An Urban Legend Debunked

Contrary to what this issue of PlanWireless is telling its readers, there is a story making the rounds on the Internet that says:

·            New cellular leases are paying lower lease rates.

·            Carriers are pulling out their cell sites and redeploying to cheaper properties.

·            It’s the new technologies (e.g., 700 MHz) that allow cell sites to go just about anywhere, so location is no longer a criterion for deployment.

These are ridiculous ideas, seemingly strung together to tell existing landlords not to rock the boat.  According to the story, cell sites are capable of jumping at a moment’s notice, so landlords better start offering lower rents to keep the carriers on their respective properties. 

The author of this urban legend is self-described as a “fan and observer of the wireless industry.”  By contrast, Kreines & Kreines, Inc. has worked in wireless for 14 years.  Here are some of the myths circulating on the Internet, which PlanWireless does not agree with.

·            Myth:  Cellular networks are reorganizing their cell sites and towers, as well as leases, due to new technology.

PlanWireless’ opinion:  “Cellular networks” don’t “do” anything, the carriers do.  Yes, the carriers are rearranging their cell sites, primarily by “infilling” new sites between older cell sites.  No, the carriers don’t reorganize towers because they tend not to build towers or own them.  “Towers” are not the mount of choice in urban and suburban areas.  Perhaps the author is confusing the tower industry with FCC-licensed carriers.

·            Myth:  During the late 1980s and early 1990s, carriers sought “perfect” locations for which carriers paid excessive rents.

PlanWireless’ opinion:  Carriers put cell sites wherever their radio frequency (RF) engineers said they could get a signal at the same time getting a cheap lease rate.  Lease rates are steadily increasing since 1980-1990 and Kreines & Kreines, Inc. has a national lease rate survey that proves this.

·            Myth:  Landlords are enticing carriers to pull existing cell sites out and redeploy them at nearby locations.  The lure is cheaper rents.

PlanWireless’ opinion:  In order to understand cell sites, one needs to understand network design.  Cell sites form an intricate puzzle where moving one piece (or cell site) of the puzzle affects several others.  Redeployment is not just walking down the street and hoisting new antennas.  There is drive testing, negotiations, site preparation and zoning approval, where the carrier spends hours convincing local government officials that the proposed site is the only site that works for the carrier’s network design.

Cell site deployment is a complicated business and new cell sites pay more rent, not less.  The new technologies involve WiMAX and other broadband technologies, which require line-of-sight or at least higher positions above ground.  In an urban setting, low cell sites will be blocked by “clutter,” thereby giving an advantage to the older, higher cell sites.  Quitting a high urban site often requires finding two or three lower sites nearby.

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Kreines & Kreines, Inc.
58 Paseo Mirasol, Tiburon, CA 94920
Phone: (415) 435-9214
Fax: (415) 435-1522
e-mail: mail@planwireless.com