Cell Tower Info Blog

Which Stealth Cell Tower is more Stealthy?

2009-06-22T07:20:00.003-04:00

Reading an article in the Press Democrat for Santa Rosa, CA where they show two separate stealth cell towers. The article is not particularly innovative- just commentary on the battle between aesthetics and wireless expansion. However, the reason that I found it interesting is that they contrast two stealth towers. (Photos from Press Democrat)

The first is a water tower at a farm:

The second is a stealth pine tree in the middle of an orchard:

Clearly, one of these accomplishes the objective of being fairly stealthy- in that it is not readily apparent without a second look where the cell tower is. The water tower is well done- fits the environment. The pine tree on the other hand is ridiculous.

The question that remains is whether the second tower is really that much better than a typical monopole in terms of visibility? This is similar to a 100' pine tree tower near downtown Tampa that rises out of a commercial area. It is completely out of place. Seems to me that stealth towers should actually be stealthy in the area that they are located. This burden falls on the local land use planners to actually understand what they are approving.

Crossroads Wireless- Bankruptcy!

2009-06-15T08:01:00.002-04:00

Many people contacted Steel in the Air, Inc about the possibility of getting assistance with negotiating land leases with Crossroads Wireless. After one or two consultations, we chose not to take on any of these clients because our experience in dealing with Crossroads agents proved that they would not make changes to their lease. At the $300/mo to $400/mo that Crossroads was offering, we suggested to potential clients that they should really consider the liability that they were incurring by working with Crossroads. Furthermore, we suggested people did not need to retain us unless their property was special or unique because they were not likely to get anything more on their lease.

None of our clients chose to go forwards with Crossroads. In hindsight, that may have been a wise decision. In February of 2009, a group of Crossroads creditors chose to file for involuntary bankruptcy for Crossroads. The Bankruptcy Court granted an order to convert the bankruptcy to a Chapter 11 reorganisation.

As it pertains to land leases, Crossroads was successful in signing up 2000 or so landowners. They now want to get out 197 of those leases. Whether these leases are ones where they actually started construction is unknown. Perhaps the leases that they want to retain are ones where they haven't started construction or they have finished construction.

For more on this situation, please read an excellent article on the subject at Wireless Estimator.

T-Mobile Cell Tower Construction On Hold.

2009-06-01T12:25:00.003-04:00

This afternoon, one of our clients who had negotiated an agreement with T-Mobile for lease of their land received the following response from T-Mobile as to why their lease was not signed:

"As I mentioned during our conversation, due to the Economic Situation, T-Mobile is not moving forward at this time, with any leases, since no towers are going to be built. We would like to keep this site as a possibility for future reference, since it is a future interest for T-Mobile."

Our client was understandably angry because this particular lease reimbursed him for legal fees that he had already expended. So T-Mobile's failure to sign the lease meant that he wasn't going to be reimbursed even though he had done everything they had asked of him and had signed the lease.

It appears from this message that T-Mobile tower construction nationwide is on hold. We have heard a rumor that capital expenditures from T-Mobile in some markets have been dropped 90%. We suspect that they are still continuing with construction on some towers but that a budget hold has been placed in effect and a good number of towers are not being constructed at this time. In our experience, these setbacks are typically an indicator of one of the following:

1. Poor financial performance: T-Mobile has not been having a banner year.
2. Possible merger: Carriers typically stop construction prior to announcing a merger.
3. Need to reallocate budget for 3G.

I believe this is probably indicative of the 1st scenario. If you are in a similar situation, there isn't much you can do other than wait. Whatever you do, there is no cause to get angry towards T-Mobile.

Top 10 Pieces of Advice for Landowners

2009-06-01T09:26:00.002-04:00

1. Do know that their first offer is almost never their final offer.
2. Don't ever assume that your neighbors/friends/family knew what they were doing when they negotiated their own leases.
3. Don't ever sign a lease that doesn't include the full construction drawings as an exhibit.
4. Don't assume that every lease must have sublease revenue sharing.
5. Don't believe everything you read on the web. The average for cell site leases is NOT $1500/mo.
6. Do have your attorney review your tower lease.
7. Don't trust a verbal promise by the wirelss carriers or the tower companies.
8. Do be prompt in negotiating and responding to inquiries for a cell tower lease.
9. Do consider that the tower may alienate neighbors and nearby residents before agreeing to a lease.
10. Do your own homework on whether towers are safe or not.

Impact of CPI Based Escalation

2009-05-03T15:14:00.005-04:00

One of the recent questions we have been getting quite frequently is whether it makes sense to modify an existing lease to a Consumer Price Index (CPI) based escalation rate. This is because a few of the tower companies, including Crown Castle are actively looking to change their existing leases to a CPI based escalation due to changes in how they are required to report expenses over time related to a lease.

To help make sense of this issue, it is important to start with what CPI has done over the last 10 years. Please see the chart below. This is based upon the Urban Wage Earners and Clerical Workers (yes- there are multiple versions of CPI that can impact your actual escalation from year to year positively or negatively).

You will see that over the last 10 or so years, CPI escalation has ranged from a high of 4.08% to a low of 0.09% with an average of 2.38%. It is not difficult to see then that if you have a fixed based escalation in your lease that is greater than 2.38%, it might be detrimental to agree to a CPI based escalation. Clearly, CPI fluctuates and could go higher or lower. But based upon the last 12 years, many landowners will not be better off going to a CPI based esclation rate as compared to a fixed escalation rate.

To further complicate matters, the tower companies are placing ceilings on the escalation rates so that even if CPI is greater than a certain percentage rate, that you will only receive that rate. This is ridiculous. If you are willing to risk your escalation on what happens with CPI- you should receive the reward as well if the CPI is higher than average.

In short, we see little reason why a landowner would agree to amend their lease to reflect a CPI based escalation unless they are confident that CPI will be higher over time than their current lease escalation. Even then, the landowner should understand what they are giving up in the amended lease before agreeing. This could include the right to share in revenue from the tower, the right to an increased base lease rate, and/or the right to landowner friendly terms.

If you are contacted to modify your lease, please don't hesitate to contact Steel in the Air, Inc. for more help.

School Cell Towers: Why RFP's Don't Work

2009-04-10T10:24:00.003-04:00

Steel in the Air, Inc. regularly assists schools with cell tower leases on school district property. We represent schools and universities who see the upside of income that doesn't require a budget meeting or tax increases to procure. With the downturn in property tax valuations and increasing budgetary restraints, more and more schools are evaluating school cell towers as a source of income.

Recently, we went and spoke to a particular school board in south Florida as a member of the public in response to their consideration of the possibility of leasing school district property to cellular providers. Our particular objection to their proposed plan was that they intended to simply issue an Request for Proposals "RFP" in hopes that multiple parties would bid on the exclusive right to place towers on school district property. We objected to this option because we felt that it limits the value that the District procures from cell tower leases on school property. The District was looking to minimize the impact on its day to day operations by going with a single source vendor who would build, own, and operate the towers. They would evaluate District property and assist the District in marketing the property to wireless carriers. If they found interest, they would develop and pay for the cell tower on school land and manage it. In return, they split the revenue with the school district 50/50.

On the surface, this may seem like a good option. There are surely benefits to this type of plan.

The District and the tower company's goals are typically aligned in that the tower company needs tenants if it intends to be profitable.

The District gets to offload the negotiation of lease agreements to a third party vendor thereby decreasing staff time on the projects. (As anyone who regular negotiates leases on school district property knows- these are time consuming leases).

The District gets a sizable amount of income- especially in more urban areas or in areas where

However, there are some potential issues with this type of plan for school cell towers.

50% of the revenue can be substantially less than the District would have received had it just negotiated the lease directly with the wireless carrier.

In some cases, it is unlikely that more than one wireless carrier will use a particular location. As the tower company only gets 50% that may not be enough to justify building the tower. As such, the District forgoes whatever revenue it could have negotiated directly for the lease.

The District can give up some of its control over the placement of towers on its own property.

Some districts have experienced significant public opposition to cell towers on school property on the basis of the sometimes irrational concerns about radio frequency radiation.

Despite some common goals, the tower company and the District will inevitably have different goals because the tower company exists solely to make money off the operation of the towers.

The biggest issue we had with this particular District is that they assumed that an RFP would effectively bring in bidders. However, what they don't know is that the way they intend to craft the RFP will limit the number of bidders. The large tower companies don't do 50% revenue sharing. There are some tower companies that would be interested in building cell towers at schools, but they aren't likely to see the RFP. The wireless carriers won't bid because they would simply prefer to let a tower company deal with the burden and cost. The District is unlikely to know how to find small tower companies who aren't likely to read or follow school district RFPs. So the District constituents get the short end of the stick because the RFP ends up being bid on by one or two companies. To make matters worse, these bidders almost always know that RFP's for school sites will only be bid on by one or two companies and therefore aren't forced to bid competitively.

Our suggestion is that school districts retain outside experts to assist them in determining the most profitable way of leasing space for school cell towers. We can review the District's goals and help guide you on the method that will maximize your revenue while minimizing the headache to the district. It might be that one vendor is suitable or perhaps multiple vendors. Alternatively, perhaps the District could consider building and owning the towers themselves. Please contact us if you are school district looking to increase its revenue while minimizing the administrative burden from dealing with the wireless providers. We can provide non-biased advice on how best to accomplish BOTH of these goals. Please also see our webpage on municipalities building their own towers.

Stealth tower????

2009-02-13T06:15:00.000-05:00

Worst stealth tower I have seen. Looks nothing like a tree- well perhaps the Charlie Brown Christmas Tree. This particular company was cheap and it shows.

How Boost Unlimited will Help Sprint but Hurt the Wireless Industry

2009-01-18T07:49:00.007-05:00

While it may be hard to tell, Sprint PCS (S) is finally turning the corner. Dan Hesse, CEO of Sprint, is leading Sprint back from their apparent doom. Boost Unlimited is the latest in a series of efforts by Sprint to rectify their sinking stock prices. And from our viewpoint- it is a step in the right direction.

Let's start with the basics: $50/mo for unlimited Voice, Push to Talk, and Text. All prepaid- and INCLUDING TAXES. The obvious comparison is either to MetroPCS' or to Leap Wireless' unlimited plans. MetroPCS' comparable plan is $45/mo and Leaps is $40/mo- both of which do not include taxes- which add another 10%. But the biggest difference is that with Boost Unlimited, the user gets the benefit of a nationwide network as compared to either Leap or Metro's limited buildout in primarily urban areas.

METROPCS NATIONAL COVERAGE

courtesy of http://www.metropcs.com/

LEAP WIRELESS CITIES- courtesy of http://www.mycricket.com/

As you can see, if you travel a lot- especially to rural areas, you would have to pay roaming on either MetroPCS ($.49 to $.79/minute) or Leap Wireless' plan. (comes with either 30 or 200 minutes free- charges above that). On Boost Unlimited, whereever Nextel's iDEN network is- your phone works. Given Nextel's substantial coverage over the US, your phone will work in far more places and at a reasonable costs. And having experienced poor network quality on MetroPCS' underbuilt network here in Fort Myers first hand, I like other consumers would prefer better quality even if I am only paying $45/mo.

So who stands to lose from this plan? Phil Cusick, an analyst at Macquarie Research believes that Boost Mobile could add 1.9 million subscribers to the Sprint network in 2009, and another 1 million in 2010. Should the economy continue to falter, this may be conservative. Mr. Cusick identifies that MetroPCS and Leap could stand to lose the most especially in their legacy (older) markets. One of the pitfalls with pre-paid cellular service is that it has no contract and thus experiences higher churn.

Why does this work so well for Sprint? Besides the obvious need to reduce churn and actually have positive subscriber addition numbers, Sprint also needs to find a use for the iDEN network. As it previously promised to support the iDEN users through 2012 and tried but failed to sell the iDEN network, Sprint now gets to find some value out of its iDEN network. And given the number of subscribers that have left the Nextel network due in no small part to capacity issues on this antiquated network, there is plenty of capacity to be used by the new subscribers. Furthermore, because the users who would be interested in Boost Unlimited aren't looking for data services, there will be nominal capital expenditures necessary to maintain the quality of the iDEN network. Lastly, this will free up capacity on the Sprint's CDMA network.

What are the pitfalls? There are a few. Given the ARPU (average revenue per user) is lower than what Sprint currently receives ($56/mo for post paid without taxes), some Sprint users could switch to Boost Unlimited and use more network capacity for less than they currently pay. For instance, my wife's company currently has 5 lines through Sprint, 3 of which will definately be switched to Boost Unlimited. Mr. Cusick does not expect that there will be significant cannabalization. Secondly, while there won't be much in the way of capital expenditures required, there will undoubtedly be some required as Sprint/Nextel have built very few new sites since their merger in 2005. Coverage needs and demographics have certainly changed. Lastly, if MetroPCS and Leap counter with a reduction in rates, this could set off a rate war, which would undoubtedly cause AT&T and Verizon to retaliate as well. While this would be good for consumers, it would decrease carrier profits eventually leading to more mergers and less consumer choice. (Mr. Cusick believes that Metro/Leap will be more inclined to merge given the additional competition from Boost Unlimited).

All in all, we see Boost Unlimited as both a positive for subscribers and for Sprint (and its stockholders- which in full disclosure- I am one of them). The negative aspect for the entire industry is that Sprint's price wars hurt the collective ARPU for all vendors and this new offering will only increase the impact.

(A special cite to Phil Cusick at Macquarie Research- his research was key to much of the thinking here).

Cox Communications to Enter the Wireless Market

2008-10-27T08:19:00.004-04:00

In one of the first signs of good news that I have seen recently surrounding our market (other than self serving statements from public tower company executives at the PCIA conference), Cox Communications recently announced that it will build its own Cox Communications cellular network. Cox Communications spent $550 million to purchase spectrum in Atlanta, New Orleans, San Diego, Omaha, and Las Vegas along with a good part of Kansas and southern New Mexico.

Cox intends to build out those markets and connect to Cox fiber in those areas for backhaul. In other areas, Cox consumers will roam on the Sprint/Nextel network. (Cox must have decided that network quality wasn't important for roaming).

While the full impact of Cox's development plan is yet to be known, at a bare minimum, this should equate to at least 2000 new cell sites over the next few years. If recent deployments by MetroPCS and Leap are any indications, the majority of these sites will be on rooftops and existing towers. One interesting note- in an article in the USA Today- Cox alleges that they are looking towards LTE as their future 4G technology platform. However, with Sprint/Nextel using WiMAX, I have to wonder how Cox intends for its users to roam on the Sprint/Nextel network and still have their phones function for advanced services unless Cox intends to use Sprint/Nextel's network in the beginning entirely.

How will cell tower leases be impacted by the current market conditions?

2008-10-16T07:30:00.003-04:00

The last month has been a tumultuous time in the cell tower lease industry, primarily on the side of lease buyouts. With the plummet of the stock market, rising concerns about the availability of credit, and consumer confidence very low, the industry is starting to see the impact. Through our consultations, we have already started to see tangible evidence of a declining market especially in the lease buyout side.

From our vantage, there is a distinct shrinking of the lease buyout market. Of the numerous players who purchase long term easements under cell towers and rooftop sites in exchange for a lump sum, there has definitely been a slide in the purchase prices and an increase in the due diligence requirements for purchases. Companies that buy the leases are looking to pay less and to be more selective in their choice of leases - preferring to purchase only "investment grade" leases. (i.e. those that are from AT&T, T-Mobile, Verizon). While they still purchase non-investment grade leases, the multiples paid for all leases has definitely gone down.

One primary reason for this is that Wireless Capital Partners shut its doors about a month ago. With one major competitor out of the way, the remaining firms recognized the advantage they now have and have started to lower their prices and increase their due diligence requirements. Prices are lower than they were just two months ago. There are rumors that a new entity may be formed to fill WCP's shoes, but SITA has not seen any evidence of such yet.

Even the tower companies have started to pull back from previous offers. Crown Castle's agents have been representing to landowners that today (Oct 16, 2008) is the last day that they will be honoring most if not all of the lump sum buyouts they previously made. Unlike virtually every other time that lease buyout firms give "hard deadlines", SITA believes that this one is for real. Crown's stock price has plummeted from a 52 week high of $43 to their current price of $19. One specific reason for this is that Crown may have to pay back a $160MM credit facility. SITA does not believe that Crown or their landowners are in any jeaopardy- but this does put Crown in a situation where they need to retain their capital for more immediate needs than purchasing long term easements under their leases. Crown's representatives have stated that they will still continue to push the extensions of the leases but won't be making lease buyout offers until they can resolve their credit facility issues. This could take quite a while.

WHERE DOES THIS LEAVE ME AS A LANDOWNER?

Recognize that the value of your tower or rooftop lease is still the same. Nothing has changed that would reduce the value to the owner of the tower. What has changed is availability of capital to those companies that purchase tower and rooftop leases. Unfortunately for many landowners, the recent turmoil comes during a time when many landowners are going to need capital to keep their houses or run their businesses. So as the average landowner's need for the capital increases, the number of competing companies that want to buy the lease decreases and the rates that the remaining companies are willing to pay decreases as well. We are getting an increased number of inquiries from landowners who need to sell their tower lease(s).

Our advice: if you don't need to sell at this time- DON'T. We started in this industry in 1997, weathered the downturn in 2001-2002 and have seen the cycles. As with previous downturns, this too shall pass. The vacumn filled by WCP and by the reduction of offers from towers companies will either be filled again by the tower companies or opportunistic companies that see value in the lease buyout market.

If you do need to sell, recognize that you don't have the same negotiating position that you had just one month ago. However, don't believe that you have to accept the offer that you are given. Even now, we rarely see situations where the first offer is the best. At SITA, we can assist you in making sure that you get the best offer available. We know the players and we have assembled substantial comparable data to assist us in recognizing trends in pricing- both short term and long term. Please see our cell tower lease buyout page for more information.

If you don't know whether you should sell, please contact us. We can help you determine whether there is any probility that your lease might be terminated. We can also help guide you on what the pros/cons of selling now are and discuss what the future holds for this industry and lease buyout firms.

Cincinnati Bell Wireless and Lazy Site Acquisition

2008-10-01T07:39:00.002-04:00

A potential client received a letter from Cincinnati Bell Wireless stating that they have reviewed the client's property and were potentially interested in leasing a portion of the property for their cell tower site. The letter includes a template lease from Cincinnati Bell Wireless and a request for the landowner to review the lease with his/her attorney first to confirm which clauses that the landowner might find objectionable. While this is understandable, Cincinnati Bell also states in the letter that legal review is a prerequisite to negotiating terms like rent or escalation. Meaning that the landowner either has two choices. First, they can assume that the lease rate will be favorable, call their attorney to review the lease and pay $1500 or more in attorney's fees before ever actually knowing whether Cincinnati Bell intends to pay them $100/mo or $1000/mo. Second, the average landowner might decide not to review the lease in order to save the money and indicate to Cincinnati Bell that they are interested. In this case, they might give up the right to thoroughly review the contract.

We object to this specific type of site acquisition as predatory. Cincinnati Bell Wireless is forcing the landowner to either spend money on an attorney before even negotiating the lease terms or putting them in a situation where more ignorant landowners will simply choose not to get legal representation at all. To us this is lazy and predatory.

Why not simply state in the letter what Cincinnati Bell Wireless is prepared to offer? Then the landowner can make an informed decision of whether the money spent on an attorney will be well spent.

From a landowner perspective, what is to prevent the landowner from simply lying about whether they have objections to the agreement so that they can get to the discussion of the rent and other financial terms? I can't think of anything.

Wireless Capital Shutting Their Doors?

2008-09-26T10:57:00.002-04:00

One of WCP's agents told us yesterday that WCP is closing its doors and will not be funding any of the deals for which it has signed letters of intent. He mentioned that he was told this on a conference call where he was let go earlier this week. WCP blamed the issue on the financial markets.

Allegedly, WCP will release individuals who have signed letters of intent from their deal if the landowner calls WCP and requests to be released.

If you have entered into a deal with WCP and would like to check out other options, please contact us.

Irresponsible School Boards and Churches

2008-09-15T14:37:00.003-04:00

At Steel in the Air, Inc, we have assisted a number of municipalities with cell phone tower lease proposals at schools. We have also provided guidance to a number of schools, both public and private across the United States.

To our surprise, in some circumstances there has been little to no public opposition to the proposal to place a tower at a school or a church. The surprise comes from the fact that rarely are tower proposals at schools and churches unopposed by local residents. These residents rally to the cry that "towers will cause unknown health problems in our children" regardless of whether they have studied the issue or not. This post is not to suggest that these parents are rationally protective or hysterically uninformed, but to suggest that schools and churches should know in advance that parents will in all likelihood object to the proposed cell phone tower at the church or school. And that such opponents can become very vociferous and actionable.

In a recent newspaper article, "Cell tower plan on tap for Middletown zoners" in the Ashbury Park Press, a local School Board requested that it's attorney send a letter to Verizon AFTER they had already signed a lease to allow a cell tower on school board property. "This letter is written at the unanimous direction of the Board of Education, to advise you that due to overwhelming pressure and expressed concerns from the citizens of Middletown, the Board is hereby requesting the cancellation of parties' Agreement prior to the completion of Verizon's application process and the Commencement Date of the Agreement." There are numerous other situations that we are aware of where the same thing occurred. Some of Steel in the Air's own clients have contacted us after they signed a lease to inquire whether they can terminate it because of significant public opposition. We now tell all of our school/church clients that they need to assess whether they can accept opposition from neighbors before they sign.

My issue with the position of the school is not that they would object to the placement of a tower on school property. It is clearly their right and obligation to protect the children at the school. While I believe that towers are fundamentally safe with rare exception, I don't question the board's right to make a decision that the income may not be worth it.

However, I object specifically to the ignorance of this school board in not considering the issue prior to voting to accept the lease. They clearly like the dollar signs but failed to consider the possible adverse reaction. All they would have had to do is read the paper or search the Internet for hundreds of stories whereby there was opposition to a cell tower on the basis of health. And in failing to do so, the board was irresponsible.

Since the Telecommunications Act of 1996 and subsequent case law prevents local zoning officers and boards from denying a tower proposal on the basis of health- the residents turned their anger to the school district. The School Board caved to the pressure of the residents and chose to not honor their word/contract with Verizon. In essence, their negligence may cost Verizon a minimum of $30,000 in site acquisition costs, architectural and engineering services, environmental review, tower manufacturer fees, and the like. In the end, this all could have been avoided had the School Board acted responsibly rather than on public pressure. A contract is a contract. I assume that Verizon could bring an action for breach of lease and for damages- but suit against a school district may not be an publicly acceptable course of action.

In the future, perhaps other school boards or churches might actually consider the potential ramifications from approving a cell tower on school district property before they simply negotiate fiscal terms and sign a lease. It would save both the wireless carrier and the school board a significant amount of aggravation.

Apple iPhone- Impact on Cellular Networks

2008-09-15T13:50:00.002-04:00

A little over 1 month ago, I purchased the iPhone 3G. This post is an admission that until I did so, I really didn't understand how this particular device has and will continue to change the very industry I work in.

Simply put- the device is amazing and is truly unlike any other device I have used. I count myself among the technical adapters and have used many so called "smart" phones over the last few years. None of these devices no matter how advanced they were remotely changed my data ARPU- but I can assure you the iPhone has. I have an unlimited plan and use it constantly.

I access full page regular websites regularly. (It is so convenient to be able to access a website while out of the house to look up a fact or reference item)

I check my stock portfolio a few times a week. (More than I do on my computers).

I am addicted to Facebook's "twitter" like "what are you doing" application. (the utility comes from having friends on Facebook- not the other way around)

I use Google Maps much more often when I travel because it is faster and easier to access.

I check feeds to a number of blogs- which I now do more often because I can check them while I have even a few minutes of downtime.

The only thing that I don't do more often than I did before was check my email. Why - because of the crappy keyboard and Apple's stupid auto correction for typing. I like that it pushes email- but hate responding to email on the device. (Apple- why not allow bluetooth keyboards?)

The long and short of it is- that until you have actually used the iPhone daily- you more than likely don't understand how device makers (not the carriers) will change our industry and increase ARPU. The iPhone is that groundbreaking. And until Verizon, Sprint, and T-Mobile get equally accessible and functional devices, they won't see the same uptick as AT&T does in data usage and return.

Wireless Capital Partners - Potential Woes

2008-09-05T09:13:00.006-04:00

In recent months, we have received numerous inquiries from cell site lease holders who have entered into letters of intent with Wireless Capital Partners to sell their leases. These owners have contacted us because they have had difficulty getting Wireless Capital Partners to close on the purchases in a timely manner. To be fair to WCP, in some cases, the landowners were given a non-refundable fee to "hold" the closing for up to 3 more months. However in other cases, these owners could not reach their agent at Wireless Capital Partners. These owners wanted to see whether there was anyone else that would close quicker.

On September 4, we were informed by a Wireless Capital Partners agent that the vast majority of the agents were let go. They were informed on conference calls that they would no longer be needed. Allegedly, there are some upper managers still left. Other associates in the industry have confirmed that they have received a number of calls from prior WCP agents looking for new employment last evening. This is after Wireless Capital Partner released a large percentage of their sales force just a few months ago. At that point the suggestion was that the minority of their sales force was getting the majority of their deals done- so they let go the majority that weren't getting deals done.

This doesn't bode well for Wireless Capital Partners. They confirmed previously that they were having some funding issues to us, but that those issues would soon be resolved. In the last few months, they haven't been. They still might be resolved, but prudent landowners should consider how long they can wait for closing on selling their lease. We suggest that landowners who are in negotiations with a Wireless Capital Partners representative for purchase of a lease discuss how and when your deal will be funded. Perhaps ask that the funds be placed in escrow. If you already have a deal that hasn't been funded, please contact us regarding getting other offers from companies that have not had funding issues. Make sure to read your letter of intent with WCP, you may have legal restrictions from getting other offers during the term of the letter of intent. If so, you might contact WCP and ask them to either honor their agreement with you or release you from it.

Wireless Capital Partners tells Landowners of Sprint/Nextel Credit Problems.

2008-05-02T18:40:00.006-04:00

So today, two seperate clients who are considering cell site lease buyouts from Wireless Capital Partners received emails from their WCP reps that has a cryptic message regarding Sprint/Nextel's credit rating being downgraded to junk bond status.

The messages include an attachment of a news story about the downgrade. One goes on to say that there have been some amazing changes for WCP since they approached my clients first and that pricing leases is a "moving target". The other doesn't suggest or tell why the story was sent. Neither really states why they were sent at this time.

I surmise that WCP is using the article to scare landowners into selling with the implication that if it happens to the mighty Sprint/Nextel it can happen to the other carriers. Secondly, I assume that WCP will either reprice their cell tower lease purchase offers for Sprint/Nextel leases or discontinue offers altogether. (EDITOR'S NOTE- 6-1-08- Since writing this post, it has come to our attention that WCP has simply stopped purchasing Sprint/Nextel leases. Contrary to what was written above- WCP's financing group simply felt that there was too much risk in owning more Sprint/Nextel leases in the WCP portfolio. WCP's business model is based around spreading risk on their leases and the Sprint/Nextel leases increased that risk too much. WCP is working on acquiring alternative financing for Sprint Nextel leases.)

If you are a landowner that has an offer from WCP for a Sprint Nextel lease- don't dispair. Contact Steel in the Air- because their are other companies that are still buying Sprint/Nextel leases. If you are concerned about your Sprint/Nextel lease as a result of this- remember that Sprint and Nextel has no value without its cell sites. So while there may be a risk of termination due to the merger and duplication of Sprint/Nextel cell sites- these sites still form the basis by which Sprint/Nextel service their subscribers. Without them, Sprint/Nextel will really be in trouble.

Steel in the Air, Inc. and the author are not affiliated with Wireless Capital Partners or Sprint/Nextel. If you reached this post while looking for Wireless Capital Partners- go to www. wireless capital. com (without spaces) or http://www.sprint.com/.

"Elf Tower Video"

2008-04-28T10:20:00.003-04:00

A video about cell towers- or as the maker of the video calls them "elf towers". This video speaks for itself.

http://www.youtube.com/watch?v=PNBKk-remxU&feature=related

Black Dot's New Pitch to AT&T Cell Site Owners

2008-04-04T14:30:00.004-04:00

According to a client of mine, Black Dot Wireless has a new pitch that they are trying on landowners with AT&T cell site leases. Most of these pitches, I don't bother to post. Today's pitch was so patently ludicrous that I felt it necessary to call them out on such a ridiculous statement. (even worse than the balloons will take the place of cell tower pitch) Black Dot is now claiming that due to AT&T's acquisition of a spectrum in the 700MHz auction, that AT&T will no longer need 9 out of 10 towers because AT&T's towers will now have an effective radius of 50 MILES. These unneeded towers will be terminated within 2 years. Of course, the only way that the landowner could protect his lease was to reduce it WITHIN 5 DAYS.

There is truth to the fact that 700MHz spectrum is more efficient than either the 850MHz spectrum or the 1900MHz spectrum that AT&T currently uses. But to suggest that AT&T will terminate 9 out of 10 towers within 2 years is reckless at best.

Hopefully, Black Dot's management and AT&T's management aren't privy to the fact that Black Dot's agent are making such completely unfounded and reckless statements. If they are, shame on them. And if you are a landowner reading this- you might consider contacting your state attorney general and asking whether Black Dot can legally make such misleading statements.

Please note that Steel in the Air, Inc. is not affiliated with Black Dot Wireless or AT&T. If you have found this post while searching for Black Dot- please go to www. blackdotwireless .com. If you are looking for AT&T- please visit http://www.att.com/

Sprint/Nextel & T-Mobile Merger in the Works?

2008-03-22T18:34:00.005-04:00

Analysts from Merrill Lynch suggested earlier this month that T-Mobile may be in a position to acquire Sprint Nextel. Here is our breakdown of reasons why we could see this happening and reasons why we can't:

REASONS WHY SUCH A MERGER COULD OCCUR

1. The declining dollar: T-Mobile is owned by Deutche Telekom. With the euro's increase in value relative to the dollar, the cost of acquiring Sprint/Nextel would be lessened.

2. 4th Generation Wireless: Sprint/Nextel's WiMAX spectrum and development. It is no secret that T-Mobile is fourth in the race to 3rd generation wireless. While Sprint, AT&T, and Verizon have already implemented next generation technology on a majority of their urban sites, T-Mobile is in the midst of their UMTS overlay project. With less spectrum than the other carriers, T-Mobile had to bid heavily in the Advanced Wireless Services Auction before they could start this deployment. With Sprint/Nextel- T-Mobile gets to jump to 4th generation wireless services without acquiring more spectrum.

3. Spectrum Auction Participation: T-Mobile did not win any spectrum in the recent 700mhz auction. Perhaps because they won a good deal of spectrum in the AWS auction- but it is conceivable that they gained additional comfort knowing that they would have access to the 2.5GHz spectrum used by Sprint/Nextel for WiMAX.

4. Sprint Stock Price: Sprint's stock valuation is pitiful. At $6/share, Sprint's market cap is $19.3 billion. However, Sprint/Nextel's assets are valued at over $60 billion. We believe Sprint's stock has taken a beating that may be worse than deserved. Perhaps T-Mobile understands this as well.

5. Number One: A Sprint/Nextel/T-Mobile merger would yield 83 million subscribers- making it the largest carrier in the US. AT&T has 70 million with Verizon at 64 million.

6. Sprint Inactivity: Based upon our anecdotal evidence from clients who approach Steel in the Air, Inc to assist them on new lease negotiations for rooftop cell sites or tower sites, Sprint is not doing any new site development as yet this year. This could be an indication that a merger is in the works and Sprint/Nextel doesn't want to expend capital on building new cell sites that will be duplicative to a T-Mobile site.

REASONS WHY SUCH A MERGER MIGHT NOT OCCUR

1. Foreign ownership: In 2000, when Deutche Telekom acquired Voicestream and re-badged it T-Mobile, there was regulatory and Congressional concern regarding a foreign company having ownership of a cellular network. This concern can only be greater if Deutche Telekom acquired Sprint/Nextel.

2. Antitrust: The FCC and DOJ might have anti-trust concerns regarding the merger of the 3rd and 4th largest carriers into the number one carrier. However, if the mergers of AT&T/Cingular and Sprint/Nextel and the FCC/DOJ's failure to force significant divestitures in either merger are an indication, this merger could fly through. Steel in the Air has polled a few other experts- who seem to mostly believe that a merger between Sprint/Nextel/T-Mobile would be approved.

3. Technology Soup: T-Mobile operates a GSM network, Sprint a CDMA network, and Nextel an iDEN network. It is believed by some of us that Sprint/Nextel's failure to smoothly integrate the two divergent networks is responsible for a large part of their current stock woes. The migration of all three networks would be a significantly difficult hurdle.

4. Sprint's Pride: Regardless of where there stock is- Sprint most likely believes like I do that their issues are temporary. The market has been particularly unkind to Sprint's missteps and failed to value Sprint/Nextel's considerable spectrum holdings and the prospect of WiMAX.

In the end, perhaps the merger of Sprint/Nextel and T-Mobile is just intriguing supposition. However, if this merger was to occur, it would have dramatic impact on the tower industry and on cell site landowners.

Are Crown Castle and WCP Working Together?

2008-03-17T21:59:00.005-04:00

In a tale of "strange bedfellows", we are starting to wonder whether Crown Castle and Wireless Capital Partners are working together. A letter that Crown Castle is sending out to its landowners warns of the pitfalls of dealing with various lease buyout companies. However, the letter has one noticeable buyout company not included in the list- Wireless Capital Partners. We assume that this is because Crown Castle and Wireless Capital Partners have come to an agreement whereby they have coordinated their efforts to negotiate lease buyouts.

We could see where this might make sense for Crown Castle. Because of the rigidity of their proposals for buying out their lease agreements, they typically must buy a perpetual easement. However, some landowners are rightfully scared of selling anything in perpetuity. That's where we assume Wireless Capital Partners come in- they offer their "non-recourse loan" for a shorter term purchase. The offer is less than Crown's offer, but the landowner doesn't have a perpetual easement on their property either to Crown.

So why should the landowner care? Because Crown Castle would not be working with Wireless Capital Partners unless they had something to gain from Wireless Capital. This gain might come at the disadvantage of the landowner. We surmise (but don't know) that Wireless Capital Partners has committed to Crown Castle that they won't increase the lease rates at the expiration of the purchased Crown Castle lease agreement. How does this negatively impact the landowner? Because as part of the WCP agreement, the landowner gives WCP the right to negotiate an extension to lease even if the extension is for a period greater than the amount of time granted in the non recourse loan. So WCP could bind the landowner to an extension of the lease that benefits WCP and Crown Castle, but is significantly undervalued as compared to what the landowner could get if he/she were aware of the value of his/her property to Crown at the expiration of the WCP non-recourse loan.

In our opinion, this "partnership" is not improper provided that WCP discloses any such relationship with Crown Castle to the landowner prior to any purchase of a lease agreement. If Wireless Capital doesn't disclose, than the landowner might end up selling to WCP without knowledge of what they are giving up.

If you have been approached by Wireless Capital Partners regarding purchasing a Crown Castle lease agreement, speak with your attorney to fully understand what rights you are giving up. Ask them what WCP's intentions are at the expiration of the current lease agreement. If you need help understanding the actual value of the lease buyout or what the lease should be worth after the purchased term, contact Steel in the Air.

If you have found this post while searching for Crown Castle's or Wireless Capital Partner's websites- please note that Steel in the Air is not affiliated with either entity. You can find more information about Crown Castle at http://www.crowncastle.com/ or for Wireless Capital Partners at www .wirelesscapital.com.

Sprint's Sublease of Sites- Part 2- Lightower

2008-03-14T07:56:00.004-04:00

Recently, a few of our clients have been contacted by agents of Lightower. Lightower was previously known as National Grid Wireless. These agents are requesting access to upgrade Sprint's "telecommunications capabilities from traditional "copper" based services, to those of 'fiber-optic' service."

In some Sprint/Nextel cell site and rooftop leases, this may be permitted, especially if the fiber is being accessed through the current utility/access easement already granted to Sprint/Nextel. Additionally, some Sprint/Nextel leases specifically require that the landowner grant additional easements if necessary to bring in telecommunication services.

However, Sprint/Nextel's blanket letter implies that all of Sprint's leases permit installation without additional compensation to the landowner. "As indicated in our Lease, License, or Site Agreement with you for access, please extend to Lightower (or their agents, bearing a copy of this letter) the same courtesies that you have previously shown to the Sprint/Nextel employees and/or technicians." The letters do not state whether a lease amendment is necessary and once you consent to the access and installation, you might be deemed to have waived any rights to compensation.

Lightower stands to make a decent amount of revenue by bringing fiber-optic service to the property, especially if there are multiple wireless users using the property. Whether Lightower's installation of fiber to the cell site constitutes an sublease of the property or not depends upon your existing lease agreement. You should contact your attorney to confirm whether they have the right to install fiber to the cell sites on the property or just Sprint's. If they don't have the right and you are discussing compensation and wish to know what to ask for, please contact Steel in the Air.

Sprint's Attempt to Sublease their Sites

2008-03-12T15:34:00.004-04:00

Sprint has been contacting landowners recently with existing Sprint sites and asking to modify the current antenna installation. They propose adding 2 parabolic antennas to the site. When asked, they suggest that the additional equipment is used in "support of" their 4th generation WiMAX technology. Yet a careful review of the proposed lease amendment shows that they want to modify the current lease agreements so that Sprint "OR ANY OF ITS AFFILIATED ENTITIES, SUBLESSEES, ASSIGNS OR CUSTOMERS" can use the Site for installing equipment, antennas and microwave dishes, air conditioned shelters, ect.

Basically, Sprint wants unsuspecting landlords to sign these agreements not realizing that they have now authorized Sprint to sublease to virtually anyone. (I am a Sprint customer- perhaps I can get a sublease on one of their sites).

Personally, I find this type of negotiation misleading. Why represent that Sprint wants to add equipment if in fact, they simply intend to sublease to a third party? The answer is relatively easy- otherwise landowners would ask for more money.

Before you agree to an amendment like this or a proposal to add more antennas to your cell site, make sure you consult an attorney who understands wireless leases to counsel you on what rights you are giving up. If you need help evaluating the value of a Sprint lease amendment for additional antennas, contact Steel in the Air.

WiMAX vs LTE

2008-03-03T07:00:00.002-05:00

Just read an interesting article on the Looming Battle for Broadband that discusses the state of WiMAX vs LTE.

BlackDot Wireless and AT&T Still Trying To Get Reductions

2008-02-09T07:23:00.000-05:00

Cell site lease groundowners who thought they had heard the last from AT&T and Blackdot after refusing to lower their ground lease rates are being contacted again by Blackdot Wireless with the same pitch- just a different angle. These landowners or building owners with AT&T cell sites weren't persuaded by the earlier pitch that AT&T and Cingular were merging and that there was possible duplication in the AT&T network that might lead to lease terminations.

Blackdot clearly believes in the old addage: If at first you don't succeed... because they have a new pitch to try to get some of the higher lease rate landowners to reduce their leases. Blackdot's people must have time on their hands, because the new attempt is a glossy document called a Site Appraisal Form that they have generated that attempts to show all of the other options available to AT&T in the nearby vicinity. There is a shiny map and a list of all possible alternative sites within 1 mile which also lists the lease rate that Blackdot "purports" that AT&T could get from either the tower owner or landowner.

Blackdot represents that AT&T has signed master lease agreements with Walmart and McDonalds to place towers on their properties at $1500/mo. They also represent that either Walmart or McDonalds will pay the relocation costs to move AT&T to their facility. The pitch is that if the landowner does not agree to the proposed reduction, that AT&T will move it's cell site to either a Walmart or a McDonalds because of the lower lease rate.

The Site Appraisal Form includes all types of official looking comparisons and graphs- like a Performance Index that shows the rent of the various options in graph form. There is a Current Lease Consensus- that looks like the threat level bar at the airport- which undoubtedly will show yellow or orange or red for every site they send it to. (Because that constitutes danger to the lease longevity)

The funny thing is that I doubt that the wireless carriers have ever even seen this form- and definately don't use graphs or threat bars to determine whether a landowner's lease is over market average. However, Blackdot does not show other lease rates that other landowners are receiving in the area- because that might show that in fact that the subject landowner's lease is not really that expensive.

Ironically, Blackdot is not even sure enough of its own information - there is a conspicuous statement at the bottom that states that Blackdot does not guarantee or warranty the accuracy of this information that they are using to try to convince the landowner that they need to reduce their rent. If they can't guarantee this information- how can they expect you to rely upon it to make a decision?

If you have been approached by Blackdot to renegotiate your lease, please contact us and we can help sort through the fact and the fiction behind the possibilities that AT&T would actually move to another location. We can evaluate what the costs would be for the relocation and whether it makes sense based upon the expected savings. Lastly, we can make suggestions on how to respond.

If you have found this post in error while looking for information on Blackdot and wish to visit their website- please insert www blackdotwireless.com into your browser. If you are looking for AT&T, please goto http://www.wireless.att.com/home/. If you are looking for McDonalds- http://mcdonalds.com/ or Walmart at http://www.walmart.com/. Please note that Steel in the Air, Inc. is not affiliated with Blackdot Wireless, AT&T, McDonalds or Walmart in any way. Blackdot Wireless, AT&T, McDonalds, and Walmart are registered trademarks of those companies.

WiMAX a precursor to Consumer Device Connectivity?

2007-12-15T09:06:00.000-05:00

The first WiMAX networks are planned to start in less than a week. According to Eric Lin of PhoneScoop.com, Sprint Nextel will “soft launch” its so called XOHM WiMax network in the next few days. Lin quotes Bin Shen, VP of Sprint Nextel’s Product Management and Partnership Development. Shen says “Chicago, Washington DC and Baltimore will all go live at soft launch.” Sprint Nextel thus keeps their promise to have a live network by 2007, even if the launch is non-commercial. On the negative side, wireless ISP Clearwire has announced they will not continue to partner with Sprint Nextel to develop WiMAX networks. In dropping their participation, Clearwire cited the complexities associated with the Letter of Intent they signed in July, 2007. Sprint Nextel seems unphased by Clearwire’s decision, saying they remain fully committed to deploying WiMAX networks and developing services for those systems. What might those devices and services be?

Broadband network cards and laptops with WiMAX chips seem obvious products. Dual mode CDMA/WiMAX handsets are also predictable. During the days of the Clearwire partnership, consumer electronic products such as digital cameras and portable gaming devices were to have Intel made WiMAX chips built in. TiVo like hard drive equipment capable of storing full length movies seemed also possible, along with real time video conferencing hardware. But what about special purpose devices? One such product is Amazon’s book reader called Kindle. It accesses the net to download electronic book editions. Air time is bundled into the price of the e-book, so a customer is not directly billed for access. A digital photo service could act in the same way. Photos might go directly from a camera to a hosting or processing service that would recover its airtime costs by building them into the goods it sells. One could also provide Internet access by charging for each session. Aside from the Kindle, this new business model, the first test of open networks, has not been tried by other companies. The notable exception is OnStar, provided by General Motors.

OnStar is a communications, monitoring and tracking service. Among other things, OnStar can provide voice communications, air bag deployment notification, help in an emergency, vehicle diagnostic assessment, stolen car location assistance, and remote door unlock. GM bundles OnStar’s cost into the price of a vehicle, or it charges a monthly fee. The customer pays GM, therefore, for a service, and General Motors in turn pays airtime costs to a wireless carrier. As noted before, this business model has not caught on, save for telematic services to utilities providing gas pipeline and electrical systems monitoring. In those cases, a monthly fee is charged each company for information provided over cellular radio networks.

It will be interesting to see if Sprint Nextel will have the financial ability to build out their WiMAX networks. Toptechnews.com says WiMAX accounted for about $31 million in expenses and $73 million in investments during the third quarter. This for a company that in the most recent quarter lost $500 million in revenue over the last year. 337,000 subscribers were lost in the last quarter alone. WiMAX technology may be visionary, but will any carrier have the funding to make it work?