New Cell Site Technologies Changing Cell Tower Leases

Article Written By: JasonLancaster

Massive development has occurred in the cellular market over the past quarter century. Beginning it's life as a gadget that only the elite could afford, the cell phone has become a basic commodity for everyone in all walks of life. This transition couldn't have taken place without the global growth of wireless networks, the backbone of the mobile phone. For many years, constructing new cell sites and towers was essential for all cellular networks just so they could accommodate the rising demand. Today, market changes and fast-paced technology upgrades have stimulated wireless network providers to reevaluate many of their older cell sites, cell towers, and their wireless leases.

When cell phones started to gain popularity, there was a rush to build cellular towers everywhere. This rush occurred during the first and second generation of cellular technology, in the time period of the late 80's and early 90's. At this time, both cell sites and cell towers were often chosen because of their location. There were particular properties and buildings that were considered andquot;primeandquot; spots for coverage, and because of this, cellular network companies had to pay large amounts of cash to get these andquot;primeandquot; spots since the choices were very limited.

But as the expression goes andquot;times, they are a changin'.andquot;

Contemporary cellphones are in many ways completely different than their 1st and 2nd generation predecessors. Before, higher antenna sites were needed in order to support as many mobile phone users as possible...but it's not this way any longer. In fact, the preferred location for cell towers is almost completely opposite now. Much of the operations are now centered on sites that are closer to the ground, allowing for greater bandwidths. This means that cell phone users have more tower locations and can therefore use more services. The towers have changed from andquot;best locationandquot; to andquot;multiple locationandquot; technology.

Because of this positive change in technology, networks no longer need to concentrate on finding the so-called andquot;idealandquot; areas for cell sites and cell towers.

While all of these cell phone and cell tower technological advances have benefited the consumer, property owners with cell site and cell tower leases are seeing their rents decline. Cellular networks are starting to look very carefully at every lease, and many leases that were signed when technology was much different are no longer financially responsible. Advances in technology have also led to a lot more competition for cell site leases - as the need for andquot;idealandquot; locations diminishes, many property owners are offering low rental rates to entice cellular networks to move antenna sites from their current locations.

The advances in cellular technology in the past 25 years have been tremendous, and the industry shows no sign of slowing down. As the physical requirements for a cell site change, cell site and cell tower lease terms are being renegotiated. While many property owners are disappointed at lower cell site and cell tower rents and renegotiated leases, consumers are delighted with better cell phone performance and service and the country as a whole has come to depend of the stability of the network. The upside for cell site and cell tower landlords is that lease renegotiations are now making rent guarantees available for landlords to secure their rental income in this dynamic marketplace. And, cellular operators are still great tenants, with low very low credit risk. Property owners just have to be a bit more competitive to retain them.

About the Author

Author Jason Lancaster is a long time observer of the cellular industry. Discover more about cell site leases and cell tower leases at Md7.com.

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