Chris Lindley gives an insight into current topics for landowners who let land for mobile phone masts and in particular the issues at renewal of leases.
The last 6 months have witnessed a seismic shift in the relationship between mobile phone mast users, operators and landowners. With the collaboration between T-Mobile and H3G and separately the 'Cornerstone' collaboration between Vodafone and Orange, there are now effectively 4 distinct operators in the UK O2, Vodafone/ Orange, T-Mobile/ H3G and Arqiva. Although these companies outwardly retain their individual brands to the consumer, the consolidation of technical functions (in particular masts and their maintenance) means landowners are presented with 4 operators.
Add to this a major technical change in how masts operate. The original concept of 'mast sharing' involved another operator bolting dishes and equipment on the mast. The landowner could count the number of items and knew who owned and operated what. Recent technical innovation now permits operators to share networks, allowing more than one signal to be transmitted from one antenna at a time. The landowner no longer knows and may have limited control over who uses the mast at any time.
The net results to the rural landowner are two fold. Firstly, fewer masts are required. Thousands of masts will decommissioned, as a result of new technology and fewer operators. Secondly, there is considerable pressure by operators to reduce rental levels, both at rent review and renewal. Landowners will receive letters regarding collaboration between companies with assurances that lease terms have been checked and consents are not required. These should be reviewed as frequently the collaboration is not permitted. This may be an opportunity for the landowner to seek enhanced terms.
At renewals, operators will demand poorer rent review terms, increased tenant break options, enhanced equipment rights and lower site share payaway. I know of one instance where one operator, on the point of signing Heads of Terms at a renewal (at similar rental level to the previous rent), has unilaterally reduced the rent offered by 15%, at the same time as demanding more favourable terms generally.
It might be an advantage to permit the existing lease to continue ona yearly basis the existing rent might be higher than that offered for a new lease. This must be weighed against the uncertainty of a year to year scenario. The landowner has to balance the risk of his mast being removed against how hard he negotiates. Landowners should therefore consider the existing lease very carefully, taking advice from their solicitor and experienced surveyor before acting.
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