Developing a cell tower

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Many individuals inquire as to how they can build a cell tower on their property and lease space to the wireless carriers. Their curiosity is piqued when they find out that a tower can be built relatively cheaply. Some monopole type tower installations can be constructed for less than $70,000 which includes the tower steel and concrete. Given that wireless carriers often pay over $1,500 per month to lease space on a cell tower, the building of a tower can often be a solid business proposition.

However, just because it can be done does not mean that it should be done. There are numerous factors that determine whether or not a tower will be successful. Many companies during the tower boom of 1997-1999 were building towers whenever and wherever they could, and some of those towers still do not have tenants on them.

Very few tower companies actually build towers on speculation that a wireless carrier will actually use the tower in the future. Often times, these companies require a signed lease agreement from a wireless carrier before construction will begin.

A landowner who has been approached by a wireless carrier to lease land for a cell tower may be in a position to build the tower themselves and lease space to the wireless carrier on the tower. More often than not, the landowner will just end up scaring the wireless carrier away, and the cell tower will be built elsewhere.

Additionally, most cell tower co-location leases (where a tower company leases space on the tower to a wireless carrier) have termination clauses that allow the wireless carrier to terminate relatively easily and with little notice. Thus, building a single tower might be a risky investment without expert consultation. The large companies levy the risk that one tower might be a bad one over the hundreds or thousands that they have built or acquired.

This is not to say that independent investors or builders should not build a tower but that the decision should be made wisely. Competitive analysis of existing structures in the area should be completed. The zoning ordinances should be reviewed to determine how easy it is for a competing tower to be built. Proper site due diligence should occur to make sure that the owner does not expose him/herself to additional liability. Lastly, always have the lease agreements reviewed by an attorney and an industry consultant.

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