Now that Cingular and AT&T have merged, 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. Cingular is currently evaluating all of its cell sites, looking for redundancy. The stated goal is to reduce their 50,000 cell sites by anywhere from 8,000 to 12,000.
To that end, many landowners have been receiving letters from one of a few organizations that is working for AT&T and Cingular 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 not to increase rent over time. Many times, there is an offer by Cingular 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 AT&T Wireless cell tower lease or his Cingular cell tower lease. There is a veiled threat that if the landowner does not comply, the lease will be “too expensive” to maintain and may be terminated.
In some cases, AT&T and Cingular are intent on terminating the lease; 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, Cingular is bluffing and trying to scare the landowner into reducing the rent on a site that was never slated to be terminated.
Unfortunately, Cingular has chosen to use third party companies to do the renegotiations, and it is difficult to get anything out of the agents for that company. The agents are working in a call center, reading off a script, and know less than the landowner about the cell tower business.
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 Cingular’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 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 can not determine if they are bluffing or not, consider retaining the services of a consulting service like Steel in the Air. In most cases, Steel in the Air can review your location and determine if there are any redundant sites. If there are redundant sites, they can help you determine if negotiations would even help.
Please see their page on their Subject for more information.
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