Afraid of Rocking the Boat
March 2nd, 2012 by sita Posted in Uncategorized | No Comments »Rocking the Boat.
A gentleman called us two days ago. He had been approached by a local tower company to build a cell tower on his property. We had an initial discussion, and he seemed intrigued by our services. The initial offer from the tower company was pretty decent, better than an initial offer should have been for this area. I suggested this to him and also suggested that typically when a tower company makes an offer like this, it is because the property is unique. This gentleman owned a significant amount of acres along a difficult-to-cover corridor. The tower company had no other choice but to use his property.
After meeting with the tower company, he had the courtesy to call me and indicate that he wasn’t moving forward with our services and that he had accepted the offer on the table. It appears he was afraid of losing the deal on the table. Essentially, he was afraid of “rocking the boat”. In this case, it is likely that he passed on a few hundred thousand in revenue over the course of the lease. Had he gone forward with our services, this would have been one of the rare cases where I would have recommended that the landowner build and operate the tower directly. So instead of getting a few hundred dollars per collocation, he would have received significantly more.
I told him that he was making a mistake over the phone- not because I needed the small fee we would have charged for his consultation, but because I truly believed he was making a mistake. He and his family were pleased with the offer on the table, though, and understandably didn’t want to lose it. Furthermore, he decided to negotiate the lease agreement himself, as well. I write about this one out of frustration. He was clearly a bright and cordial man and no doubt had significant wisdom and knowledge, but his lack of understanding about the tower industry led him to pass up on what could have been a much better deal. Even if he had just wanted to simply lease, there was at least $500/mo more in it for him. In the end, his fear of the unknown prevented him from making an informed decision. Clearly the tower company representative was a better salesman than I was in this case. Perhaps I should have been more aggressive.
Individual Masquerading as Steel in the Air Employee
October 20th, 2011 by sita Posted in Uncategorized | No Comments »A woman from Virginia contacted us today and indicated that she had met a man who was passing himself off as an Italian business man who works for Steel in the Air, Inc. He referred her to our website and used an email address that contained the words “italianmanofsteel”. He indicated that he had to leave for a business trip to Malaysia shortly after meeting her and 3 days later called and asked her to send money.
She wisely called us and we indicated to her that it was a scam. If you have been contacted by anyone working for Steel in the Air that asks you to send money, don’t send it. We would never ask you to send money unless you have a written contract with us for services.
Best Practices Guide for Lease Buyout/Optimization Companies
October 19th, 2011 by sita Posted in lease buyouts, Lease Renegotiations, Uncategorized | No Comments »Author’s Note: The following article is written tongue in cheek- I was just feeling a little rambunctious today about the myriad of “strategies” that we come across every day that lease buyout companies, tower companies, lease optimization firms, and wireless carriers use to try to convince landowners to do something that is not in their best interest. Hopefully, this will help at least one landowner realize that they aren’t alone and that they don’t have to make hurried and rash decisions. Please realize that no company does all of these things and not all salespeople at these companies do them.
If I were a company trying to get a landowner to sell a lease, extend a lease without additional compensation, reduce their financial compensation for a lease, or otherwise give consent to adding equipment without compensation, here are the strategies I would use. These are time tested and definitely work. Please note that some of these strategies might not be ethically sound, so please consult with your religious advisor, your attorney, and your company ethics advisor before pursuing them.
First, all of my salespeople would have official sounding titles. I wouldn’t call them salespeople because that suggests that they are trying to sell you something. I would call them a Director even though we have 200 “Directors”. Or I would call them something like Lease Optimization Specialist because that makes it sound like they are trying to help you. Or if I wanted to be straightforward, I would just call them “Money Taker”. I might consider outsourcing all my salespeople as subcontractors so that I have “plausible deniability” when they do something unethical.
Second, I would find out where the landowner lives and works. I would ask them for their phone numbers using official sounding letters that state that the information is required when actually the only reason they want it is to pester you through any means possible. I would get the landowner’s email address, phone numbers, home and business mailing addresses so that even if they found a way to avoid me on one line, I could reach them on another. I would learn their kid’s names and attempt to uncover any skeletons in their closet. I would share my religious beliefs if you are a church landowner and suggest that because I am religious I would never deceive you. (Actually happened)
Third, I would set up a schedule to contact them over and over. Advertising professionals suggest that you need to contact someone eleven times with advertising to get them to notice you- so I would do double that. The first would be a postcard that suggests that we are a wireless company looking to install new antennas in the area. I would make it intentionally vague but promising such as “I am here to give you money, would you like some?” I would then follow up with phone calls until I had the opportunity to speak to the landowner/building owner directly. I would use an auto-dialer because there is no violation of the do not call list if there is a pre-existing business relationship. If a person’s secretary prevents me from talking to them, I would threaten to sue her directly. (This actually happened) If I couldn’t reach them on the phone, I would start mailing them regularly. This would include postcards and emails on a bi-monthly basis first extolling the virtues of my company and then if those failed to work, I would start sending ones that get progressively more aggressive. These postcards would eventually say that if they failed to respond, we would move the tower even if it wasn’t ours and we had no right to move it.
Fourth, I would constantly suggest that there was a drop dead date, even though there never are real drop dead dates. I would make up ridiculous reasons why the next drop dead date was real such as pending mergers or limited amounts of money that I could deploy to purchase leases. Then when they missed the drop dead date, I would call again and say that through my hard efforts, I was able to convince the company to bend “just this one time”. “I might lose my job for this,” I might say trying to pull at your heartstrings. (Yes- this actually happened)
Fifth, when that didn’t work, I would start sending newspaper articles with doomsday titles although I would do so without any explanation on why I was sending the article. “LightRadio Cube will Make All Towers Obsolete Overnight” is what I want the landowner to read into an article that really only says that “LightRadio Cube might reduce the need for future towers”. Or I would gleam onto completely ridiculous articles that have no factual basis such as “Blimps to replace towers”. I would point out every article that suggests that various merger combinations are “guaranteed” to occur. (The Sprint/T-Mobile merger was heavily rumored in 2010.) I would send you doom and gloom articles about how the wireless carriers have to spend billions of dollars to improve their networks, but conveniently choose not to point out that the wireless companies have in the past generated 40-50% profit.
Sixth, I would make aspersions knowing that the average landowner was not capable of confirming or denying them. For instance, one “consultant” suggested that Sprint/Nextel is going to terminate 50,000 of their sites. (Even though they only have 66,000). Or I would tell a landowner that there was a good chance that Nextel was a possible tenant on his tower even though Sprint was on the tower as well. Or I would suggest that AT&T and Cingular still have a lot of terminations to complete from their merger in 2005. I might suggest that I already have a tenant waiting to go should they sign with me even though I really didn’t. Alternatively, I would suggest that we can market a tower company’s tower better than they can even though the tower company has 30 professional salespeople who do nothing other than market towers and we don’t have a single person dedicated to marketing the site. I would do a deal with a national restaurant chain and tell landowners I can readily move their site to the nearest fast food restaurant.
Seventh, I would start calling more and more frequently until I got an answer out of you because I know that you are weaker than I am. If you are smart enough to figure out what number or even the area code you were calling from, I would start using Skype or another VOIP line to disguise my location. Friendly hint: watch out for calls from (949). I would call you at times where you weren’t expecting.
Lastly, when it was clear that I wasn’t able to sell you on what I wanted, I would send an ominous note perhaps copying my SITE RELOCATION OFFICER or my YOU DID IT NOW OFFICER saying that we had discussed the lucrative options that I had provided and that you foolishly have chosen to ignore them. I would ask you to sign this document even though I really never cared if you signed it and you have no duty to sign it. I might get angry at you for wasting all my time until I decided to call you back in six months to start the process all over again.
Even though this post was written tongue in cheek, it does illuminate the sizable advantageous that lease optimization firms, lease buyout firms, tower companies, and wireless carriers have against the average landowner. They do this daily – have people dedicated to perfecting their process. The lease buyout and lease optimization firms can track what pitches work and which don’t. They have the ability to compare notes and do research which is intended to make you the landowner question your own resolve. That is where we come in. We can sort through their suggestions and strategies because we have seen them over and over. We can tell you when to ignore their pleas. There are times when you should sell a lease and times when you should renegotiate your lease downwards. Fortunately, those times aren’t very frequent. We will help you ascertain your best option. We will tell you when it is safe to stop picking up their calls and when you can ignore their letters. We will provide direct and honest guidance because we only work for you.
Not a Good Time to Be a Tower Developer or Manufacturer.
October 12th, 2011 by sita Posted in Uncategorized | No Comments »Steel in the Air recently completed a project for an investment bank where we examined the future of the tower construction market. We found as part of this assignment that while the number of new cell sites built each year has been slightly decreasing from year to year, that the number of actual towers constructed has declined significantly. From what we hear, this trend is expected to continue for at least another two years.
AT&T and Verizon are both focused on upgrading their existing sites as compared to expanding their networks. T-Mobile is basically at a standstill waiting for the resolution to the Department of Justice lawsuit blocking its merger with AT&T. (A dangerous place to be- if the merger isn’t approved, T-Mobile will have effectively fallen further behind in the race to 4G as compared to the other carriers.) Sprint announced a significant amount of modification work on their existing sites, but there wasn’t any discussion of building new towers. Clearwire looks to be dead in the water without funding from Sprint and with too much debt to take on the money they need to continue expanding. MetroPCS is focused on their LTE upgrades and hasn’t been expanding much.
Requests to our website to help landowners with new towers have declined as well, which is anecdotal evidence that supports that new towers just aren’t being built. Thus, it isn’t a good time to be a tower developer or a tower manufacturer.
Cell Tower On Your Property Page
September 23rd, 2011 by sita Posted in Uncategorized | No Comments »In going over our website statistics, we noticed that there is an increasing interest by landowners in having a cellular tower erected on their property. Since 2007, over 150,000 unique visitors have visited our website and gone to this page. There seems to be a clear trend that the number of visitors per month to the page has been increasing. Clearly the economy plays a part in this- landowners are looking for any ancillary revenue they can find. We suspect that increased awareness about cell tower leases and the potential revenue from towers is driving this trend as well.
Unfortunately, trying to get a cell tower lease is like trying to win the lottery except your odds are better with the lottery. Out of over 10,000 people who have ever contacted us asking how they can get a tower lease, only one has ever contacted us back and said they actually got a lease by contacting the carriers.
And Immediately They Pounce…
March 24th, 2011 by sita Posted in Uncategorized | No Comments »As landowners and tower owners just start to hear of the AT&T – T-Mobile merger news, the lease buyout firms and optimization firms have started aggressive campaigns to encourage landowners to either sell or renegotiate the terms of their leases IMMEDIATELY. Despite the fact that the AT&T and T-Mobile merger will take a year to complete and that it may not (but probably will) be consummated at all, landowners are being told that they have to act now.
Md7 is sending out emails to landowners saying that they have 5 days (yes- 5 days) to decide whether to agree to reductions of their leases in exchange for a guaranteed term. Unison Site Management is aggressively contacting landowners telling them that they need to sell immediately or their lease could be terminated soon. Of course, this begs the question of why Unison is so anxious to buy leases that may be terminated and why Md7 is so anxious to guarantee leases that might be terminated.
This isn’t to say that some leases won’t be terminated eventually. We believe that the merger will occur and that AT&T and T-Mobile will terminate leases. They have to- there is no reason for them to operate 100,000 cell sites, some of which duplicate another cell sites coverage. But landowners should not feel pressured to make a uninformed “sky is falling” decision. If you need help making a calm and rational decision, please contact us.
lightRadio and the “End of Cell Towers”
February 23rd, 2011 by sita Posted in Uncategorized | No Comments »
Alcatel's proposed lightRadio Cube
Recently, Alcatel sent out a press release for their lightRadio cube that stated that ”New Wireless Advances could mean the End of Cell Towers”. This sensationalist and ill conceived (IMHO) press release was widely picked up by newspapers, magazines, and blogs whose authors in 95% of the cases failed to do any substantive research into the how, where, and why portions of the story. They simply regurgitated the press release headline that cell towers will be a thing of the past now that lightRadio is here. As a result, many of our clients reached out to us asking whether they needed to do anything because to prevent the now pending end of their cell tower or cell site lease. Alcatel provided little substance with their press release merely showing pictures of the lightRadio cube which measures 3 inches by 3 inches and leaving uninformed readers to assume the worst. That towers can now be removed from around the country because of this wonderous 3″ cube. That the blight on our visual landscape will now be a thing of the past. That new towers are no longer necessary.
The reality is that this technology is unproven as of yet. It is not in use and has not been adapted by any wireless carrier in the United States. One of the major wireless carriers is contemplating doing trials on the lightRadio system which means to us that actual deployment is still 5 years away. While it may be unproven, the reality is that whether it is lightRadio or another technology platform, the miniaturization of cellular antennas and transmission equipment is already occurring. The carriers already deploy femtocells (mini-towers as the press refers to them) that you can use in your home. They already use picocells- miniature antennas that can be attached to the sides of buildings and on small poles that operate to augment coverage and capacity in small areas. They have Distributed Antenna Systems where small nodes include both the transmission equipment and the antennas in small packages that are mounted on utility poles or in stadiums or buildings.
The carriers have and are working with equipment manufacturers to develop better, smaller, and cheaper technology to be used to increase coverage and capacity in their network. But there are fundamental and scientific facts about the propagation of wireless frequency and the efficiencies to the network of using macrocells (what people traditionally think of as a cell site). The taller the antenna, the wider area of coverage. The bigger the antenna and the greater amount of power going through it, the stronger the signal. To reach those areas where the carriers need coverage like inside buildings, power is needed. A 3 inch cube will not provide wide area coverage as it simply can’t handle the amount of power necessary to provide that coverage. Alcatel’s plans are that these cubes can be used in sets of 10 or 30 within a traditional antenna panel. Alcatel is promising a 50% reduction in the power used by cubes as compared to traditional cell site base stations. That may be. However, until they design these cubes to float in the air without assistance, there will still need to be a structure supporting the cubes.
Whether they are mounted on rooftops, towers, or water towers, cell antenna will still need to be mounted higher and above the existing foliage and buildings. The exception to this is in those areas where building or other structure density allows for deployment of smaller more frequent cell sites. Even then, the underlying population density and cell usage must support the cost of deploying the sites. Power and fiber optic cable will need to be run to each node. A lease will have to be entered with the landowner or building owner or a right of way access agreement with the local utility or municipality. All of this suggests to us that cell towers in general aren’t going away. However, some specific cell towers and rooftop sites may no longer be needed whether it is due to technology changes like lightRadio or mergers and consolidation.
lightRadio cubes won’t replace towers in rural areas or in most suburban areas. They may give the carriers additional options for deploying their network in the future and may help reduce the cost of individual cell sites in the future. We strongly suspect that some landowners and rooftop owners who have been too aggressive in pricing in the past will find their lease(s) terminated over time as the carriers now have additional tools that they can use to work around obstinate landowners or rooftop owners. These cubes and other miniaturized technologies will reduce some (but not all) of the future need for new cell towers in urban areas and some high end residential areas.
So before you go selling your tower lease because the lease buyout company sent you an article that towers are technologically obsolete, we suggest contemplating where your site is and whether it could be readily replaced by multiple smaller sites. Every cell site or cell tower has a relative value based upon the difficulty of its replacement. An informed landowner, tower owner, or building owner will understand that relative value and make informed decisions on that basis. Steel in the Air, Inc can assist you as your trusted advisor in finding out your cell site’s relative value. If you are already a Steel in the Air client, please note that we will be providing a more detailed analysis of lightRadio and other potentially disruptive technologies that will be distributed in a new client newsletter we plan on sending out via email in the next few months.
The greatest impact from Alcatel’s press release is that now many zoning boards will be confronted with these articles when they evaluate new applications for zoning approval for a tower or rooftop site. “If cell towers are no longer needed, why would we allow this one?” an uninformed NIMBY might ask and a slightly less uninformed zoning board might ponder. So with this press release, Alcatel has now made it more difficult for cellular carriers who will buy this very product to get approval for towers in areas where lightRadio or other competing technologies won’t work anyway. Now that I think about it, perhaps that was by design.
PS- if you know of a way to make 3″ cubes float in mid air without physical support, let’s go get a patent.
Why is Clearwire Terminating My Lease?
February 1st, 2011 by sita Posted in Clearwire, Uncategorized | No Comments »A number of landowners have been receiving termination letters from Clearwire for sites where Clearwire negotiated a lease agreement but failed to start construction. The letters simply state that Clearwire is no longer interested in the site and is terminating under the termination language in the agreement. For most owners this comes as somewhat of a shock because it appeared that Clearwire was actively pursuing the site.
From what we can gather, it appears that Clearwire simply ran out of money. Do a google search for Clearwire funding- and you will easily find numerous news stories about Clearwire having blown through their development budget and Sprint’s unwillingness to invest more in Clearwire. We aren’t saying that Clearwire is going bankrupt- but they definitely had short term funding issues.
A discussion with a Clearwire site acquisition agent indicated that he believed that the decisions were being made on a market by market basis. It appears that Clearwire executives have decided that some markets are more important than others and that they would have to prioritize. For instance, we heard that Tampa and Fort Myers are being put on indefinite hold so that other markets can be prioritized (like Miami). This agent suggested that it was likely that Clearwire would be back to restart our client’s terminated lease in the near future perhaps in a matter of months.
However, another client of ours in Phoenix received a termination notice for an unbuilt Clearwire lease. This client had a 6 month termination penalty in the lease agreement meaning that they will receive 6 months of rent upon termination. If Clearwire intended to come back to this lease in a few months, it would have made better sense to keep the lease going rather than pay a 6 month termination penalty. This suggests that Clearwire will not be back in a matter of months.
There have been numerous rumors swirling around lately involving some combination of Sprint/T-Mobile/Clearwire/Light Squared and mergers and acquisitions involving the same. If a merger was in the works involving Clearwire, we could see that it would make sense to terminate the unbuilt leases as network goals would need to re-prioritized. Interestingly enough- we hear that Light Squared projects were started and put on hold as well in at least some areas.
Unfortunately, for the landowner who received a termination notice, there is nothing that can be done. We don’t believe that these lease terminations are site specific or related to the lease rate. Thus, you can’t and shouldn’t offer Clearwire a reduced rent to try to encourage them to stay. Either they will be back or they won’t- and you won’t factor into that decision. Just keep the lease documentation and wait until to see if you hear from Clearwire again. If you haven’t receive a termination notice, than don’t do anything. Just let Clearwire build your site as soon as they ask. If you were negotiating a lease with Clearwire and they stopped contacting you, just wait. If you need help figuring out how much to charge Clearwire for their lease- please see http://www.steelintheair.com/Clearwire-Cell-Tower-Lease-Negotiation.html.
Top 5 Puns Used by Newspaper Columnists About Cell Tower Hearings
September 7th, 2010 by sita Posted in Uncategorized | No Comments »Every week, we review hundreds of news stories from across the US to keep abreast on what is happening in the wireless world. Frequently these stories involve NIMBY’s who believe that the tower will cause cancer or that their property values will decline. The stories always discuss the “alternative views” to cell tower safety and public opposition to the tower. Our point is not to comment on what people believe regarding cell towers, but to point out that it seems like newspaper columnists have a rotating list of puns that they use to title the story. The most common and therefore least creative puns we see related to wireless tower stories:
- Can you hear me now? (Insert angry resident(s)) opposes a tower. The obvious play on the Verizon tag line. We see this more than anything – probably once a week.
- Call to (insert wireless carrier): We don’t want the tower. Notice the creative use of the word “call” when talking about a wireless tower.
- Cell phone tower proposal makes waves. I guess the use of the term “waves” is based upon radio waves.
- County receives Towering Proposal Towering? It really doesn’t even make sense.
- Request for tower blocked (or dropped). A play on a cellular call being dropped or blocked expect applied to a tower proposal.
Fox Guarding the Henhouse: Allentown and a Misguided RFP
August 19th, 2010 by sita Posted in cell towers, lease buyouts, lease purchase, municipality, Uncategorized | No Comments »We recently received a Request For Proposals from the City of Allentown, PA. This RFP was intended to procure a “consultant” to assist the City with the sale of its cell tower lease income. The City of Allentown wants the consultant to review the city’s cell tower leases and advise the City on whether it makes sense to sell them. Then the “consultant” is supposed to solicit offers to buy the leases. But instead of paying the consultant, the City of Allentown expects that the consultant will work out side deals with the prospective buyers and get paid by the buyers. In short, the City wants an independent and unbiased “consultant”. But in reality, the “consultant” will end up being neither because they are paid by the buyers of the leases instead of by the City.
The “consultant” has little incentive to bring offers to the City that won’t pay the consultant as much regardless of whether those offers would be better for the City. Because the “consultant” gets paid by the buyer, if a particular buyer doesn’t pay as good a commission, the “consultant” will ignore that company and the City will not get all the offers that it should. Furthermore, the “consultant” won’t bring offers to the City that may have more favorable terms and conditions if those same offers don’t pay as much in commission. We wonder whether the “consultant” will advise the City of the fact that it might have increasing recurring tower maintenance and operational expenses in the future after selling its leases. Perhaps not because it might otherwise reduce the “consultant’s” finder’s fee.
In this case, it seems that the City received a proposal to purchase its leases and a proposal from a “consultant” to review the proposal perhaps from the same entity at the same time. I assume that the City could not authorize a commission based contract without putting it out to RFP and thought that they would be thrifty by putting the cost burden on the “consultant” to collect his fee from the same people that are interested in buying the leases.
In the end, it is very unlikely that the City will end up with the best deal for its citizens. The City will save money by not having to pay for an unbiased consultant- small savings considering the money it will almost certainly leave on the table. If you review our blog, you will see that this is the first time we have called out a municipality by name. We are hoping that exposure to this ill-conceived endeavor will encourage the City to reconsider and think long term instead of short term.