NEW YORK-The rapid growth in volume and kinds of wireless telecommunications services has created a strong ripple effect on the tower site administration sector of the industry.
Independent companies that develop tower sites need to be extremely patient waiting for their capital investment to pay off since long periods of carrier rental fee accumulation are necessary to repay a site owner/operator’s investment, said Carolyn Morgan, general manager, Mountain Relay Co., Alpine, Calif.
At the same time, Will Rogers’ admonition to “buy land because they aren’t making any more of it,” resonates in the tower site sector. Communities’ resistance to the proliferation of additional tower sites makes existing locations that much more valuable, given the expanding nature of wireless telecommunications.
“It’s strictly a volume thing,” said Bill Esrich, technical manager, Micronet Site Management, Jamison, Penn. “So many more wireless carriers are looking for towers now, and the number of towers hasn’t increased proportionately, so it’s a better market for us because of supply and demand.”
Carriers that used to own and operate their own sites strictly for their own use are being carried along by these trends, increasingly turning to outside tower site management firms, said Sheldon Moss, manager of the Site Owners and Managers Association in Washington, D.C.
“We have an application pending in one upscale Texas community where 70 individual towers would have been required for all the services,” said Phil McCabe, vice president of American Tower Co., Webster, Texas. “But we can go in there and build five to eight towers, put everyone on and make everyone happy, including ourselves.”
Among site owners/managers, there always has been a small group of players that have specialized in managing sites with several tenants, according to Moss. “The newer role for site managers is as facilitators and brokers for multi-use sites. Just in the past three-to-four years, there has been tremendous growth in the number of companies providing these types of services,” he said.
Colocation, as the multiple use is called, also imposes new demands on site managers for greater expertise in the different technical demands of various wireless services using a single site, he said.
Another trend resulting from the proliferation of wireless telecommunications is industry consolidation, although small, independent companies still own the lion’s share of the estimated 70,000 tower sites that exist in the nation today.
American Tower Co. is one example of a new breed of tower site management company. Since 1994 when it was purchased by several institutional investors, the company has embarked on an ambitious expansion plan involving building new sites and acquiring existing sites. In 1994, it owned 150 towers, mostly in the Southwest and the Southeast. It now owns 400 communications towers in 24 states, and plans to double that number by year end through acquisition or construction, said McCabe.
Even the smaller companies-like the specialized mobile radio companies that set up sites originally for local use-are finding that their sites have value as links in national and even international wireless telecommunications networks, according to Moss. “It is very recent to find companies whose primary revenues now come from renting space on their tower sites.”
Another trend is that site managers increasingly are “being asked for different types of properties, like buildings, instead of just tower sites,” said Peter Kovaleski, vice president, American Tower Systems L.P., Stafford, Conn. “We’re a lot busier now, and we’ve added more people,” in response to increasing demand, he said.
For companies like Mountain Relay, which owns and operates sites exclusively in southern California, the issues are a bit different. At the same time as increasing demands for wireless services are pressing the accelerator for expansion, increasing government regulations and increasing fees for use of government lands are hitting the brakes.
“If everyone in the communications industry would shut down [in protest] for eight hours, the shock wave would hit Washington like a tidal wave,” said Mountain Relay’s Morgan.
