Cell Towers and Technology: Why Cell Towers are Here to Stay

Are you wondering how wireless industry dynamics and new technologies will affect the cell tower and cell site industry? You’ll be happy to hear that cell towers are here to stay. Here’s why:

Consumer Demand.

Cell Towers and Technology

Consumers have come to depend upon wireless services for just about everything under the sun, from staying connected to family and friends, to conducting business transactions to providing critical information, such as location data, as well as entertainment galore. In fact, consumer demand is still on the rise, and is projected to remain so, as wireless carriers deploy new technologies in an effort to provide seamless, high-quality data-driven services to their customer base. Industry analysts project that the United States has yet to reach half capacity as far as the number of cell towers that will fully saturate consumer demand for wireless voice and data services.

  • During the past five years, the number of households without a land-line (“wireless only”) has more than doubled – to 36%, and is still on the rise.
  • By 2014, U.S. wireless networks will carry approximately 40 times the amount of traffic they carried in 2009.
  • SmartPhone and tablet usage is steadily on the rise and by 2020, a majority of the people in the world will use their mobile device as their primary Internet access tool (in place of PCs).

Benefits to Businesses.

Businesses have come to rely upon wireless broadband services to stay connected with co-workers while satisfying their customers’ needs for immediate gratification. Improved communications result in a faster transfer of information and resolution of purchase and service issues. Cell phones, laptops and netbooks combined with GPS, Wi-Fi and Bluetooth wireless technologies have created the potential for a powerful mobile workforce, while allowing small companies and start-ups the opportunity to compete with established corporations.

  • Businesses utilize wireless services to increase productivity and efficiency.
  • Wireless devices are used to track inventory and transactions.
  • Wireless infrastructure enables advanced machine-to-machine communications to improve business efficiency, electrical efficiency, and worker efficiency.
  • Wireless communications reduces costs and are cheaper to install and maintain.
  • Wireless technology permits businesses and employees the flexibility to move locations or work from anywhere – from the dinner table to the beach.

Economic Stimulus.

Wireless infrastructure investors have already invested over $273 billion to deploy and update wireless networks, a number that rises each year. PCIA President Jonathan Adelstein says that the industry will generate $1.2 trillion in economic activity over the next five years, as well as create 1.2 million new jobs. In addition, wireless carriers have petitioned the NTIA (Department of Commerce’s National Telecommunications and Information Administration) to clear underutilized government spectrum bands below 3 GHz, which they say are necessary to satisfy consumer data-driven demand. This is scheduled to happen, at least in part, by February 2015, and will raise between $3-6 billion – a significant economic surge.

Carrier Competition.

In the FCC’s 2013 wireless industry report, Commissioner Mignon Clyburn called the wireless telecom industry the “shining star” of the American economy and said that it has succeeded “precisely because the government has largely kept its hands off of it. “Increasing government control of this freedom-enhancing economic engine would only slow it down and undermine America’s global competitiveness.”

  • As of October 2012, 82% of U.S. consumers had a choice of at least four wireless service providers.
  • ~92% had a choice of at least three.
  • In rural areas, the percentage of the population (POP) served by 3+ carriers increased from 38% to 65.4 % between August ’10 and October ’12.

The top five wireless carriers have been in a heated race to provide nationwide services to as large of a population base as possible. They understand that subscribers want fast, seamless services, and each of them has begun (or is nearly finished) deploying 4G LTE network upgrades.

Public Safety.

As part of the 2012 Middle Class Tax Relief and Job Creation Act, the congressionally mandated First Responder Network Authority (FirstNet) was established, and tasked with creating a “nationwide interoperable wireless broadband network that will enable, police, firefighters, emergency medical service professionals and other public safety officials to more effectively communicate and do their jobs.”

Their objective is to complete 4G LTE coverage of every square meter of the United States, which will provide wireless broadband communications supporting voice, video and data to all interoperable agencies across jurisdictional lines. The FCC has allocated portions of the 700 MHz band to accomplish this and will rely on a multicarrier network to sustain a reliable level of security. This will complement existing network infrastructure and augment any emergency services that are currently vulnerable, and most importantly, will ensure that first responders can rely upon wireless broadband communications without being dependent upon a limited bandwith supply or competition from the public.

FirstNet’s efforts will likely yield some incremental growth either in terms of new equipment modifications on towers or new leases as FirstNet adds equipment to cell tower nationwide.

How Does this Affect Property Owners, Municipal Governments and Small Tower Owners?

Consumer demand for higher speeds brought on by robust and rising Smartphone and tablet usage, and the pervasive 4G technology migration, will drive future demand for cell site leasing. The number of cell sites in the U.S. alone is expected to surpass 400,000 by 2015. AT&T alone will build 10,000 new cell sites, 40,000 small cell sites and 1,000 distributed antenna systems in 2013/2014. It’s safe to presume that Verizon will closely match this number, and that Sprint and T-Mobile will not be far behind. This is good news for landowners, building owners and municipalities who are engaged in cellular lease negotiations.