What you need to know about telco tower leases

Telco tower leasing happens every day. Oftentimes, mobile operators or carriers rent spaces on rooftops or land to install mobile phone antennas or telecom towers so that they can provide more signal and better coverage to the population. Read more to know about the process, applied regulation and the permissions required.

What is a telco tower lease?

Nowadays, the concept of a telecom tower lease is quite popular. More and more people need to make calls and connect to the internet without interruption. That is why more telco-sites are needed to enable this real-time connection.

Operators need the right space — whether it be rural or urban — to install these antennas.

Operators usually build antennas or towers on third-party properties, signing lease contracts with the landowners. The owners, in turn, receive a periodic rental payment in exchange for the installation of the tower or antenna on their parcel of land or on the roof of their building. This is a common practice.

This arrangement can be beneficial for both parties for a period of time, as the operator can then deploy or expand its network and provide coverage to more users, without having to purchase the land to install the antennas, while the land or building owners benefit because they, on the other hand, receive a periodic rent for as long as the contract is in place.

The importance of location

A key element for network deployment is the location of each telecom tower. Operators know where they need to install the telco-sites, which can be in rural or urban areas.

When mobile operators decide to deploy or upgrade their network, time is of the essence. They must start right away to be able to offer the best service possible.

Aside from the site conditions to install the telco-sites, different factors affect the future lease contract between the owner and the operator. These factors include interest rates, the number of operators that will be physically on the site, inflation, current bandwidth, the rent to be paid and various other considerations.

Telco-sites regulation

The installation of new telco-sites falls under the responsibility of each local authority. They define the criteria for the location of antennas as well as the characteristics that individuals must comply with for their installation, authorizations, land use permit, etc.

The local authorities must authorize the installation and ensure that is in compliance with the established requirements. This affects installations on both rural land and urban buildings.

How much do operators pay for installing an antenna or a telecom tower?

Before starting the process of leasing land to install an antenna or a telecom tower, the first question a landowner may ask is how much money operators will pay. The answer is that this will depend on the factors mentioned above and subsequent negotiations.

Once a landlord has entered into a lease with an operator, they then have an alternative to the non-guaranteed rent offered by the operators.

This alternative is also known as a telco tower lease buyout. It consists of offering the landowner an upfront guaranteed lumpsum in exchange for the right to manage the lease contract, and receive the rent associated with the contract for a determined period of time.

This alternative applies to parcels of land as well as to urban buildings, and apartments alike. Whenever there is a lease contract associated with the antenna or a telco-site, an agreement might be made to purchase the rent associated with the site.

The terms of the agreement are agreed upon with the necessary legal agents, so that both parties can be certain that everything complies with the established regulations. This ensures that the owner can exercise the right to sell their land or real estate in the future in a normal manner.

Although the risks associated with the lease of the antenna or telco-site persist, either because of a possible dismantling or a future decrease in rent, with a telco lease buyout, the owner no longer assumes those risks. APWireless accepts them thanks to its diversified portfolio of assets.

Do you have any questions about telco-site leases, how suitable your property may be for a telco-site or, if you are an existing telecom tower owner, do you want to learn more about the asset located on your property? Contact APWireless by calling 03 8637 7153, or visit www.apwireless.com.au , and one of our Acquisitions Directors will advise you on your telco-site or lease.