The cell tower lease industry is buzzing with talk about 5G and how it’s going to impact cell tower lease rates. It’s no surprise that landlords are worrying about their existing leases, as there are rumors that 5G will make cell towers obsolete. So what’s really going on with 5G a cell tower lease rates? Is the 5G rollout a sign that the end of cell tower leases is near? Is it time to opt for a cell tower lease buyout before the entire lease buyout industry collapses?
Continue reading to get answers to all these questions along with additional information!
The good news is that 5G will NOT make cell towers obsolete! Cell towers are here to stay. BUT… (and that’s a VERY BIG BUT…) we need to define what a cell tower is and what a cell site is, because we believe that while most CELL TOWERS are not going anywhere, we believe BIG changes are coming for 5G URBAN rooftop CELL SITES!! Buckle up!!!
What is a CELL SITE? Basically every cell phone tower is a cell site. But not every cell site is a cell tower. A cell site is where wireless telecommunication equipment and antennas are located that help to propagate signals, and broadcast and receive voice and data transmissions. A cell site can be located on a rooftop, on a water tank or tower, on a smokestack, on a billboard, on an electric transmission tower, inside a church steeple, or other tall vertical structure. A CELL TOWER or CELL PHONE TOWER (Cellular tower or mobile base station, tower mast) is it’s own still structure and can be a single pole or monopole (or a stealth pine tree or palm tree, flagpole), a lattice tower that stands on three legs, or a guyed wire call tower, which can be either a lattice or monopole cell tower that is supported by three guyed wire cables that are anchored to a concrete foundation much like a tent.
Most cell towers are here to stay in suburban and rural areas and have long-term viability.
Is It Time To Upgrade Old Cell Towers?
Like any other new generation of wireless technology, 5G requires plenty of equipment to be upgraded, and existing equipment will have to be modified and swapped out. If you are a cell tower landlord with Verizon, AT&T or T-Mobile or if you have a cell tower lease with American Tower, SBA Communications or Crown Castle and you see tower technicians working over a period of a few weeks on the cell tower, it’s safe to assume 5G upgrades are being performed.
How Many More Cell Towers Will Be Required For 5G?
Currently, there are over to 400,000 cell sites across the US. With the rollout of 5G, you can expect a significant increase in the number of 5G nodes and small cell sites. Thousands of 5G small cells or nodes will need to be installed annually to keep up with demand for coverage and capacity.
That’s because 5G requires the “densification” of the cellular network. 5G is faster and stronger than 4G, but there are limitations. For example, an unobstructed 5G signal can span over 1,500 feet, but when many things obstructing the signal, it can only reach 300 feet in a densely populated area.
To ensure seamless 5G connectivity, cellular companies will have to set up a 5G nodes every few hundred feet or so in urban areas especially in public Right of Ways where they can access buried fiberoptic cables. But while the number of cell sites is set to increase, the size of cellular towers will get smaller as 5G technology uses MIMO (Multiple-Input, Multiple-Output) and beam forming antenna rays (which makes using the available spectrum more efficient). These sites are also much cheaper to install and operate, with 5G nodes leasing in public right of ways for only $270 annually.
To sum it up, the 5G rollout will require more cell sites, and contrary to popular belief, cell towers will not become obsolete, however cell site leases in urban areas will be impacted due to densification and economic factors. Instead, they will get smaller and might just bring less income to landlords in some cases. Still, the need for new towers will bring plenty of rental opportunities to existing and new landlords.
What’s Next For Current & Future Cell Tower Site Landlords?
If you’re a landlord with an existing lease, don’t give into the fear that cell towers will become obsolete due to 5G. Your cell tower rent is probably safe for the next decade or longer. We have distinguished earlier in this blog between what is a CELL TOWER and what is a CELL SITE. Cell towers, you know, are the towers that are located on the ground, they are mostly safe from becoming obsolete from 5G or 6G or whatever. However a rooftop cell site or rooftop urban 5G site in a densely populated city like NYC, Dallas, Miami, Los Angeles, Chicago could BE AT RISK OF BECOMING OBSOLETE in the not too distant future because 5G cell sites can be leased in public right of ways by AT&T, Verizon etc for only $270 per year. The economic logic here is that they can hypothetically lease ten 5G sites near the street level, and potentially replace an expensive rooftop macrocell site. So be aware in the urban areas. If yo were AT&T or Verizon Wireless, and you were paying $50,000 or $60,000 or $70,000 per year to lease one rooftop cell site in Atlanta, or Boston, or San Francisco, and you would replace that expensive site with ten smaller 5G sites for a total of $2,700 per year for all ten, what would you do? This is why Tower Genius says that you might want to think about doing a cell site lease buyout.
With Tower Genius on your side, you can maximize the value of your cell tower lease. This is why you should contact Tower Genius at 888-313-9750. We’ll provide end-to-end support to make sure you land a great cell tower lease deal. And we can’t stress this point enough: We work only for property owners like you and NOT for the cell tower companies. We’ll provide you with unbiased advice. Connect with our team when you need an existing cell tower lease renewed or you’re considering a cell tower lease buyout offer.