“The only thing uglier than an ugly cell tower, is an ugly cell tower lease agreement.”
If you’re wondering if cell phone towers are going away, or if cell towers are here to stay, the answer is NO. Cell towers are not going away any time soon. And YES, cell towers are here to stay, for the most part. This is especially true for cell towers in rural and suburban areas. They have long-term longevity. But please read on. What about the future of other types of cell sites? Are cell sites going away? What other kinds of cell sites are there besides cell towers? Glad you asked, because most people don’t use the proper wireless industry terminology when talking about cell towers. People tend to call all cell sites, “cell towers” which is technically an incorrect use of the industry term.
- First, let’s define what a cell site is.
- Second, let’s define what a cell tower is.
- Third, let’s clarify what a cell tower is not.
A cell tower is a structure made of steel or wood (like a wooden pole used by a utility or landline phone company for example) and is usually a monopole, which is a single pole, a lattice tower which has three legs, or a guyed tower which is usually a lattice tower with 3 supporting cable wires anchored to the ground (see pictures for examples of each). In the USA, people call them cell towers, cell phone towers, cell sites, cellular sites, cellular towers, cellular phone towers, rooftop cell towers, and sometimes call them mobile communications towers, mobile base stations, masts, antenna masts, base stations, or mobile towers. Communications towers and radio towers are typically referred to as a term for other forms of communications networks, not for mobile telecommunications.
Every Cell Tower is a Cell Site, But Not Every Cell Site is a Cell Tower.
Okay. now repeat after Tower Genius…
- All cell phone towers are cell sites. But not all cell sites are cell phone towers.
What is a cell site? A cell site is any structure that is used to mount 3G, 4G, or 5G cellular antennas for a carrier’s wireless network. The wireless industry term used primarily when discussing antenna locations is the term “cell site”. A cell site can be a tower, a rooftop, a farm silo, a smokestack, an overhead highway sign, a light pole, a steel electrical transmission tower, a wooden telephone pole, a water tank, or other overhead structure.
Are We Going To Need Cell Towers in the Future?
Are cell towers going away in the future? The answer is still a very big NO with a few exceptions. Cell towers located in densely populated urban areas where there is no rooftop available to mount antennas are at a much higher risk of becoming less valuable to their networks than rural towers. Would a mid-sized cell tower company like Harmoni spend one billion dollars to acquire 1,000 cell phone towers for $1,000,000 per cell tower if they thought cell towers were going away? Doubtful.
However here at Tower Genius, we believe that in densely populated urban markets such as the boroughs of New York City, Chicago, Los Angeles, Philadelphia, Washington DC, Miami, Baltimore, Dallas, Houston, and Atlanta, where carrier network deployments primarily utilize rooftops, big changes are coming in the next decade when significant 5G densification occurs.
Put yourself in the cellular carrier’s shoes. If you are Verizon Wireless, AT&T, or T-Mobile and you have thousands of mature rooftop cell sites nationwide that have been increasing in rent by 3% or 4% every year for the past 25 years, many of them are going to be paying close to $5,000 per year or more. They want to reduce costs. That’s why cell site landlords get annoying and threatening rent reduction letters from vendors representing wireless carriers.
The rooftop cell site landlords receiving premium rent payments ($4K and up) are the ones who need to be especially concerned with the future viability of the cell site on their buildings, and protecting their cell site income, while the cell tower landlords receiving ground lease income are generally safe from these rent reduction threats. Yet when the rent reduction companies call and send letters, they group everyone, even the rural cell tower landlords that receive less than $1,000 monthly. Perhaps this is where a lot of the confusion stems from.
Will We Need Rooftop Cell Sites in the Future?
This probably won’t be a popular opinion among rooftop cell site landlords, but we have been quite consistent about what to expect in the future if you have a rooftop cell site.
A rooftop cell site leased in the year 2000, which started paying $2,500 monthly (a very common rate in a big city) and has escalated by 3% annually, will be paying over $5,000 in the 25th year of the lease term. By year 35, it will be paying over $7,000 monthly. What’s stopping a wireless carrier like Verizon or AT&T from installing 10 or 15 5G small cells close to the “expensive cell site”? In the USA, thanks to wireless industry lobbyists, a carrier has the right to lease a 5G cell site on a public right of way for only $270/year. If the conditions are present, they could hypothetically install 15 small cells and reduce their rental expense for about half the cost of leasing 1 macro cell site.
Our professional opinion is, if you think your rooftop cell site and future cell site rental income is safe and is not going away, then keep collecting as much rent as you can, and enjoy the rooftop cell site rental income for as long as market conditions will allow. We believe there is at least an 80% chance if you are a rooftop cell site landlord in one of the large cities mentioned above, your cell site will become obsolete in the next 15 years. But if you are losing sleep over the future viability of your big-city ROOFTOP cell site, then sell it and let somebody else worry about it.
Why would a cell site lease buyout company purchase a cash-flowing asset that is possibly going away? Frankly, many of these people aren’t that smart, and they enjoy the casino called Wall Street.
So again to summarize, we think that most cell towers are not going away, but many or the majority of rooftop cell sites in the big NFL type cities have a high probability of becoming obsolete in the future over the next decade, into the 2030s as the 5G networks reach maturity and become more dense, and 6G is rolled out.
Can We Help Answer Your Cell Tower or Cell Site Questions?
- Do you have questions about your selling your rooftop cell site lease?
- Do you need help negotiating an amendment with a tower company for a cell tower lease renewal?
- Have you received a nasty letter from a third party representing a carrier about wanting to modify your lease agreement and reduce your rent to make your location more valuable to their network?
- Or has good fortune smiled upon you and you have questions about a brand new cell tower proposa which you have received to have a tower built on your property?
We would love to speak with you.