Without Real Estate Nothing Works
By Tom Leddo, Vice President
“Buy land, they’re not making it anymore.” – Mark Twain
A few years ago, I was eating breakfast in a very crowded restaurant at the Wynn while attending CTIA Super Mobility show in Las Vegas when a young woman noticed our common CTIA lanyards and asked if we could share a table.
At that moment, I knew of only three things that we had in common – we were both carbon based, attending CTIA and hungry. So of course we made small talk about CTIA.
She kicked off the conversation with a typical question “what part of the cellular industry are you in?” When I replied that I work in a very “non-sexy” segment of the industry – real estate, she of course assumed I meant the retail locations.
Because my wife has informed me more than once that site acquisition is not interesting table conversation, I quickly tried to explain how cell site leases work and then shift the focus to her motivation to be in Las Vegas for this show.
As it turns out, she was a technology blogger attending CTIA Super Mobility to see some of the latest gadgets and wireless products. But it was what she said next that got me thinking. She said “so you are saying that we have all of this cool technology on display here this week, and none of it would work without a good, old fashioned real estate deal underneath it.” Prior to that breakfast I had never thought of it that way, but she was right!
There is no question that various wireless technologies, especially the handsets and apps that run on them, are more interesting than cell site leasing, that is why I often blog on those things as well as wireless real estate. But let’s give ourselves some credit – site acquisition is crucial to the timely deployment and maintenance of a cellular network.
And over the last few years cell site leases have become even more crucial as mobile operators seek to maintain their average revenue per user (ARPU) in a significantly more competitive environment. Operators are paying more attention to rents as their rent rolls are among the top three operational expenditures (OpEx) along with payroll and backhaul.
When engaging site acquisition we need to make sure we are keeping a close eye on the rents in addition to the location and speed of our deployments. As these rents continue to escalate along with the number of sites needed to meet the demand for bandwidth, rent roll will continue to be a key issue for wireless CFO’s because they know their networks will not work without the underlying deals that those rent rolls maintain.
I was so encouraged by my conversation with this young technology blogger that when we exchanged business cards, I thought for sure she would contact me to be interviewed for an article on her tech blog about site acquisition. Unfortunately, I never heard from her. I guess my wife is right.