The Dirty Secret Verizon and AT&T Don't Want You To Know About Small Cell Leases.
By Steve Kazella
Small cells and Small Cell antennas also know as mini cells or microcells were rolled out by Verizon Wireless in the New York, New Jersey, North Carolina, California and Virginian Markets in Q3 of 2013. Tower Genius started getting calls almost immediately from landlords seeking advice and guidance about what to do now that Verizon Wireless wants to put a single antenna installation on their rooftop. Most questions were like,
"What is Verizon up to?"
"What is it worth?"
"How much do I charge them?"
"What about power and electricity?"
"They say they only need a very small amount of space."
"It's much smaller than Verizon's 12-antenna 4G/LTE Macro sites."
In a nutshell, here is the formula on how to run a very successful wireless network, and earn billions in profits annually:
"Just Say NO."
(First Lady and Wireless Industry Thought Leader, Nancy Reagan)
Verizon Wireless has been spearheading small cell network deployment among the carriers while AT&T and the others have sat back on the sidelines and watched, to see if Verizon would succeed or fail miserably. The RF engineers albeit well intentioned, thought it was a great idea. And hat tip to them -- it is. However the folks running Verizon forgot that they still have to overcome a major obstacle... the landlords.
Most Verizon Wireless landlords with macro antenna rooftop cell sites in major metropolitan areas are receiving at lease $1,800 t0 $2,000 per month and offers time much MUCH more than that. And building owners have friends who are landlords and they sometimes talk to each other. Long story short, Verizon was having a heck of a difficult time offering landlords $100-$500 per month for a single or duplexed small cell antenna lease. And in 2017 they still are having difficulty. We wish them well, hope they realize that they still need to pay a fair market price for the privilege of leasing rooftop space that is not based on the number of antennas or on square footage price as regular commercial real estate is -- or so they would want you to falsely believe. But we digress...
Carriers need to add more capacity smaller cellular sites to enhance their networks and can barely keep up with demand. The microcell antenna cell sites are smaller, yes, but at the end of the day they still need to put them somewhere. Companies like American Tower and Crown Castle are dumping tons of money into small and microcell technology. And the carrier real estate departments have been earnestly trying to convince landlords to accept $100 to $500 per month for a Small Cell lease - even in places like New York City, Los Angeles and other major metropolitan area.
Back in our college fraternity days, when sorority girls showed up to our parties, they would ask, "why are you charging me $5 to come inside your party, I'm wearing a french-maid costume, and besides, I'm not drinking your disgusting grain alcohol red solo cup punch from that old 1940's washing machine"... The standard answer was simple. "Honey, you're taking up space."
And Verizon can get away with charging low cell site lease rates on small antenna nodes and cells because they reward and incentivize their consultants and they know that if there are several available rooftops to choose from, there's got to be a sucker amongst them who will accept $500/month or less.
Even AT&T contractors are using the possibility of their your macrocell site being replaced by microcell technology as a way to place fear in your mind to take a rent reduction or a lease optimization rent guarantee. The only thing guaranteed is that you are getting the short end of the stick.
Micro cells are worth much more to carriers like Verizon and AT&T than they are leading you to believe. It's not about the numbers of antennas or square footage. it's about the privilege of utilizing your rooftop and being able to service their subscribers. For most landlords, micro cell rooftop leases will prove to be an annoyance, and inconvenience once you factor in the regular maintenance 24x7 access you have to give them and having to reconcile Verizon's or AT&T's electrical bills because they are too cheap to install a direct meter. And to add insult to injury, remember this... While they complain about the fair market value rent that you should really be getting here, it costs them less than $10/month to carry the cost of voice and data for your smartphone.
So... to be completely honest and transparent, we really do not like small cells. We abhor them. They are a pain in the rear end to negotiate. They are worth a lot less than a traditional 12-antenna macro-cell lease but involve the same amount of work on our part. If the carriers are successful in deploying tens of thousands of them as they have been talking about it will probably cause us to hang up our hats and buy the lunch truck we have been dreaming about. However where there is chaos, there also is opportunity. Make sure you talk to a Telecom Lease Genius about what we can do for you.
Talk to Tower Genius.
The bottom line is that carriers won't pay more than about $500 per month at best for a small cell lease. But these leases have DOZENS of items that still need to be adjusted. You need expert guidance. Contact Tower Genius at 888-313-9750 or if you have a question about a Small Cell proposal you may have received from Verizon Wireless, AT&T, Sprint or T-Mobile.
Find out from Tower Genius how we help landlords and property owners in the USA and Canada maximize cell site lease values and get the best possible terms for:
Cell tower lease agreements
Tower lease extensions
Cell site upgrades
Small cell proposals
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Rooftop lease buyout offers
Rooftop cell site audits
Lease Agreement defaults
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