Sprint and Nextel Cell Tower Lease
Now that Sprint and Nextel have received approval from the
FCC, DOJ and their shareholders to merge, they are in the
process of determining where they have redundancy in their
operations. One of the main areas where they are looking
to reduce expenditures is the land costs of cell towers.
For some wireless carriers, the cost of land is one of their
largest operating expenses. Sprint is currently evaluating
all of its cell sites, looking for redundancy. Recent estimates
are showing that approximately 5,000 duplicative sites will
To that end, many landowners have started to receive letters
from one of a few organizations that is working for Nextel
and Sprint to evaluate and terminate those cell towers and
cell tower ground leases that are no longer needed. The
letters basically offer a short guarantee on the lease in
exchange for the owner reducing the ground rent by 30-75%
and agreeing to no increase in the lease over time. Many
times, there is an offer by Sprint to "buy" 15
years of the lease for around 5 years worth of rent.
The "offer" if you can call it that, comes with
the veiled threat that if the landowner does not comply,
the lease will be terminated and the landowner will lose
all revenue from his Nextel cell tower lease or his Sprint
cell tower lease. There is a veiled threat that if the landowner
does not comply, the lease will be "too expensive"
to maintain and as such may be terminated.
In some cases, Nextel and Sprint are intent on terminating
the lease and only a reduced rate and extended term can
save the lease. This occurs when there actually is overlap
and one of the sites is redundant. In other cases, Sprint
is bluffing and trying to scare the landowner into reducing
the rent on a site that was never slated to be terminated.
Unfortunately, Sprint has chosen to use third party companies
to do the renegotiations and it is difficult to get anything
out of the agent's for that company. The agent's are working
in a call center, reading off a script and know less than
the landowner about the cell tower business. They work off
of high pressure sales techniques that they have refined
against hundreds of Cingular and AT&T tower owners.
But you can even the playing field. Ask the agent what
site they would be consolidating this equipment too. Chances
are they won't or can't tell you. One landowner suggested
that he was told by Sprint's agents to get in his car
and drive around. Ask them why your site was chosen and
how many other sites were chosen in your area. Chances are
again that they won't or can't tell you. Ask questions-
and keep bugging them until they answer you.
Finally, if you find that you cannot determine if they
are bluffing or not, consider retaining the services of
a consulting service like Steel
in the Air. In most cases they can review your
location, determine if there are any redundant sites, and
if there are redundant sites, help you determine if negotiations
would even help.
their page on the subject for more
Both Sprint and Nextel are copyrighted
names. Cell Tower Info.com and Steel in the Air have no
relationship to either of these companies.