As mobile phones become smarter and more critical to our daily lives, the demand on mobile phone masts to deliver phone calls and data has significantly increased in recent years. Added to this is the recent announcement of the Government policy to tackle mobile phone “not-spots” and also the roll out of the 4G and future 5G networks to handle increased data flow. At Carver Knowles we have seen a recent flurry of activity in mobile phone operators looking to acquire new mast sites in the area with clients turning to us for advice as to how to deal with the situation. In this blog we look briefly at what has been happening in the industry and where it is heading now. In addition we look at some of the issues that need to be considered when negotiating a new site.
The telecommunications industry has seen a number of changes in the past few years. Historically all the major mobile phone operators such as Vodafone, Orange, O2 and T-Mobile acquired and ran their own mast network. As you would expect with this individualistic policy, there were areas with a number of phone masts for each operator and it didn’t take long for the companies to work out that it might be cheaper to work together and run less sites but still maintain full coverage. As a result of this we now have 2 main operators in the mobile phone mast network. These are “EE” (Everything Everywhere) who were a collaboration of T-Mobile and EE (formerly Orange) and also “CTIL” (Cornerstone Telecommunications Infrastructure Ltd) who are a collaboration between Vodafone and Telefonica (O2).
In the recent past we have seen a consolidation of mast sites as the operator has looked at their network and either de-commissioned sites to avoid duplication or negotiated lower rents based on the threat of decommissioning. Whilst this continues to some extent, the need for a more sophisticated network to handle the increased data and also the need to ensure wider coverage (both for voice calls and data usage) has become ever greater backed by government policy.
A future support mechanism to enable better and wider coverage will be the incoming Digital Economy Bill will is likely to be enacted in 2017. The Digital Economy Bill will effectively give operators the right to acquire a site and to only pay compensation for it based on its existing use (which may only be 50m2 of grass or scrub) and not the economic value of the site to the operator. Therefore rather than having the right to freely negotiate terms between parties, certain matters will be covered by statute meaning that trying to achieve similar “rental” values to those currently passing may not be so achievable under the new laws. As a consequence we believe that landowners are most likely to be better off obtaining a new agreement under the existing protocol now rather than delaying until the Digital Economy Bill becomes law.
So what should you consider if you are approached by an operator in regards to a new site or a lease renewal?
First and most importantly of all we would obviously suggest taking professional advice from Carver Knowles! This is because there are many things to consider including rights of access, compensation for damages, rent reviews, tenancy break dates and de-commissioning for starters. Carver Knowles have experience of what terms can be agreed and where the market place is at the moment. In addition we will ensure that we only agree terms to ensure that you protect your position under the current agreement protocol so as to preserve your rental income and how the operators can deal with the site in the future. One of the terms that we will also agree is that the operator pays for both your professional and legal fees in preparing the lease agreement so that you are not left out of pocket.