AT&T / Cingular Cell Tower Lease Renegotiation

Recently, many landowners with Cingular (www.cingular.com) or AT&T Wireless cell tower leases have been receiving letters in the mail or phone calls that state that due to the merger between these two companies that land leases need to be negotiated. These letters further imply that the landowner needs to negotiate to make sure that Cingular is not going to terminate the lease. Steel in the Air assists landowners with evaluating these letters.

These letters typically contain one or more of the following four offers:

1. A reduction of the monthly rent by half or more coupled with a three year guarantee that Cingular will continue the lease.

2. A lump sum payment worth approximately 5 years of lease payments which allows Cingular to keep the site without further obligation for 15 years.

3. A reduction of rent by 25% for a long term guarantee.

4. A termination of the tower lease with an offer by BlackDot or MD7 to solicit additional tenants on the tower with the landowner taking over the responsibility or removal of the tower.

None of these four offers are too attractive. However, the sales agents (many of whom do not work for Cingular) sit in their call centers and attempt to convince landowners that their cell tower lease is in jeopardy and that some money is better than none. Most landowners are ill-equipped to deal with the loss of the lease entirely and feel that they have to negotiate.

To further compound matters, asking questions of the call agents is a fruitless endeavor. Either they don't know the answer, don't care, or simply misdirect the questions asked by the landowner. One question may be about where the “redundant’ cell site actually is or why this particular landowner’s tower was chosen.

Because the offer does not guarantee anything more than 3 years, the landowner does not want to take the risk that Cingular may terminate after those three years. Therefore, many landowners agree to lesser rent for the current length of the lease. This is not a great proposition, but the prospect of getting more money is even worse, so many landowners have been agreeing to the offers.

Clearly, Cingular is going to terminate some cell sites. One of the stated goals of the merger was to reduce operating redundancies thereby increasing profit. As the cost of owning and leasing cell sites is one of the largest budgetary costs, the prospect of reducing redundancy is a reality. Estimates range from 8,000 to 12,000 of Cingular and AT&T Wireless' 50,000 sites will be terminated.

So how does the average landowner know whether or not they should negotiate? They don't. Some attempt to research where nearby towers are, but there is no public and reliable source for that information. And which landowner knows how far a cell site can be from their cell site to be qualified as redundant?

That is where Steel in the Air comes in. We can assist you with determining the following:

1. Whether or not your cell site is redundant with another Cingular/AT&T Wireless cell site. We maintain our own proprietary database of 65,000 towers and can map your location against these towers as well as the FCC registered towers and the FAA obstructions. Many times we can tell exactly where the nearest AT&T / Cingular cellular tower or cell site is. Sometimes we can't, but we now have other resources to find that information. Furthermore, we have hired outside Radio Frequency engineers to assist us in figuring out what construes a "redundant" site.

2. If there is a redundant AT&T or Cingular cell site in the area, we can help you analyze the possibility that the other site is more or less likely to be terminated than yours. We can share what we believe are the 4 factors that AT&T and Cingular are using to evaluate sites. From there, we can help you determine whether or not negotiation is even necessary. If it is necessary, we can recommend whether or not you need to accept their offer.

3. We can share with you the results of what has happened with the 50 clients who have retained our services in regards to the Sprint /Nextel and the Cingular/AT&T renegotiations. This includes what has happened in the event that they failed to negotiate.

4. We can provide you with alternative strategies which can reduce your risk in the event that we find there is a significant risk.

We do not have secret knowledge of what sites are being terminated, but we do have a better grasp of the situation. We can specifically review your location and help you make an informed decision. We can outline the risks involved in not negotiating and help you make a decision you can live with.

The fee for the analysis is $1,250. If your monthly lease rate is less than that amount we are willing to reduce the fee to the equivalent of one month of the lease rate, but no less than $750.

If you have received a letter from Cingular/AT&T asking to remarket your site location to another carrier and abate rent for two years, you don't need our services. Simply tell them you are not interested. They are merely trying to have you release them from the liability of removing their equipment. There is very little likelihood that they will be successful in re-leasing the site.

If you still have questions on whether or not our consultation services are right for you- please see what some of our 300+ clients have had to say about our services in our Testimonials page.

Please CONTACT US for more information.

AT&T WIRELESS and CINGULAR are registered trademarks of Cingular Wireless and AT&T. Black Dot and MD7 are registered trademarks of MD7 and Black Dot Wireless respecitvely. Steel in the Air has no affiliation with any of these companies.