AT&T Says Tower Rents Are Not ‘Sustainable’

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screen-shot-2016-09-26-at-9-55-50-amAT&T is reportedly looking to revise tower lease deals where it can. Letters seen by FierceWireless purport to show AT&T pressing tower operators for new terms, and in some direct language, asking for lower rates.

An AT&T spokesman says the company’s execs are “frustrated with the current tower cost structure and believe it is not sustainable.” The letters imply a “no” response or not responding at all will lead to the carrier’s “review of alternate locations.”

The carrier says it’s revaluating the terms and conditions of all leases coming up for renewal; it seeks to reduce or eliminate price increases, “fair” early termination rights, plus the ability to modify or upgrade tower equipment for no extra cost, according to the account.

AT&T said in August it had a task force analyzing the current tower lease business model.  Some carrier executives have suggested the model is due for disruption as the wireless industry moves toward 5G deployment, reported FierceWireless.

Tower industry experts say letters like these are becoming more common, with “different verbiage but the same ‘reduce your lease rate or else’ concept,” according to Steel in the Air President Ken Schmidt, a tower lease specialist. However analysts who follow the space remain positive about the tower sector because of carriers’ continued investment in new equipment and in more spectrum as the nation’s appetite for more speed in their devices remains unsated.

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