The Sprint/T-Mobile, Tower Company Quandary

By Brett Reall

I just received an all too familiar call from a tower company regarding one of our customer’s cell tower sites. This was a ‘friendly’ notification that Sprint and T-Mobile had merged, and that Sprint would likely be removing their equipment within the year; implying that our customer would be losing the rent on the site.

Many property owners are receiving similar calls from a variety of entities, all with similar implications – act now or you will lose out on rent, buyouts, security, etc. What is difficult for property owners to ascertain is the likelihood of their cell site actually being decommissioned, due to both a lack of information available, the presenting entity, and general industry uncertainty.

We frequently see calls and letters sent out in merger situations from several different entities, including the following:

1. Lease Buyout Companies

Companies that buy cellular leases use mergers as opportunities to spotlight what they present as the volatile nature of cellular leases. When a merger happens, they present property owners with case studies of cell sites decommissioning, hoping that property owners will feel that their cell site is vulnerable and exchange the lease for a one-time payment.

2. Tower Companies

Owners of cell towers who lease to wireless tenants use mergers as opportunities to contact property owners for a variety of reasons. Specifically related to the Sprint/T-Mobile merger we have seen requests for rent reductions, term extensions, more restrictive lease terms, expanded compounds, etc.

3. Wireless Carriers or their agents

We have seen calls from wireless carriers and some of the industry’s other standard players asking for rent reductions. The logic behind the request is that the wireless carriers are reviewing sites, and making decisions to terminate based solely on the property owner’s willingness to reduce the rent.

In our experience, unless a property owner is requiring rent that is extremely high, a rent reduction alone is usually not enough to prevent a site from being decommissioned.

There are many factors that go into which cell sites are decommissioned and which ones remain in service following a merger. Every cell site is different and has different factors that affect it. Before making a decision that may cost you hundreds of thousands of dollars, contact Gunnerson Consulting to review the specifics of your cell site. We understand that cell sites are not your primary business – they are ours!