initiative of nature of a nationwide network of private LT networks, the value and the function of this collective approach could be considerably greater than the sum of the parts for all involved.

We refer to this concept as the network effect, which was highlighted in the concept pay for recently published by Navigant Guide House articulating the vast scale benefits that are generated when the utility industry works together and the deployment of private LTE networks.

The paper, which is accessible on our web site very effectively explains the many benefits of this network effect and I encourage you to read the.

The Prime example of one of our collective initiatives that were involved in with other industry leaders is raising awareness of the importance of allocating some of the expected federal infrastructure funding towards building private broadband communications networks.

After the new year Congress and the by the administration are likely to consider several pieces of legislation to authorize funding that could help accelerate monetization of the electric grid.

The framework and funding amounts of these bills is difficult to fully forecast at the moment. However, it's anticipated that and environmental policy renewable and distributed energy broadband deployment infrastructure upgrades grid modernization and cyber security will likely be key components of any legislation.

We believe especially during this time of covered that there is a strong case for the allocation of economic stimulus funds to enable these near term job producing the opportunities to build private utility broadband communications networks in concert with a number of organizations and thought leaders, including our own Advisory Council and Terex has been educating per.

Policymakers regarding the link between a modern grid and modern communications.

Of funding mechanism that recognizes the value of private broadband can be instrumental in driving collected the industry action and accelerating the use of our 900 megahertz of spectrum.

So before I turn for the Ryan.

Close with these thoughts.

Well follow the Finalization of long term customer contracts takes time I'm more enthusiastic than ever about where we are and where we're going and and terex.

Industry demand for private broadband networks is growing across sectors. We're on target to deliver on our goals, we have a growing and experienced leadership team that's executing on our plan and we have a balance sheet, that's well capitalized book with cash and spectrum and remains debt free and.

With that I'll turn it over to Ryan.

Thank you, Rob and good afternoon, everyone.

As Rob just highlighted we continue to make marked progress with our pipeline just a few months since our final actionable FCC rules became effective.

And the put it in perspective as we shared on our last Investor call. The combined service territories of the utilities and our current customer pipeline represent over 75% of our nationwide spectrum value.

While progress has not yet the executed customer contracts that we all anticipate there.

There are many other clear indications from our pipeline and and the industry's increasing forward momentum that we are seeing which I will speak to today.

This is the long game and we feel the momentum we are building for private LTE networks is precisely what we have been working to achieve.

We are focused on ensuring we are well positioned to capitalize on the is growing demand.

Availability of scarce low band spectrum on which to build private LT networks has created opportunities with the multitude of strategic entities, including carriers and technology vendors as well as cloud and edge providers.

The introduction of broadband and the utility communications will open new opportunities for utilities involving cloud and edge computing machine learning and artificial intelligence as well as the capture aggregation analysis and action on data.

There was a clear message across the us growing ecosystem, which is rooted and collect of private LTE adoption built upon our spectrum operating.

Operationally, we continue to execute on strategic and opportunistic spectrum clearing activities.

And the first half of our fiscal year, we have initiated or completed agreements with 35 license holders.

To date and this fiscal year, we have spent approximately $8 million and have another $2 million committed to complete clearing transactions keeping us on track relative to previous guidance.

This activity is an important measure of progress as we work to clear of spectrum for customer use.

And in terms of overall readiness. We also remain focused on investing and our teams growth as we have recently expanded both our leadership and utility sales team to support our growing opportunity.

Now I would like to expand upon what we shared with investors previously and describing our customer pipeline with the goal of providing further visibility into our sales cycle.

As the result of the Finalization of the FCC rules and.

Strong fundamental sales process and a doubling of the sales team I feel confident in our progress and turning what were initial customer conversations into our fully validated sales funnel.

Within our pipeline of utility customers, we map each respective customer journey through three phases.

Phase one is prospecting and qualifying phase two its pursuit and proposal and phase three is negotiation and commitment.

We are seeing prospective customer account distribution across these phases of our pipeline roughly split 70% to 80% and phase, 110% to 20% and phase two and about 10% and phase three.

Our pipeline is just where we would anticipate it to be at this stage of our plan and from my experience selling and similar complex utility enterprises, I have confidence and our president position and trajectory to achieve our state of fiscal year and goals as well as our fiscal year 2020 for financial guidance.

It's important to note the due to the typical multiyear sales cycle for these types of customers, we're not expecting to see the changes to the pipeline phases quarter by quarter, even if we are right on track.

Let's now spend a few moments covering some of the key indicators of progress we're seeing within our pipeline.

Across the nation. The majority of electric utilities are acting to modernize the power grid to accommodate the rapid technological changes happening and the digitization generation transmission and distribution of electric power.

As the embark on this journey and they're developing grid modernization business cases and are engaging their public utility commissions early on to develop supporting budgetary and regulatory frameworks for the long term capital programs.

We view these grid modernization plans is a strong validation of the existing awareness and demand for private LTE communication systems underpinning modern grid enhancement.

To give you a sense of the scale of these grid modernization efforts for the Edison Electric Institute or E. Hi, and Investor owned utilities are estimated to spend approximately $120 billion of capital per year, and both 2020 and 2021.

Spend for improving telecommunications infrastructure is an essential component of these investments.

Approximately two thirds of our prospects in the pipeline are either currently developing their business cases and grid modernization plan now we're already have them and plays.

Further progress of our pipeline can be seen as we monitor prospective customers issuing horrifies for RFP and deploying pilots through.

Through these efforts we partner with customers in many cases at the very beginning of their journey provide.

Providing and terex with the unique ability to act as a consultant as the utility navigates through the decision making process.

It also gives us the valuable opportunity to directly learn from the customers along the way.

Well there is not an exact blueprint all utilities follow during this phase and the time it takes each customer to work through it varies they.

They do identify early on the requirement for private spectrum.

One way utilities and gauge is through testing are running pilots using experimental licenses with eight filed to date.

Additionally, some utilities may choose to move directly to contract.

More broadly roughly one third of the total prospective customers and our pipeline are either actively working on these sorts of initiatives for have completed them already.

The intricacies of the final contracting phase a relatively standard practice standard practice for these risk adverse entities as the work to follow all necessary internal processes and securing final sign off from stakeholders.

And this final stage of the pipeline the relationships, we have built and advisory role. We have played and getting to this point gives us confidence and getting these customers to execution of definitive agreements.

We have also benefited from what we have learned along the way and of apply these lessons to continuously improve our sales and business develop development perspective, as we continue to shape and tailor our offering moving forward.

We have our foundation in place with a world class sales organization and sales process, enhancing the existing and keryxs teens knowledge and capabilities.

I am excited.

As we are on the brink of putting our valuable 900 megahertz spectrum to work, leaving a lasting mark on our nation's utilities.

That concludes our prepared remarks, I'll now turn it over to the operator for questions.

Thank you, ladies and gentlemen, the floors and open for questions do you have any questions or comments. Please press star one on your soul and at this time, we asked about posing your question. Please pick up the handset listing on the speaker phone to provide the optimum sound quality once.

Once again, please press star one if you have any questions. Please hold while we pull for questions.

And the first question is coming from Mike Crawford and Mike. Your line is lives. Please announce your affiliation and pose your question.

Thank you, Mike Crawford from B. Riley Securities.

And.

If if you achieve your constantly.

The stated goal.

Total of having two to three licenses and he and by March 31st what.

Conclusions should investors or.

Relative to the value of those leases from.

Relative to your 125 to 150 million royalty trying to get by the tweets leads for.

Im sorry five.

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Thanks, Mike I appreciate the question.

A a couple of thoughts.

First of all the feel for the rest seem can jump and behind me here I.

I think relative to the first few contracts as a couple of of important things. One is obviously as I mentioned in my comments and these are the pioneers who are the ones that we've been working with for quite a while and are really helping shape. The collective action by the industry. So while it's the tip of the iceberg, we're really confident that it will and.

Enable others to be able to transact and transact with it with the with the model and understanding of how to other approach it and as we've said before uniquely this industry, we're going to see that the sharing continuing where there's three till the broadband alliance, where some of the other collective initiatives that I talked about.

Well, we can't get into the specific economics of of obviously the first transactions.

And especially because as you heard from Brian.

We've got a broad pipeline there is that there is a lot of opportunities and that and that overall pipeline you.

You mentioned, you know truly 75 per cent of for spectrum value that really is within the within the full pipeline. So it's hard to predict exactly whats going to come through first but we're confident that really from that of initial transactions and the information, we'll be able to share that you'll really be of us getting a good mark on on the value of our.

Nationwide spectrum asset and also the the cadence that we're going to continue to be able to do.

The deliver to investors.

And Rob just okay of said and I'll, just add and make the again the the seemingly meet the two to three that fits in with what Weve staffed for that sort of business model and our 2020 for projections.

Okay. Thank you Tim other steps one follow up so.

Previously you said and we didn't expect the license cloud and couple of weeks today and we can expect the license close shortly I also here the.

Previously, we it was fairly clear the ever and was expected to be the first licensee and but no. Rob here, you said and it's hard to predict who will be the force.

License is that correct and is there any other.

The color you can put around but what you mean by the shortly.

Sure.

And look you know Mike we appreciate your and other investors patience here.

As I mentioned, you know wall were you know things are happening slower than we anticipated, we're still well on track to be able to deliver customers soon as to the restated or target by fiscal year end and so we're not fully in control of this process right. Obviously, we're working with large institutions that have complex.

The utilities fortnightly article there Chief Digital information officer was and there as well and it also spoke and Edison The electric Institute about about their intentions and so.

We're we're confident that they're gonna move forward, along with others, it's hard to predict and.

And and the horse race of who comes across the finish line first but as you know where we're targeting multiple horses to come across that line by March 31st So it's a long game for us and and.

And we know it takes patience and and as I mentioned the patients very similar to like what we had to do with the F. C. C process, which also wasn't and our complete control, but our experienced and be able to drive. These complex processes to conclusion, I think we've demonstrate and the past and we're confident about our future.

Okay. Thank you.

Thank you and the next question is coming from James Ratcliff changed your line of his life, Please and answer affiliation and pulled your question.

Hi, James back with a debit card and I.

Two of if I could first of all the.

And the Amazon and topic again, and you call, we can get out of it.

What changed and the <unk>.

Alright, and time or or what part of the process you thought it was going to complete and the week that hasn't gotten done yet and.

And the second let me went down the utility Apple opportunity and he update on the potential opportunities for the spectrum of is outside of the of the utility footprint. Thanks for sure.

Sure I James I'll I'll take the first question of the Ryan you Wanna take of cricket the second on Amor and as I, just really talked about it's not the anything change. It's just the it's just process and it's the approval process. Unfortunately, because we're under the N D. A I can't give any explicit details of of of what's going on there behind the curtain, but again.

Were highly confident that we're gonna be able to deliver that one soon and.

And so.

Right and you wanted to take the second question.

Yeah of happy too. So you know obviously, if the state and you know the the the center of our Bullseye remained on the rest of your own and utilities for good reason you know we we do see you know of largely through some of the associated partnership conversations and and and other affiliations that we're developing and the industry, you know and interest and desire.

Across a few other sectors you know for application of 900, megahertz, and and private L T networking and.

You know a couple of those still live within the utility domain and you know the certainly similar characteristics outside of what we traditionally have been talking about with the electric utility space, you know in and around applications for gas and water both as a potential opportunity for some of our customers directly indoor additional opportunities and for us to be able.

Two of engage it and too, but but more broadly as we think about just industrial sectors and general you know I think other opportunities that the partners have a stronger footprint into that open opportunities for US you know more live in the in the realm of you know of future things to look at it in terms of oil and gas and and and just enterprises broadly.

Great. Thank you.

Thank you and and the next question is coming from Simon the salary Simon Your line is rise please and answer affiliation and pose your question.

Alright, good evening of Morgan Stanley.

So thank you for the the <unk> again, the target of two to three by the end of the year.

When should we expect the revenue starts to start to be recognized and have you had any more updates of of what the form of the cash might be.

Designer of the utilities for uhm upfront payments or for longterm monthly or quarterly payments and.

And then on the pilots, perhaps just take us through from the ninth of announcements how long does it take them too.

Set up the pilots from the pilots evaluate the pilot and then.

It is a side of six or nine months process of what's the normal time there. Thank you.

Sure send and this is Tim I'll I'll take the first part of that on the on the timing of revenue, we expect and the the middle of next calendar year to start to recognize leasing revenue from the set you know.

Two to three that would be green and this fiscal year. So that's the timing as far as as far as that goes.

And let me turn it back over to Ryan and to talk about the pilots and the cash flow.

Oh, Oh, sorry for Simon and I'm, sorry, I forgot that one yeah. So so it's still early yet and the conversations with the customers, but nothing has changed from what I said last quarter of about you know and emerging trend of the utilities for capitalization purposes wanting to prepay all of our some portion of the the least upfront as.

We deliver spectrum, but again, it's it's early enough and the kind of phasing of the pipeline and negotiating with customers, where I don't know, whether that's gonna be a permanent trend or it's just the first few potential customers.

Okay. Thank you.

Great. Thank you <unk>, let me tackle the pilot question a little bit any of the let me start first with <unk> pilots come and you know obviously a few different flavors you know I think the best way to think about them is you know two of the two of the end of the spectrum per Se are you know kind of full on pilots were field implementation happens and networks actually get stood up.

And the other contrast, and scenario and you know is more of of proof of concept of kind of model and we see all of those varieties and you know and and the spectrum and between and and a lot of these engagements on the shorter duration you know, it's not uncommon and that will see you know proof of concept kind of of valuations moving the process forward the <unk>.

Happens more and the scale of one to three months and in terms of of more rapid evolution and validation of some of the use cases that they're focused on and that testing generally speaking of you know I I don't think you're too far off and and in terms of of the broader scope of pilots and.

You know and looking at I'd call. It you know probably more of a three day <unk> nine month range, depending of light on the complexity and and when I say complexity. It really means the the variety of the use of cases that they're looking to test and validate uhm is the working through what that piled process is uhm, but as it is you heard and and Rob's remarks, you know <unk> reflective of and.

<unk> and is Gil state of the you know there there's a strong ambition and a lot of these accounts to to get through that pilot phase as fast as possible because there's definitely a sense of urgency on the other side and so I'm trying to push forward and brought her of strategic initiatives and and really Wanna move that ball forward aggressively the other point that I'll, just make you know and.

The reference us a little bit of my and my remarks around just the blueprint you know and the standardization of how utilities work through this journey. It's important to note that not all utilities and we'll even do pilots and this is one of the attributes that we see what the maturing market. While you know today I wouldn't I wouldn't suspect you know, we'll see you know as we have a lot of activity in terms of the.

In terms of testing and pilots and there's a lot of sharing that those go on that we've talked about and utilities will have different paths of to work their way through you know and and we do anticipate the only factor working on some now that that are not going through pilots.

Okay, Great and and maybe just one on on the Uhm F C C and <unk> are.

Are you and do.

Do you need to buy much and the way of of license was to fulfill the the two to three contracts you're hoping to sign here shortly or are you pretty much already physician for that.

I think some of it we we gave some information and and historically and continue to update on a retuning progress uhm, we depending on the market. There of those that are more and more complex and those that are simpler, but we're well underway and you know doing the returning necessary to be able to deliver the spectra.

And and the time frames and is we're seeing and and the kind of agreements that we're working on so and and Rob I'd say, well, but I think it's worth mentioning that most of these kind of and played that we start off delivering 1.4 megahertz, which is the heck of a lot easier and faster and then we give ourselves time as a.

The ploy to round up the remaining spectrum to get to the full three by three.

Thank you.

Thank you and the next question is coming from George sudden and Georgia line of slice of cheese, and and cheerfully Asian and pulls your question.

Craig how and and I was most of intrigue with the messaging around the the collective adoption as you explained it and I'm wondering if and Morgan in particular with you know the historic assumptions for what this <unk>.

Become relative to what a collective adoption might look like and what of network of networks might look like can you just explain what the difference might be and how that's changed recently.

Yeah sure. Thanks for the question George Uhm. This is Morgan, let me, let me begin by saying that.

And it said the heart of our proposal to the the critical infrastructure industry utilities in particular that the heart of our proposal that each of them wants to have.

It's close to the total control of their system performance as they can and that's why they are inclined and have been historically to go with their own private system. So they determine priority of communications day determined backup they determine coverage day determine all of the performance characteristics and.

Nothing we would ever propose to the industry varies from that however.

And <unk> each utility makes the decision to put in L. T E facilities at 900 megahertz for its purposes.

Yeah. It is a key part and enabling its neighbors neighbors of joining and also the neighbors broadly defined as the nation and having much graders economies of scale. So as we pointed out there is a very interesting new pay for that guardhouse of put out that's on our website that.

Has to do with how do you look not not.

Bottom up as as the as we sign each of these leases and not how do you look at that but how do you look at the aggregate and the color activity the connectivity and connectivity of the of the industry as you and she put all of the these things together and when you start to do that.

And you start to look at the evolution of thinking from a core.

That would operate the the L T facilities to cloud the blood operate them and adding all of the additional elements of complexity that any particular utility itself might not want to develop but the industry would benefit tremendously from the the book.

And he said all along is that the the greatest opportunity for the until the industry is that L. T E as and mature developed technology with the chipsets and and whatever that are well well developed and will down the cost curve, but they can innovate and the space, particularly if they act collectively and and and <unk>.

Look at it not the way I like to put it sometimes as I say of course, there isn't a United utilities of America, but.

But if there were of United definitely for of America. That's how it would be operating of the operating nationally to get economies of scale and to get the ability to certify equipment and having interchange ability of of all of these things and to have the very best credit.

<unk> cyber security expert not embedded and every one of the.

Several hundred utilities that are likely to be of deploying us, but collectively and so we're we're doing what we can through the advisory we put together true working with narrow actor working with the E. I for working with the a number of these other associations to get to get the word out that yeah.

We're very interested and and and we thank the right way to go with the negotiate of long term leases with individual utilities, but as that begins to happen and and Ryan talk about this also and that begins to happen the obvious opportunity for them to operate collectively and everybody the benefit of everybody else.

Becomes compelling and that auto accelerate the process and then if you've segue off that too is there gonna be congressional Act.

Activity after the after the beginning of the year and which infrastructure funding is going to be made available. It seemed like a bipartisan consensus that it will be and if that happens. The question is will.

Significant capital will be made available coming from the federal side, which is not typically the way. It is kind of this industry, but from the federal side too.

Accelerate to encourage to to push the various I owe us and also the municipals and the call odd to embrace a new more secure underlying grid technology like L. P. E at 900 megahertz to make the grid more secure and.

More resilient more reliable so what we're saying is as inter ex we can't just work bought him up cause we have been doing all these years. We also have to try to help <unk> where of course, only one voice and that ecosystem of very large players who have an interest and this but but that's part of what we're doing is Kara.

And that message.

Long winded answered George but that's kind of how we're seeing it.

Well I think the summation of the answer is it could become a network of effect situation. So moving onto my second question, just making sure I understand the differences quarter over quarter I don't believe you said the last quarter that you had the sign off of.

Or the sponsorship of the the leadership that Abrin and my correct in and that assumption and does that suggest that what is left is not necessarily and amrein's decision, making it's it's by of the regulators or something like that.

That's it for me.

Thanks, George for the original question I No I I I don't think that's the right of interpretation you know we've continue to have senior leadership sponsorship from early on in the process as I mentioned, even even through R. F. T C process whenever and and as you saw it from the filings even came to the ups and see where the several times and and as I mentioned the public statements of their senior folks so.

And I wouldn't read into that it's just to me, it's continued senior sponsorship and and bring this over the finish line.

So just one more question and senior sponsorship does not equate to his senior sign off yet is that of correct statement.

But what we're what we're waiting for is the execution of our contract. So yeah. We've got we've got the senior sponsorship and and hopefully shortly we'll have the senior execution of our agreement.

Gotcha, Okay. Thanks, guys.

Thank you ladies and gentlemen, just a reminder of if you do have a question you can still get and queue by pressing star one on your phone and.

And the next question is coming from Phil Cusack sell your line of slice. Please and that's your filiation and pulls your question.

Hey, guys check the Morgan. Thank you uhm so uhm.

And I wanted to go back to something we talked about a few minutes ago and.

One of the question was referred to the $125 million to $150 million and 2024 of revenue cool.

Cool.

And at this point is that and realistic and that's that's three years from now it takes a year to get these things up and running and.

Doesn't it make sense to just pull back on that and and put expectations and a different place at this point.

No.

[laughter] [laughter]. The that was that was Morgan's quick answer I'll I'll elaborate I, yeah, I I I fully agree with him Uhm that you know we remain confident that based on the real best level of interest both the organic bottom up approach as we're talking about that were that were seeing along with the the opportunity and <unk>.

Potential for some of these top down breakthroughs, the can drive adoption and even faster, we remain confident and and.

And and stand by that.

And a prediction for <unk> projection for now so you know it's early in the game and we're gonna start being able to put some some you know.

Numbers on the board soon and from that we'll be able to draw better conclusions and I'm gonna be able to communicate more with with the analysts and investors about about the trajectory, but but for now we're we're confident that number.

Right and we can't we we just we just can't present it other than as we see it that's how we're seeing it as it develops and if we could just turn loose every conversation we're having it easier for you to sort of understand where we are but of course, we can't.

And so this is Tim just the one one thing and I.

And remember that.

The the revenue guidance me and put out there is really based on a small number of top of 20 I of us. So it's not like we need the sign 50 to get there. It's we mentioned and six to 11 and and we're still with the net looking to be within that range. So again, it's a relatively small amount of.

Okay Navy.

And maybe you can help US then bye bye framing of the.

The number of of potential customers or some kind of of the way to quantify.

How many customers are in those those different buckets of.

Of contracts and or or of discussions and sort of pipeline.

Not necessarily you know who are they are how big are they and but how many customers are in the pipeline.

Yeah, I think we we've discussed and passed the the the the broad scope of our over 40 customers and the pipeline. We've determined it it's not prudent for us to continue to of sort of refresh that number regularly because you know like any large account sales customers do move in and out and just.

Based on their starts and stops it's kind of natural and just kind of sector. So it. It you know it's it's remains large you know it continues to grow.

And it is we we we we chose to give you a scaling of it of saying is is Ryan did about the represents and the three quarters 75 per cent of our spectrum value of across the nation and that pipeline and so we think that's a good order of magnitude understanding of what's in there.

Okay, and then one more and and the Morgan maybe.

I I appreciate everybody's thoughts and this but but for the idea of a utility company of America sort of you know top down.

Congressional action driving utilities to sort of work together.

I I again, I'm struggling to see that is very likely and of divided Congress and and [laughter] a country that has a hard time doing anything and.

Well.

Alright and agreement Yeah, Let me let me let me let me yeah, Yeah, <unk>, Let me let me first day.

And.

And I don't think you're saying this either because it has not happened ever doesn't mean that it couldn't happen. That's the first thing. The second thing is I'm not saying there will be any such thing I'm, saying that collectively if the very.

Well run diverse companies that are in the space C. It to be their advantage and it it seems to me it's our job to show. The advantages. We have we have much deeper root of the and the wireless space and knowing where wireless is going as it goes from for G. The for.

Five chi and artificial intelligence and whatever else, so, we and and we need to.

Because we are persuaded here can't for that that we understand how their operational requirements, which we've gotten to know so well they're operational requirements are going to be amazingly impacted by.

<unk> five G wireless connectivity and wasted a lot of and still do not understand the beginning to understand but let me have Chris talk to you about the the congressional process, because I'm willing to bet Ya I'm willing to bet you that this area of infrastructure investment.

To make the grid for secure of something that could well have bipartisan support one of the few thing, but what Christians and expert on this let him talk.

Sure. Thank thank you Morgan and and Yeah, I mean, I I I think I just want to add to what to what Morgan had introduced earlier and then sort of reiterated which is <unk>. You know, we we have an expectation that Congress from a bipartisan perspective, it's gonna embraced some form of and infrastructure of stimulus funds.

And and whether it takes the form of directly of infrastructure funding or specifically, whether it's sort of the grid modernization or or some efforts of fuel some environmental policy or cyber security focused or you know chairman pillow and might want some form of.

Of of effort to to you know just sort of stimulate the utilities and and the communications companies to have better ultimately better performance the liability, we liability or we've done and and see we see a bunch of different vehicles, all designed to really enhance utilities and tend to stimulate utilities too.

To move to a to a more resilient to a more modern grid and the key component of that and we've been all over policymakers on the on Capitol Hill, and the and the state.

Uhm educating them that you can't have of modern enhanced intelligent grid without modern enhanced broadband communications and and with that comes and I I, you know and no Morgan sort of went through the list of of the benefits of collaborative movement, but you know you really do have and we.

And as we've met with policymakers, they've really begun to understand you can get obviously by scale and scope with that but you can also get a real significant incentives to innovate and to drive enhanced research and development and the device ecosystem and and applications ecosystem, and best and class cyber security and and for Us and those.

And all our bipartisan ideas and messages and so as we look at this from the sort of a circular perspective Congress can really help the stimulate the economy.

By diving into infrastructure supports but with that comes those those range of of benefits that that you know I think George called it and Ah network effect, that's exactly what we would call. It we call. It again and that will come networks, but it's it's it's of networking a factor of network effects that we believe Congress is going to want to and.

Brace our goal is to ensure the Congress identifies communications is the key element of that and that's what we're really pushing not just and terrorists and not just the advisory council, but also with other sort of key utility organizations and thought leaders.

I'll stop and Chris Chris Let me just just emphasize that.

<unk> and <unk> she's she's of vision for this industry, which doesn't stop at 900 megahertz, but it's 900 megahertz is foundational to getting started and then you have C. M. A R. S and other types of spectrum that are gonna be layered onto this network to support much greater.

Usefulness for the for the grid operations of grid security as we go on and it's touch it's itchy and the abbot of Bull that that it will happen and it's two ex two are interested in the in the interests of our shareholders to lay that out to the policymakers and to have them do what they did back in 2000 and.

<unk>, they put like $8 billion and out there for smart grids, right smart smart meters and that caused the industry to move at a speed the never moved before to move collectively and then of respect. So it can happen. It's it's not the way it's been done for the most part of but that big exception, but.

We think it is going to happen.

Right. The E. R. A R. R. A is is is the the the logical model and you know what when it unleash day of my eyes, we could see you know sort of a whole new universe of opportunities for utilities machine learning of artificial intelligence, you know cloud computing edge computing.

And all of those things that get that get facilitated and stimulated by broadband. So you know as we look back at the at the process that led to the E. R. R E Z.

That's very similar situation at this moment.

The the I understand we have another question and we have another question and did you stay rough.

Yes, we have another question coming from a Brian Warner Brian Your line of life, Please and answer filiation.

Alrighty, Brian and one of <unk> capital of Thanks for taking the question. This probably ties into some comments you made earlier and and just now.

900 megahertz being the foundation of this and just can you give me sort of a very high level, maybe some of the issues between the C. P. R. S and the 900 megahertz band and whether or not you know I'm. So I'm trying to figure out how complimentary and they are.

And at the same time, and how can kind of anything my day Uhm care of them, just as investments business and the thoughts about what some of them and the important variables might day. He can I take a quick stab at it robbed and then and let you guys still and my my quick stab says one thing I Wanna do is you Wanna look go online and see what the product line of Motorola is talking about where they come.

Line and a single of equivalents that day, they combine 900 megahertz and the three that five so they see it as extremely complimentary and the and the same the equipment that the intending to deliver but that's the essence of it is one of the.

Spectrum bands at 900 gives you a lot of coverage and a lot of penetration and the other gives you tremendous capacity, but does not have anything like you can't go more than a few blocks. So it's a question of what is your use of case and Ryan and talked about use cases I've.

<unk> I've seen the list of 20 for use cases, the various utilities are looking at for broadband and some are ideal for and absolutely require the ability of 900 to get that why the area coverage and penetration and others are gonna work much better if they.

Have pockets for episodes of C. B R. S. At particular locations, which you just can't possibly afford the cover it through so let me throw the types of rock.

And thanks for Morgan of I think you hit it pretty clearly, but Brian just for your you know knowledge. So the C. B rest of where the three dot five has both license and unlicensed spectrum. So for any major carry that was built around the globe almost all started with low band spectrum spectrum under of gigahertz, because it has the physics. The you know the.

The rules of don't change the ability to travel long distances with with a single cell site and that's important because it it multiplies the capex and up ex every time you have to it's L sites and see the rest is probably needs at least four times as many sites to cover the same kind of space of as of as a single site of 900, but more importantly is it also just building penetration right the.

Kind of spectrum, and so you you and for utilities I'd have to get into you know be able to read you know devices with and buildings and and subterranean areas. At 900 has is greater penetration overall, we see it is completely complimentary and there's a lot of examples of that both utilities that are piling the too as well as examples of of of.

Other sectors, where they're seeing low band you know with the call that sort of the layer cake, putting on multiple bands of spectrum, but starting with that foundation of little band.

Another important thing, let's see the rash is it really showed through this recent auction was the you utilities were willing to pay for spectrum and honestly outbid carriers for that spectrum and so it did demonstrate the importance of spectrum and utility business model and so of multiple utilities ended up with the C. B R. S. Many of whom we've talked to and see the complimentary aspect of 900.

And and have intentions of being able to do this sort of midband loop and configuration to get greater capacity and their and their network.

I got so I'm gonna isn't of concerns as quick ball up is there a concern that some of the utilities and.

Gonna be so I'm more interested in and sort.

Sort of giving you pushed back because they they feel like they could do hybrid systems, where you know plain and there's plenty of area of particularly densely populated areas for your C. B R S and it's effective.

Other than that the limitations that would make that and not practical well for me to me hybrid and <unk> and you're trying to cover a broad area. The service territory, you know and you gotta realize either of these utilities and have multiple states of coverage and the covering areas, where there is no existing wireless networks, where there's substations and transmission line transmission lines, and so and or.

To achieve economic coverage of their service territory, which is the objective you can't do that and the C. V. S. So it it it's very good for and and you know I was on this panel with first wireless of several weeks back where of Google's uhm head of their effort and she breast talked about their pilot in Arlington, Virginia, and and Lily said, you know not only couldn't you go through windows, but he.

He couldn't go more than a couple of blocks and so it's great for covering the stadium. It's good for covering campus, but it's not really spectrum. That's gonna go further than that it's really like I've heard people talk about a kind of of Super Wifi think about the applications, where you use Wifi this as of new band with with less with more proprietary usage and unless you let's interference that you can use now.

And for those kind of applications.

But I think I think I think your use of the word hybrid suggest that that would be something we would fear that the hybrid systems and that's exactly what we anticipate thing that's that's the vision and when we look forward, we see hybrid system with foundational lobe and spectrum and on top of it built additional spectrum use.

<unk> for a highly specialized pieces, where you can have the huge chunks of the spectrum. So you can do virtually real time stop artificial intelligence type stuff, which you're gonna have a hard time doing at 900 megahertz 900 megahertz.

Has a completely different profile of use case.

Gotcha, Okay. That's very helpful. Thanks, Good luck with everything.

Thank you Brian.

Thank you and there were no other questions and the queue.

Great well, thank you for operator, and and thanks, everybody for all of the good questions and the continued interest and patience. We look forward to our next opportunity to up to everybody and and their ongoing process. Thanks again.

Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.