Cell Tower Companies in the News – Steel In The Air

SITA’s Good and Bad for 2025

Ken Schmidt — Tue, 03 Mar 2026 22:15:16 +0000

Good and Bad for 2025

Rather than the usual brag-fest, here’s what actually happened in 2025—the good, the bad, and the stuff that keeps me up at night.

The Bad!

Two of our clients had leases terminated by the Big 3 this year. In both cases we had advised them termination was unlikely—and with the same facts, I’d probably say the same thing today. The rent wasn’t extraordinary and the escalations were only slightly above average. Cold comfort to those landowners, but those losses weigh on me more than any win does.

I want to be careful not to overstate this, but I do think it may be the beginning of a trend worth watching. T-Mobile disclosed in their Q4 2025 earnings a $450 million network restructuring charge tied to what they’re calling a “customer-driven coverage” model—evaluating every tower site for traffic and value, keeping what’s performing, and terminating sites with limited traffic or high costs. (Remember, the lease is just one relatively small part of the operating expense for a cell site.)

What does this mean for landowners? If your site is busy and your lease is reasonably priced, you’re almost certainly fine. If your site is in a lower-traffic area or your rent is higher than average or what a carrier would tolerate for a marginal location, it’s worth paying attention. The carriers have always had termination rights—what may be changing is how systematically they’re now exercising them.

We also lost some longtime clients this year. The best part of this job is the people—from every corner of the country, with stories I’d never hear otherwise. It’s a privilege to start working with their kids. It’s also a heavy reminder that we’ve been at this long enough to watch the first generation pass on.

On the business side, I misjudged wireless capex. Things looked slow coming out of 2024, and I assumed that would carry through. I was wrong—last year was still busy- mostly due to Verizon. (Worth noting: it wasn’t busy for the 20,000-plus industry people who lost their jobs this year.)

Carrier	2025 Activity	Key Drivers
T-Mo	📉 Slowing / Restructuring	Integration of US Cellular; Refocus on site-level profitability
Verizon	📈 Robust / Busy	Nearly finished mid-band build (90%). Densification and infill in FWA markets
AT&T	➡️ Steady / Selective	Focusing on site uniqueness and traffic value. Change Out of Equipment.

I also wish we’d made more headway for landowners in areas without zoning. The build-to-suit tower companies have been brutally effective at driving down rates in areas with multiple available site candidates. In those markets, it still comes down to one question: Is your site unique, or are you just one of multiple options?

A specific warning on AI and lease valuations.

AI came up constantly this year, and I want to be direct about it—not because I think it’s going to replace what we do, but because it’s actively misleading landowners about valuations right now.

For general information about how cell tower leases work, AI has gotten reasonably useful. But the moment a landowner asks what their lease is worth, the answers range from unhelpful to dangerous. The reason isn’t that AI is bad at math—it’s that the underlying data simply isn’t there. Further, AI can’t tell you whether your property is the only option or one of many for the tower company. Lease rates are private, hyper-local, and shaped by factors that never appear in any public dataset. AI fills that gap with confidence it hasn’t earned. HINT: Your lease isn’t worth $2,400/month, and most leases do not deserve to have revenue sharing.

We lost count of how many landowners came to us this year with AI-generated counteroffers that tower companies laughed at—not because the landowners were naive, but because they’d been given authoritative-sounding numbers with no basis in reality. If you’re using AI to get a general sense of how this industry works, fine. To help with understanding the lease language? Great. But if you’re using it to value your specific lease, please talk to someone with actual market data first.

The Good!

We closed more deals in 2025 than in any prior year. Total dollar value was below some peak years, but across consulting and brokerage, it was a high-water mark.

We secured some remarkable rates—north of $15,000/month—for clients with truly unique sites. People always ask if that’s sustainable. The carriers didn’t blink at renewal, which tells you everything. A good site is still a good site. That hasn’t changed in 27 years.

We also saw a big jump in due diligence work on tower portfolios—more towers and search rings evaluated for clients than any year in our history. Whether it’s projecting lease-up, evaluating portfolio quality, or untangling messy site-level paperwork, people are realizing they need an actual human eye on these assets.

This was our 22nd year as Steel in the Air. I used to wonder when I’d have to pivot as the industry matured. I’m not wondering anymore—I’ll be retiring from this business. We kept taking real positions along the way—on the blog, on LinkedIn. We weren’t always right, but we were honest. The people who pushed back made us sharper, and that back-and-forth is why we have the vantage point we do.

Looking ahead.

2025 reminded me there’s no substitute for experience—and that after 22 years, we can still be wrong. The industry is chasing efficiency and automation. We’re staying in the messy, human work of helping clients make better decisions than they can get anywhere else.

If you’re staring at a renewal, evaluating a portfolio, or just trying to figure out if an offer is legit—give us a shout.

If you're staring at a renewal, evaluating a portfolio, or just trying to figure out if an offer is legit—give us a shout.

Edge Data Centers at Tower Sites: The High Bar and the Real Opportunity

Ken Schmidt — Wed, 20 Aug 2025 06:27:04 +0000

Over the last decade, we’ve heard plenty of talk about how cell tower sites would be perfect locations for edge data centers. The logic seemed sound: tower sites are already connected to power and fiber, they’re secure, and they’re spread out across the country. Put edge compute at the base of the towers, the argument went, and you could serve low-latency applications like streaming, IoT, or AI inference directly to nearby users.

It was a compelling vision, and companies like Vapor.io jumped in early, promising a distributed network of micro data centers tied to towers. But the reality hasn’t matched the hype. Capital costs were high, demand was inconsistent, and many sites just weren’t well suited for this type of infrastructure. 5G didn’t lead to the explosion of data use as the carriers hoped. By our own rough estimate, there may be only 30 to 50 true edge data centers at tower sites in the U.S. today. The rest of the industry has quietly shifted to a more targeted approach.

Why Tower Sites Look Good on Paper

It’s not hard to see why tower sites initially seemed like natural homes for edge deployments. Their locations are often close to the end users who need low-latency connections. Many already have fiber backhaul in place. They’re powered, fenced, and built to handle telecom gear. And in some jurisdictions, they come with zoning or permitting advantages that make them easier to work with than a greenfield build.

But three factors have proven to be the real gatekeepers: space, power and fiber capacity. Without enough of each, edge computing simply isn’t viable. That’s why much of the edge discussion has historically stalled—many tower sites can’t deliver the space and the kind of power or bandwidth required for high-density compute. The industry was hopeful that smaller edge facilities could fit in smaller compounds- but there simply isn’t the need.

The good news is that this is changing, at least in part. The ongoing push to upgrade wireless backhaul means more cell sites are being fed with 10G fiber, which opens the door to supporting heavier workloads. And certain sites—especially larger broadcast tower parcels—already have substantial power infrastructure in place. For those rare locations, the barriers are lower, and the economics start to look more attractive.

ATC’s High Bar

Recently, American Tower spelled out what they consider the minimum requirements for a viable edge site: at least 2.5 acres, flat land, outside a floodplain, with access to fiber and sufficient power. That’s not a typo—2.5 acres. Most cell tower sites are less than a quarter of an acre. ATC’s definition points to something much larger than the micro-edge facilities many in the industry had envisioned. It’s more in line with what I would call a metro-edge or aggregation sites.

From what I can tell, ATC is using its successful Raleigh facility as the model here. It’s a proven concept, but it’s not a one-size-fits-all approach. Very few tower sites meet these physical criteria, and when you layer on the need for a strong business case in the surrounding market, the number gets even smaller.

A Market Measured in Single Digits

The more important question isn’t just how many sites meet these physical standards, but how many do so and are located in urban or metro-adjacent areas where low-latency demand is highest. If you apply both filters—site suitability and location demand—the pool may shrink to 500 to 1,000 of all U.S. towers.

Many of those qualifying sites are in the hands of tower companies that own legacy broadcast tower portfolios, which often include larger parcels and heavier utility service. For everyone else, the acreage and location combination are rare.

And here’s another wrinkle: in many cases, what’s stopping an edge provider or MNO from simply building their own facility instead of leasing from a tower company? If they already own land and have utilities in place, the economics may tilt toward building from scratch. Leasing space at a tower site only makes sense if the location offers something uniquely valuable, such as prime urban real estate, ready-to-use secure infrastructure, speed to market, or a synergy with existing wireless equipment.

How Tower Companies Are Planning Ahead

Some tower companies are thinking long term. They’re adding lease language that reserves the right to use the property for alternative purposes, like edge compute or battery storage. This gives them the option to act quickly if the right customer and economics come along, without having to renegotiate with the landowner.

In rare cases, we’re also starting to see tower buyers factor the possibility of edge or battery deployments into their due diligence and financial modeling of potential acquisitions. But those are exceptions—usually involving unique sites that have the right size, location, infrastructure, and market demand all in one package.

What It Means for Ground Leases

For most landowners, the potential for edge data centers or battery storage won’t change much in today’s lease negotiations. Given how novel this all is, until edge compute or battery power storage is installed at the site, it won’t factor into a tower owner’s consideration when renewing a lease.

There are rare situations where it matters—typically large parcels in urban markets or sites already on the shortlist for near-term deployment. But for the vast majority of sites, these future possibilities are just that: possibilities.

Closing Thoughts

Even the more bullish voices in the industry, like Marc Ganzi of DigitalBridge, see this as a long-term play—a decade-long transition from today’s centralized AI models to micro-edge AI at the tower site. Space, location, power, and fiber will dictate which sites are viable, and while upgrades are happening, the addressable market will remain small for the foreseeable future but could accelerate over time.

ATC’s high bar shows that this is a selective, high-value opportunity. The winners will be the portfolios that combine site suitability, available power, fiber capacity, and market demand—whether the eventual play is racks of AI inference servers or megawatts of battery backup. For everyone else, edge will remain more of a “someday” opportunity than a current revenue stream.

Is the Rivalry Intensifying Among Major Tower Companies? A Look at Recent Events Suggests It Might Be.

Ken Schmidt — Thu, 09 May 2024 19:04:43 +0000

In a telling shift, AT&T recently relocated a cell site from an American Tower Corp. (ATC) site to a Crown Castle tower, seemingly to escape higher rents. This move might signify a brewing competitive tension between two of the big players in the tower industry. Historically, the public cell tower companies have stayed away from pilfering tenants from each other.

Adding intrigue, one of our clients with land under a Crown Castle tower just received an unexpected proposition from American Tower. ATC offered to “partner” in marketing additional land on the site for cell towers, promising to split any new revenue 50/50.

Here’s the catch: if DISH were to use the existing Crown Castle tower, no additional rent would be due unless DISH required more ground space. In that case, our client would pocket 100% of that revenue without ATC —a far better deal. And if DISH wanted to build a new tower, why would the landowner want American Tower to be in the middle? It raises the question: Is American Tower’s overture a strategic move because of Crown Castle’s presence on the property?

Our stance is clear: such proposals, which seemingly don’t favor landowners, should be approached with caution or outright rejected. We advise our clients to think twice about these deals, which appear less beneficial than they may seem. If you receive a similar proposal from American Tower, please reach out to us to discuss it.

(PS: the image for this post was created by AI. It’s so bad that I had to include it. It is not intended to suggest anything negative about either Crown Castle or American Tower.)

Steel in the Air’s 2024 Cell Tower Industry Predictions

Ken Schmidt — Tue, 26 Mar 2024 21:48:57 +0000

As we do every year, we like to make predictions about the year ahead. (It’s near the end of March, so you can see we were a bit behind—perhaps because of all the early activity in 2024. 😊) And without further ado:

1. 2024 will be slightly better than 2023, especially the last half. As wireless service providers (WSPs) reduced their capital expenditures, slowed down modifications, and stopped building new cell sites in the latter half of 2023, the industry slowed down. Going forward, this year will be better than the second half of 2023 but still be reduced compared to the full year 2022 and the first half of 2023. Why? Because the WSPs are rationalizing their 5G spending. The secret is out: 5G isn’t generating a significant amount of new revenue for the WSPs. While there are operating efficiencies to be gained from 5G, there aren’t any killer use cases that are driving growth. How do I know? Just look at the carrier’s recent commercials and see how the focus isn’t on 5G.

2. WSPs will increase the number of new site builds (NSBs) in 2024 as compared to 2023. The WSPs focused on modifying existing tower sites to add 5G capabilities in 2022–2023. Going forward, though, we expect to see a blend of modification activity (more later in this post) and new site builds. Already this year, we are seeing a lot more inquiries from landowners about new proposed tower leases than at this same time last year.

3. WSPs aren’t building that many towers themselves. Instead, there is a clear push to let private tower companies build the towers under what is known as the build-to-suit model. The WSPs have done a great job of letting the private tower companies compete for the limited number of build-to-suit opportunities. As some private tower companies become desperate to put committed capital to work, they are agreeing to ever worsening terms and conditions in their master lease agreements. The WSPs are attempting to insert the best negotiated terms from all their build-to-suit leases into a single “Frankenstein” template agreement. This leads to a race to the bottom for tower companies. And given the favorable terms in these build-to-suit master leases, it makes more sense for a wireless carrier to let a tower company take the risk and incur the cost of tower development.

4. Dish. I wish I had a good prediction about DISH, but the reality is that I don’t think anyone does, not even DISH. Things don’t look good for DISH. They passed on purchasing 800 MHz spectrum from T-Mobile, even though Charlie Ergen loves spectrum. They aren’t actively building in preparation for their June 2025 deadline and their cost of capital is horrific. They are losing subscribers quarter after quarter and there is virtually no marketing of the DISH network for more subscribers. They obviously have significant cash issues. Gun to my head, my prediction is that in 4 years, DISH won’t own wireless spectrum or a network.

5. Tower companies will pursue ways to replace the lost revenue from their tenant leases. One way that we addressed earlier this year is to seek prepaid leases whereby the landowner is offered a lump sum for a lease instead of a regular monthly lease payment. Tower companies like this model because landowners find it difficult to compare a single lump sum payment with the prospect of long-term rental income.

6. WSPs continue to look for opportunities to relocate off towers where the tower owner is charging exorbitant rent. We have detailed this build-to-relocate model before, where companies like Tillman Infrastructure build towers near existing towers, particularly in rural areas with no zoning. Alternatively, we have observed more situations where a WSP moves from one tower to another existing tower nearby. Primarily, this is happening with public tower company leases.

7. 2024 is the year where competition between the public tower companies will increase. We have seen more relocation of a carrier’s equipment from one public tower company’s tower to another tower company’s tower across the street in the last year than we have seen in the last decade. (So as not to mislead, the numbers are still small.)

8. Competition between private tower companies will hit its peak. There is too much cheap capital and too many tower companies out there chasing too-few build-to-suit opportunities. Some tower companies will dial back their build plans whether they choose to or not, while others already are being more selective.

9. Transactions with public tower companies are and will take longer. Perhaps WSPs are experiencing similar issues as we are in terms of dealing with the public tower companies, but with recent staff layoffs, it just seems like everything takes longer to complete. Cell tower lease buyouts and lease extensions/expirations take longer. Crown Castle, for example, reduced their lease extension/lease buyout team by 3/4s. Guess what takes longer now? Lest you think that this issue is solely that of public tower companies, there are some large private tower companies that simply ignore contractual deadlines, perhaps daring the landowner to evict them or terminate an agreement. The WSPs have been trying to push landowners to use landowner help desks (email submittals) with mixed results. Some issues are handled very quickly, but if the issue requires any nuance or is difficult, escalating to the right person can take forever. (HINT: if you are having difficulties getting answers or resolution from a tower company or WSP help desk, be the squeaky wheel!) But on the positive side, these mistakes can benefit landowners with leases. For example, on multiple occasions over the last year, landowners were not contacted until the last minute to negotiate on expiring leases. Personally, we love these situations, as the tower company’s leverage in these negotiations lessens the closer the lease gets to expiration.

10. AI. The buzzword in the tower industry these days is AI, as it is in almost any industry. How will AI impact the tower industry? I expect to hear tower companies mention AI in every earnings call, but in a broad sense: “AI will increase demand for edge computing,” but without any actionable guidance on whether revenue will be increased. Where I expect the true impact of AI to be felt in the near term is in further staff reduction. There are some job functions at carriers and tower companies that could quite candidly be handled by AI better and faster. Drafting and review of lease documents, review of plans and structural analyses, regulatory submittals, maintenance reviews, and permitting submissions. Basically, anything that is repetitive and consistent. And in contemplating the landowner helpdesk of the future, I can already hear myself screaming at the computer, “Live agent, live agent.”.

11. Be prepared for an onslaught of solicitations regarding cell tower leases. The nature of AI (iteration and correction, repeat) will allow smaller number of personnel to contact more landowners. And because AI can handle significantly greater amounts of data and learn faster from iteration, I expect the number of requests to landowners regarding lease buyouts, lease extensions, and lease renegotiations to increase dramatically. Without guard rails, AI “agents” will pry and persist at trying to find every permutation of an approach to a landowner until they find the ones that work best. AI agents, though, will also make material misrepresentations on accident, opening up the companies that use them to fraud in the inducement claims.

12. Private networking gets real. Rather than restate something that someone has already said better than I can, I would point to this LinkedIn post from Michael Collado on the boondoggle that of private network forecasts by industry experts. The problem with the private networking industry is that there is an unreal amount of hype and documentation of use cases propagated by the OEMs and system integrators who expected more work out of private 5G/private networking. The reality is here: it’s still hard to have the WSPs connect to your private network unless you are a larger, must-have venue or are willing to pay dearly to get it. That may be changing, but private networking remains just that—for the most part, private. Just like the hype of 5G, the hype of private networks has dissipated somewhat too. Don’t take this forecast the wrong way—private networking will grow and be one of a few parts of a coverage/data toolkit for enterprises and venues. But not remotely close to the pie-in-the-sky estimates publicly put forth by some industry analysts or the OEMs/system integrators.

13. The economics of operating cell sites and towers are changing slowly. While no technology (satellite or small cells) can replace cell towers in any material fashion, tower level economics are getting worse. It costs more to build towers; the tenants are trying to pay less while expecting more and they are more willing to relocate from overly expensive sites. Landowners and tower owners who rely solely upon what has worked in the past may receive termination notices they have never received in the past. At the risk of being self-serving, more now than ever, it pays to understand the overall market and the site-specific conditions of your lease or tower site. As they say, pigs get fed and hogs get slaughtered. Steel in the Air remains the best source of knowledgeable guidance in the industry, and we make sure you get today’s fair market value, not tomorrow’s termination letter. We welcome your calls and inquiries.

We hope you have found something of value in our predictions. There are some that we hope we are completely wrong about (DISH for example). We would love to hear your thoughts and feedback about our predictions or ones you think we have missed

Which US Tower Companies Were Most Active in Jan. 2024?

Ken Schmidt — Sat, 17 Feb 2024 20:53:16 +0000

We examined applications for environmental notice to the FCC for the last month. Here are the companies that have been most active in submitting to the FCC over that time frame. Notably, Tillman is still active, outpacing other tower companies. Vertical Bridge is next up with 36 new submissions, primarily under a subsidiary named “The Towers, LLC.” Verizon (including Alltel) and AT&T also crack the top 5. Boldyn Networks was previously Mobilitie. There are also a number of mid-sized tower companies on the list. Many of these new towers are being built as build-to-suit towers for AT&T and Verizon, along with a lesser number of towers for T-Mobile.

Compare this to our list of the top tower companies in the United States organized by number of towers.

2024 Rural Cell Tower Lease Update – Steel in the Air

Admin — Thu, 01 Dec 2022 16:07:49 +0000

As we enter 2024, we thought it might be helpful to summarize what we have been seeing with new leases and existing leases in rural areas. Please do not contact us about how you can get a tower on your property; it is not something we do. Please see our article on How to Get a Cell Tower on Your Property for more details on how you can try to do it yourself).

Activity on New Cell Tower and Leases in Rural Areas

Carrier Buildouts

In the last five years, there has been a decent amount of activity in building out rural areas with additional cell towers. The Big 3 wireless carriers (AT&T, T-Mobile, and Verizon) have all improved their coverage in rural areas.

AT&T: AT&T was awarded the FirstNet contract and recently announced the second large phase of expansion. FirstNet is a nationwide broadband network intended to assist first responders with wireless public safety communications. The FCC auctioned off spectrum that the winning bidder could use if they agreed to the following: (1) expanded network capabilities, especially in rural areas, and (2) priority access to the network by first responders. As a result, AT&T has been adding rural towers across the United States to meet their coverage requirements. AT&T was adding approximately 2,000–3,000 new cell sites per year, but in the last two years, they have slowed down significantly. We expect that AT&T/FirstNet will add 1,000 to 2,000 new cell sites per year in 2024 and 2025.

Verizon: In an effort to keep public safety users on their network, Verizon continued to build out rural areas with low-band spectrum and is densifying with mid-band spectrum to outpace AT&T. Verizon is the steadiest of the carriers in terms of new builds. Based upon inquiries so far in 2024, it looks like Verizon is going to be active this year.

T-Mobile: Although it has slowed within the last three years, T-Mobile was aggressively building out new areas where they did not have coverage. T-Mobile’s coverage map is pretty similar to the other carriers now. However, that effort has slowed in the last two years as T-Mobile focused on deploying 5G across its network (75% complete) and integrating the Sprint network and towers into their own network.

WISP Buildouts

Wireless Internet Service Providers (WISP) have been active in the last few years in deploying broadband to underserved areas, i.e., those neglected by the Big 3 wireless carriers. Currently, there are 2,800+ WISPs in the United States. These WISPs collectively serve over seven million subscribers across the US. Compare that to AT&T, which serves 196 million wireless subscribers across the US. WISPs lease space on towers as well.

Tower Company Buildouts

In 2023, we estimate that tower companies and wireless carriers will have built approximately 4,000 new cell towers in the United States. In most cases, carriers and WISPs need new towers to provide service to more rural areas. They either self-perform (build the towers themselves) or they use third party tower companies to build the towers for them. The industry calls this “build-to-suit.” There are a few hundred small and mid-size private tower companies that build towers for carriers. Here is a list of the biggest cell tower companies in the US.

In the last 5 or so years, we have seen a new breed of tower company emerge. These tower companies focus on building new towers near existing towers. The objective is to relocate wireless carriers that are paying high rents on the existing towers to the new towers for a reduced rent. This is known as “overbuilding” or “build-to-relo” tower development. The largest of these tower developers is Tillman Infrastructure, which has built more than 1,500 “build-to-relo” towers near existing public tower company towers. Most of these “build-to-relo” towers have been built in rural areas.

Fixed Wireless

Fixed wireless is the use of wireless service to provide broadband to the home. Both cellular providers and WISPs provide fixed wireless service. Fixed means that the connection to the home or business is fixed—it does not move. Typically, an antenna is required on the consumer end to connect to the tower. The antenna can be added to a roof or a window. The wireless carriers also offer fixed wireless broadband in areas where their network has additional capacity.

Collectively, there are approximately 6 million people using fixed wireless access. 90% of all new broadband subscriptions are fixed wireless.

Click the links below if you want to see who has fixed wireless internet in your area (note that we have no affiliation with any of these entities or services):

AT&T: https://www.att.com/internet/fixed-wireless/
T-Mobile: https://www.t-mobile.com/home-internet
Verizon: https://www.verizon.com/home/lte-home-internet/
Others: https://broadbandnow.com/

What This All Means:

The net result of all this activity is as follows:

There are more towers in rural areas.
Some rural landowners are being approached for new towers.
Rural residents typically have access to better and possibly cheaper wireless broadband services than before.

Activity for Existing Cell Tower and Leases in Rural Areas

Next, we examine what is happening with existing cell towers.

Rural Expansion is Good for Existing Towers

The rural expansion mentioned above is positive for most landowners with existing towers on their property. Wireless carriers and WISPs alike prefer collocation on existing towers first. Collocation is when a carrier leases spaces on a tower from the tower company to install their equipment. There is a direct correlation between the value of a ground lease and the number of carriers on the tower. Towers with more carriers tend to have more valuable ground leases.

Build to Relocate Is Not Good for Existing Tower Leases

In rare cases, though, some rural landowners are losing their tower leases due to “overbuilding.” When a build-to-relo tower company builds a new tower next to an existing tower, if all the wireless companies move to the new tower, the owner of the existing tower will terminate their lease. Unfortunately, by the time a new tower is built near an existing tower, there isn’t much the landowner under the existing tower can do.

Rural Cell Tower Leases Signed in the 1990s and Early 2000s are Expiring

For some of the earlier towers built in rural areas, the original leases are near expiration. The typical cell tower lease lasts 25 years, and there were a lot of towers built in the late 90’s and early 00’s that are now coming up for expiration. Landowners under these towers are likely getting a number of calls and inquiries about extending these leases from the tower owner. We have found that lease rates for expiring leases are typically higher than lease rates for new leases. Thus, what you negotiated 25 years ago does not need to be what you accept today. This is especially true with rural leases. On proposed leases, the value is generally what your neighbor will accept. With expiring leases, the tower owner would have to pay for an entire new tower, which can easily exceed $400,000 or more. Thus, most landowners in rural areas with expiring cell tower leases are in a better position at expiration to negotiate than when they originally signed the lease.

Cell Tower Lease Buyout Valuations are High!

Most landowners with cell tower leases (rural or urban) have also received offers from multiple companies to buy their leases. Over time, these offers have continued to increase. Offers in the first half of 2023 were higher than at any point in the past. Offers are consistently exceeding 19 times the current annual rent from the cell tower lease. For example, if your lease currently pays $10,000/year, companies are willing to buy the lease for $190,000 or more. That doesn’t necessarily mean that landowners should sell their leases, though. In late 2023, though, offers started to decline. However, simultaneously, we also feel more secure about the longevity of most cell tower leases. Thus, the decision to sell should be one that is based on what is best for you in the long term, whether that means keeping the revenue stream or selling the lease for a lump sum.

Conclusion

Generally, wireless providers and WISPs will continue to build in rural areas, improving the availability and reducing the cost of wireless broadband and mobile service. Further, cell towers and cell tower leases are here to stay. They remain desirable additions to property and add value to the land. If you need assistance with a proposed lease or an existing lease, please don’t hesitate to contact Steel in the Air. As a reminder, we are unable to help you get a new lease on your property or find new revenue sources for your existing lease, no matter how great of a location you have.

5G Site Marketing: Scam or Opportunity?

Admin — Wed, 23 Mar 2022 12:15:57 +0000

One of the more disturbing trends in 2021 and early 2022 is the rise of the “5G site marketing companies.” Over the past year, we have observed a substantial increase in the number of proposals issued to our larger municipal and corporate clients. Some of these companies include 5G, LLC.; SiteMark, LLC.; Aon 5G; and TETTO 5G. The public tower companies (American Tower, Crown Castle, Vertical Bridge, SBA Communications) offer site management services to facility owners as well. Please note that Steel in the Air is not related to any of these companies. We don’t offer 5G site marketing services.

WHAT 5G SITE MARKETING COMPANIES PROMISE

These “5G site marketing” proposals share the following aspects:

They all point to industry quotes that there will be upwards of 1,000,000 new “5G cell sites” deployed, without distinguishing that most of these will be small cells.
They promise that these cell site leases will produce ridiculous rental rates for the landowner. For example, we have seen more than one proposal from these companies suggesting that $10,000/mo. is possible. Another company suggested that every property they find a lease for would be worth $1,000,000 to the owner.
The marketing company will take an exclusive right to market the properties.
In exchange, the landowner will receive 75% of any rental payments procured.
They suggest that “take rates” (i.e., the % of buildings that would be used) range from 5-25%.
They have flashy marketing presentations that show how much “lifetime” value they can add to a property in rental income from 5G cell sites over the years.

The glossy proposals show pictures of buildings with multiple wireless carriers leasing space. They spout statistics pulled from industry vendors showing how much wireless use is increasing year over year and how many cell sites will be needed. They promise significant additional income.

WHAT 5G SITE MARKETING COMPANIES DON’T TELL YOU

The vast majority of the 800,000 to 1,000,000 new sites “required” for 5G will be small cells. Why does that matter? Because the FCC and state legislation in 28 states allow for wireless providers to install small cells in the public Right of Way for less than $270/year (yes, per year). To date, 95% of all small cells deployed are in the public right of way. So, of those 800,000 small cells, less than 5% of them will go to private property and significantly fewer will be leased because some company marketed the site to a carrier.
60-70% of all cell sites in the US are on towers. 75% of all future proposed cell sites will be installed on towers. Therefore, unless you own a tower, you are unlikely to receive income from a cell site lease.
Even if there is no tower nearby and you own a building, it is very unlikely that any given building will be chosen as a 5G cell site. Per An Analysis of US Building Stock, there are:
- 5.2 million multifamily residential buildings
- 5.5 million commercial buildings
- 350,000 industrial buildings
- 240,000 military buildings
- Let’s assume – for ease of discussion – that half of these buildings are tall enough to be considered as a location for a cell site. That means there are 5.5 million buildings available for cell sites. Even the wildest projections anticipate less than 100,000 new macrocells will be built over the next 10 years. If we assume that 75% of these will be on existing or new towers, that leaves 25,000 to be installed on buildings. Even if these cell sites are distributed evenly and only on buildings without cell sites already – that means there is less than 4/100ths of 1% chance that your building will be chosen.

Very few landowners in the US receive anywhere close to the $10,000/month some 5G marketing companies represent as possible per site in their marketing proposals. In our database, less than ½ of 1% of all cell site leaseholders make that much.
Many of these marketing agreements are exclusive, which means that no one else can market your property. Even if the marketing company is unsuccessful at bringing anyone to your property, you are not able to terminate the agreement.
Worse yet, if the wireless carrier approaches you directly – you still owe the marketing company a percentage of the income, despite the fact that they did nothing to procure the tenant.

WHY WE AREN’T FANS OF SITE MARKETING & WHY WE DON’T OFFER THESE SERVICES

If you’ve read our content over the years, you know that we aren’t big fans of marketing agreements. We have reviewed and advised our clients in the past who have entered into them and across the board, we have found that they rarely bring in any substantive income. In the cases where they do, we believe that the wireless provider would have naturally found the property on their own – with or without the marketing agreement in place.

No amount of marketing will make an undesirable site desirable. Carriers place their sites where they are due to engineering requirements. If a site is too close to other sites or too far, they won’t use it. If your site is too short or too tall, the carrier will go to nearby sites and find one that works.

These marketing companies suggest that they will put together a list of their sites, and that carriers will seek them out. However, as someone who has previously managed site acquisition projects, I can tell you that most companies rarely (if ever) looked at “lists” of potential buildings or vacant land. We did use lists of existing towers. We (and the carriers) know that 7 times out of 10, if they approach a landowner, that landowner will be interested. They don’t need a list to know this.

DO 5G MARKETING AGREEMENTS WORK?

As an example, a client of ours owns hundreds of large commercial developments across the United States. They received a proposal from a site management company to market their properties for cell sites and small cells. They engaged us to review the proposal and we advised that it was unlikely to be successful, but that it didn’t hurt to try under the right terms and conditions. Within 3 years, the management company didn’t find a single tenant – not one across the hundreds of desirable properties throughout the US

BUT WHAT DO YOU HAVE TO LOSE BY SIGNING A SITE MARKETING AGREEMENT?

To answer this question, it helps to understand why marketing companies are spending so much time and effort to get you to sign up with them. They know that if they can sign large property owners, the law of averages means that some of the properties may eventually see interest from a wireless tenant. Once they sign up landowners or building owners, there are nominal costs in marketing the sites. Create an excel spreadsheet, put a map of the sites on the website, send the list to carriers, and wait. Even if only 1% of all sites are used, if the marketing company has signed up 100,000 properties, that means 1,000 will be hits.

The agreements are very one-sided. Even if the marketing company is unsuccessful, you are still bound to a long-term agreement. If they do procure a lease, you will owe them 25% of the lease for the life of the lease EVEN IF YOU TERMINATE THE MARKETING AGREEMENT.

Some of these marketing agreements mandate that you use the marketing company’s lease agreement. Because the marketing company wants to maximize their long-term revenue, they won’t always act in your best interest. The agreements are carrier friendly, because ultimately the marketing company knows that the more the lease is modified, the less likely the carrier is to sign it.

In the future, if you end up having to renovate the building or property or wish to move the site, not only do you have to negotiate with the carrier, but you also have to negotiate with the management company. We have assisted landowners in trying to get out of management agreements and leases – it is significantly more difficult than working directly with the carrier.

There is a strong probability that these marketing companies will be bought by other companies in the future, so the people you are dealing with now likely won’t be the same as those you will deal with in the future.

CAN I DO MY OWN MARKETING?

Yes, but don’t expect immediate success. Even in the best scenarios, your efforts are likely to be unsuccessful. Please see our article on how to get a cell tower on your property for more details on steps you can take on your own – and without paying 25% to anyone.

WHAT SHOULD I LOOK FOR IN A MARKETING/MANAGEMENT AGREEMENT?

You should NEVER grant the marketing company power of attorney. Nor should there be any requirement that you sign a lease on any property.
There should be language that commits the management company to acting in your best interests, not the carriers’.
There should be different revenue share percentages due depending upon whether the wireless carrier approaches you directly, or they approach the management company (higher if they find the tenant for you).
The management company should be required to pay you your percentage of any and all payments from the carrier to the management company regardless of what they are called. Some management companies charge a “revenue share reimbursement” so that they are paid back any revenue share they have to pay the site owner.
You should have complete control over where and how the carriers install on your roof or property.
Any lease should have a relocation clause within it in the event you need to terminate or relocate the equipment to renovate or replace the building.
Most importantly, you must have the right to terminate the management agreement if the marketing company is unsuccessful at producing leases on your properties. If you do terminate, the marketing company should not have the right to continue to collect revenue through the end of any leases they found.

I AM STILL INTERESTED IN FINDING THE RIGHT MARKETING COMPANY. HOW CAN YOU HELP?

We can evaluate proposals that you have received and review your properties to see whether there is likely an upside in the future. We can share our experience on what traits are more likely to indicate success. If you want to issue an RFP to distribute to various marketing companies, we can help draft it and review and rank their responses. We can review the proposed management agreement and discuss the business terms and language with you and your attorney.

PLEASE DO NOT CONTACT US TO HELP MARKET YOUR PROPERTIES OR FIND A MARKETING COMPANY TO MARKET YOUR PROPERTIES. Please reach out to all or some of the companies listed above directly. Then if you find one you like, we can be retained to help evaluate their proposals.

Our 2022 Predictions for the Wireless Industry

Ken Schmidt — Tue, 18 Jan 2022 10:47:31 +0000

Steel in the Air’s 2022 Predictions for Cell Tower Leasing and Valuation

While 2021 certainly impacted many industries negatively, the wireless industry wasn’t one of them. This past year was a particularly strong year for tower companies and landowners. Looking forward into 2022, we see more of the same.

Wireless Service Provider Predictions

Wireless service providers will aggressively continue to deploy new spectrum on existing sites. AT&T and Verizon will accelerate their C-Band plans despite the most recent dust-up with the FAA and the airline industry. T-Mobile will complete most of their 2.5GHz overlays for existing T-Mobile sites and their conversions of Sprint “keep” sites. Just this week, AT&T and DISH won nearly 2/3rds (by $ amount) of the spectrum in the 3.45GHz action. This spectrum all needs to be deployed to work. Accordingly, there will be more modifications to existing sites in 2022 than in previous years.
The Big-Three carriers will continue to build (or start to build) infill sites to fill in gaps in 5G between existing sites. While all Big-Three carriers have 5G on low-band spectrum, it is nominally better than 4G. Thus, users will start to observe noticeable speed differences when they leave “mid-band” 5G and move into low band 5G. Because many cell sites were designed originally for 1.9GHz, more will be needed to cover the same area in 2.5GHz or C-Band. We have already heard of elevated “greenfield” build plans for AT&T and Verizon in 2022. Private build-to-suit tower companies will likely be the biggest beneficiary of these infill sites.
DISH will launch its first market around the middle of the year. We will finally get to see the new network in action. However, some anticipated DISH markets are currently forecast for 2022 will slide into 2023. Building a nationwide network from scratch in a matter of years is difficult, even given the best intentions. Doing it while trying to save money is even harder. We have been involved in network launches, and deploying the first 80% of sites is easy; it is the last 20% that cause the most headache. As the year goes on, tower owners and building owners should expect that DISH will offer more in rent and signing bonuses to launch critical sites and markets. Simultaneously, DISH capex and opex will measurably rise this year as the number of sites required to build out the market will grow beyond current industry expectations.

Predictions for Tower Companies

The public tower companies (AMT, CCI, SBAC, DBRG) will have their peak year in 2022 in terms of US carrier activity. With new collocations from infill and DISH and substantially high modification activity, this year should be similar or slightly outpace to 2021 in terms of activity. (Before you run and invest in the tower companies- some analysts feel that they are already priced at a premium.)
Tower valuations will remain at or near an all-time high. Between low-interest rates, aggressive acquisition strategies by the public tower companies, and new buyers (including international infrastructure funds) entering the field with lower ROI expectations, 2022 should be another banner year for tower owners looking to sell.
Significantly more Sprint sites will be decommissioned in 2022 than in 2021. As master lease commitments with the big tower companies start to end, T-Mobile will look to quickly shed the expense of operating two networks. If T-Mobile hasn’t contacted you yet, the probability that they won’t keep your Sprint site increases by the month.

Predictions for 5G

2022 will not be the year of 5G. While we will get mid-band 5G across much of the US from T-Mobile, and to a lesser extent, Verizon and AT&T, there isn’t (and won’t be) a killer application yet. The 5G user experience will be remarkably similar to the 4G experience (only faster) for the consumer. However, venue owners and enterprises should expect a full-on rush by both the carriers and third parties interested in providing private LTE/5G networks in venues using CBRS spectrum (both licensed and unlicensed). The wireless service providers realize that the money in 5G is not with consumers but with businesses and enterprises seeking better and more secure communications. Expect the providers to promise the world of 5G, but the actual experience to fall short, at least for now.
On a related 5G note, the carriers will not deploy a sizable number of new small cells in 2022. Last year saw limited activity from wireless service providers in the deployment of small cells, which seemed to decline as the year went on. As their focus will be on mid-band modifications, new infill macrocells, and fiber deployment, the wireless service providers will allocate capex in those directions.

Predictions for Leaseholders

Landowners will continue to reap the rewards of cell site leases, especially those with sublease revenue share clauses. Given all the bullish activity we have forecasted above, tower owners should see additional revenue. As they recevied additional revenue, the value of the tower climbs. As the value of the tower climbs to the owner, the value of the ground lease underneath it typcially climbs as well. Even if your lease has awhile until expiration, the offers to extend the lease will continue far in advance of expiration.
Lease optimization companies will continue to pester leaseholders to negotiate lower lease rates and better terms on existing leases despite the boon year for towers. As we observed last year, agents for lease optimization companies will continue to suggest that towers are becoming worthless due to 5G, small cells, satellites, balloons, consolidation, and every other reason they can come up with. Rest assured that your lease is as valuable today as it has been in the past, if not moreso. For example:
Cell tower lease buyout valuations will remain at an all-time high. With multiple lease buyout entities actively competing for lease assets, sellers stand to benefit once again. Additionally, one of the buyout companies that previously shut its doors will be resurrected this year, which leads to further competition for those limited number of lease assets that are available. However, there may not be as many sellers in 2022, given that many leaseholders sold in late 2021 to avoid the possibility of increased capital gains tax rates in 2022.

Predictions for Steel in the Air

Lastly, at Steel in the Air, we look forward to another year of helping landowners and structure owners make data-driven, unbiased, and informed decisions regarding their leases and assets. As we enter our 18th year, we remain excited and engaged in the wireless industry. We love helping landowners and tower owners maximize their lease and tower assets. We expect to spend more time with private LTE and private 5G over the next year.

Expect more helpful and thought-provoking content, including more webinars in 2022. Join us on January 26 at 3pm for our first – a discussion with Bruce Wendt of SteelTree Partners. Bruce will share his thoughts about tower valuations and the market for towers in 2022.

If you would like to discuss these predictions or need assistance relative to cell site leases or towers, please reach out to us or share a question/comment on our Q&A. Happy to share our thoughts or learn more about what you envision for 2022.

Where Elliott Management’s Attack on Crown Castle Small Cell Strategy Hits and Misses

Ken Schmidt — Tue, 07 Jul 2020 12:20:47 +0000

We reviewed the Elliott Management slickly produced attack on Crown Castle ($CCI). In short, Elliott Management believes that CCI has underperformed its peers, American Tower (AMT) and SBA Communications (SBAC). While the underperformance is clear, I also think that Elliott Management’s analysis (carefully?) fails to give any credence to the opportunity that fiber/small cells may provide to Crown Castle that its peers will miss if small cells take off.

WHERE IT HITS

1. I agree that foreign investment in towers is preferable – we have been pointing to American Tower ($AMT) among the Big 3 as our top pick for a few years now based primarily on the diversity of their international portfolio and their focus on new-builds.
2. I don’t understand why CCI’s management abandoned international tower development or acquisition while focusing on fiber acquisition. They aren’t mutually exclusive and CCI was just as privy to the 3G/4G cycle of growth in the US that is occurring internationally now.
3. I agree that CCI is better positioned in the US for 5G buildout on towers (we previously did point by point analysis on Rural/Suburban/Urban towers for big tower companies and came to similar results- also looked at # of competing towers per tower company tower and CCI was generally higher than its peers which shouldn’t matter as much anymore given the reduction of new macrocell builds).
4. I suspect that CCI could do a better job managing the fiber business side of their fiber acquisitions.
5. I believe that the window for the current strong growth on existing towers in the US will be strong for the next 3-4 years and then start to taper, while international will stay strong or even accelerate.
6. One point not mentioned in the analysis but favorable to Elliott’s guidance is that CCI’s focus on small cells has likely negated some of their strength in negotiating Master Lease Agreements (MLAs) with the wireless carriers vis-à-vis their competitors who can afford to be “ornerier”.

WHERE IT MISSES

1. There is very little analysis of the future of CCI fiber/ROI as it pertains to small cells in the US. I am unsure from the writeup whether Elliott simply doesn’t believe lease-up will occur or they are ignoring what has to be CCI’s main justification for their strategy. Elliott’s analysis shows tower level economics but omits entirely any small cell economics. Elliott’s writeup is solely focused on near term ROI. If near term ROI is the only metric of concern, then no company would have pursued new build towers in the nascent days of cellular nor would any company pursue a multi-tenant small cell fiber centric build. It took two decades for the wider investment community to appreciate the tower model.
2. I believe it is too early to tell on the possible success/failure of CCI’s small cell strategy. We don’t see how CCI can’t significantly increase ROI in the short term without changing the way they build fiber- which would negate the upside from future small cell deployments which require greenfield builds to see higher collocation rates
3. I agree though that the time horizon for ROI seems to be pushing further out than expected. We also suspect that the time horizon on maturing these “immature assets” is longer than CCI expected. We don’t know if this is because of poor execution or unrealistic expectations. (If the latter, then we had unrealistic expectations as well). Other than Verizon, the wireless carriers haven’t adopted small cells as fast as we might have expected. Elliott’s writeup ignores completely
4. Eventually, the providers will focus on small cells. Whether they will rely upon CCI or self-build or otherwise will depend upon how much impact Verizon’s aggressive build plans have on subscriber retention/growth. The more success Verizon has, the faster the other carriers will need to deploy which will be beneficial to the lease-up of CCI’s fiber holdings.
5. I also believe there should be upside in the future especially to smaller entrants to the market who need a mobile strategy (or MVNOs that want to reduce MVNO costs)

WILL THIS CHANGE HOW CCI REPORTS ON SMALL CELLS?

I am hopeful that Elliott’s missive causes CCI to provide more transparency on their small cell success or lack thereof. I have found CCI’s reporting to be cryptic especially how they treat collocation of small cells and in their sharing of details related to typical MLAs. Unlike towers where the economic model is simple and transparent, CCI’s small cell program is an enigma. It is difficult to verify or analyze and, in that regard, it makes me (and I assume investors) suspicious of CCI. There seems to be a lack of clearly enunciated goals (at least to the investor community) related to small cells. CCI has benefitted from being part of the less understood 5G investment opportunity window where anything 5G related is attractive. However, as the allure of the “shiny bauble” of 5G fades and its reality (positive and negative) develops, investors large and small are starting to ask more intelligent questions which will require better information from CCI than is currently provided.

What We Found Most Interesting in American Tower’s Q1 2020 Earnings Call.

Ken Schmidt — Fri, 01 May 2020 09:11:22 +0000

American Tower announced earnings earlier this week and we reviewed their earnings call transcript to get a better feel about what went right and wrong for American Tower. (Mostly right) Here are 10 of our observations.

American Tower confirmed guidance for 2020. While many industries and companies are withholding guidance for 2020 due to the lack of clarity due to COVID-19, American Tower committed to their pre-COVID-19 guidance. Crown Castle did as well, showing the resilience of the tower industry.
Average smartphone data use in 2019: 9GB: Estimated 2025: 45GB. Also- 70% of cellular traffic in 2025/2026 will be #5G.
American Tower broke down the return on investment for its tower assets in the US.
- Prior to 2005: 24%,
- 2005-2010: 17%,
- After 2010: 6%.
- Not coincidentally- the earlier years were when ATC was doing build-to-suit
AMT only built 4 (yes four) sites in the US in Q1. They also acquired 19 towers in the US while decommissioning or selling 15. The total increase in the US: 8 towers. In other words, American Tower isn’t buying or building much in the US at all. We believe that this is due to the aggressive Build-To-Suit terms offered by private tower companies and a reluctance by carriers to enter into build-to-suit agreements with the public tower companies.
AMT has 3,000 total tenants besides the big 3 cellular providers in the US. Collectively they generate more than 15% of overall US cashflow. I suspect though that most of this comes from broadcasters as ATC has acquired and built a decent number of broadcast towers in the US.
AMT experienced churn of 2% in Q1 2020. Churn is the loss of revenue as tenants terminate their leases. Surprisingly, no analysts asked a questions about why.
American Tower purchased $33M of its ground leases from landowners. This was down from the two previous quarters.
There have been no revisions to the T-Mobile/American Tower master lease agreement yet regarding the T-Mobile/Sprint merger and what equipment will be allowed on the towers. American Tower is likely to use the merger to press for terms that limit the overall loss from future Sprint lease terminations. T-Mobile wants to drive costs down while they install additional equipment on those Sprint and T-Mobile sites they are keeping.
As they do in many of their earnings calls, American Tower continues to provide lip service to data centers, fiber, CBRS, edge computing. However, as with previous calls, there is little revenue from these endeavors, and AMT is still unwilling to commit to any real guidance for revenue in the future.
American Tower is experiencing some slowdowns due to #COVID19 primarily on new tower builds which we assume are outside the US (see point 4 above). However, for the most part, carriers are still active and proceeding with their modification and development activity.

Overall, AMT’s earnings call was positive and reflective of how the tower industry really isn’t suffering like other industries.

If you have an American Tower lease and are curious about how these earnings impact you or need help with other American Tower lease issues, please contact us.