Cell Carriers and Tower Companies all Joining the Renegotiation Fray

In the last few weeks, I have received inquiries from a number of cell site lease holders who have been approached to renegotiate their cell site lease.

The reasons for these requests run the gambit from funny to just outright sad. Sometimes, there is a legitimate reason- such as the fact that Cingular and AT&T merged or that Sprint and Nextel merged. In these cases, there is some duplication. And in some cases, the original lease has escalated to the point where it actually is more cost efficient for the carrier to start looking for a new site. Some examples of negotiating tactics:

TMobile has been sending out letters implying that the fate of TMobile hinges upon the cell site leaseholder reducing their rent. That the landowner should bear the responsibility of TMobile’s spectrum woes and 3G upgrade path difficulties. This is laughable.

Crown Castle is sending letters to landowners suggesting that the towers aren’t as profitable as some of their other towers. Yes, they confirm that they are making a profit, but Crown thinks that they should be making more. The best way for that to occur is for the landowner to contribute to Crown’s profit by reducing their rent. Crown will even go as far as to share their revenue and expenses on the tower so that the landowner understands how “dire” of a situation this actually is.

Verizon takes a much more reserved approach- suggesting that the lease is simply not fair compared to their average lease in the area. They fail to mention that not every parcel has the same value for a cell site- and that they agreed to pay more in the beginning because of that. That averages consist of both higher and lower lease rates.

In any case, the game is the same. For the most part, there is no reason for the landowner to consider these negotiation ploys and reduce their cell site lease payments. But if you have a cell site lease that is higher than average, then you should probably evaluate this further. If you need assistance, please contact us and we can help.

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