The Wireless Industry
An important distinction is the difference between Cell Phones, and Cell Phone Towers. There is no question that cell phone handsets are here to stay, and the use is increasing. The cost consumers pay per minute has declined significantly over the past 8 years, but subscriber growth made up for any lost revenues. However as subscriber growth has began to plateau, the cell phone companies are now faced with a difficult set of circumstances:
- Their profit margins are under constant pressure as a price war has erupted between wireless carriers.
- New unlimited plans put increasing pressure on existing networks as customer use more minutes without additional charges.
- Infrastructure costs are escalating due to the structure of wireless leases. This is the single largest cost for wireless carriers in maintaining their network.
Wireless data services are currently the saving grace for the wireless companies but competition is beginning to drive these prices (and profit margins) down as well.
There is still development occurring in the wireless infrastructure market, and for those with the right connections, it is possible to gain additional antennas on existing sites. Large companies have now entered the site development arena, and are using their portfolios as leverage to direct these new antenna locations to their towers or antenna sites. By dealing with a national company, cell phone companies are able to access thousands of locations at once, instead of negotiating with individual site owners for every sites. Estimates show there are roughly 240,000 wireless sites across the country, and by dealing with large portfolios the cell phone companies can become more efficient.
Cell phone companies are trying to reduce cost by doing the following:
- By using new technologies to extend the range of wireless sites they reduce the number of towers and rooftop antenna locations that they need.
- As tower become obsolete, they cancel the lease and stop making rent payments.
- By contracting with BlackDot and Md7 to call existing lease holders, they attempt to reduce the rent on the existing locations.
A lease buyout fits into the picture in two ways:
- Similar to the large tower companies, we also leverage our portfolio to add additional antennas, Each antenna we add pays additional monthly rent, The big difference is that we share that rent with you!
- We analyze your current monthly rent, and pay you an up front lump sum that puts you in control of your money, and not dependant on what may happen with your lease. In most cases by investing in conservative investments, this lump sum will be more valuable than your lease would have been!
We want to make sure we understand your goals before we work on any solution for your site. If there are specific considerations you would like us to take into account, let us know.