Quick shout-out to Phil Goldstein for his article posted here today on FierceWireless. Here is an excellent quote from it.
“Coverage vs. capacity: Cisco’s Visual Networking Index predicted earlier this year that mobile data traffic will increase 39 times between 2009 and 2014. To meet that demand, Clearwire CTO John Saw said there needs to be an industry-wide paradigm shift away from coverage and toward capacity. “Our cell sites are not able to meet the needs when we become a capacity-driven business and not a coverage-driven business,” he said referring to the broader industry. “Is it time to move up.”
Tower companies, Saw said, need to think less about macro sites and more about micro sites, picocells, distributed antenna systems and rooftop deployments for urban areas.”
In my first Opinion Pole blog I commented that PCIA 2008 in Hollywood, Florida was silent on cellular leases – not the site acquisition process itself, but on the actual leases documents and what can be done to improve them for the betterment of the entire industry. Well I am happy to note herein that PICA 2009 in Nashville, Tennessee was better. The company I work for (Md7, LLC) pushed the topic and began driving the conversations a bit more than usual this year. While it is not my goal to turn this blog into a promotion for my company, it was through the presence of Md7 on two panels and hosting a hospitality suite that we were able to have several public and private conversations about leases and how to make them better.
My colleagues, Thomas Dolislager and Sudeep Gupta both participated on panels in which improved leases were at least part of the conversation. Thomas’ panel was called “Outsourcing to Experts: How to Reap the Benefits” and was sponsored by Message Center Management. The biggest take away from this discussion was to trust experts and select specialists who do one or two things really well. Lease documentation is no exception. While lease negotiations and preparations have long been entrusted to site acquisition companies and law firms, I do see a trend to concentrate in this area even further.
Meanwhile, Sudeep participated on a panel called “Innovative Strategies for Reducing Network OpEx” where he raised the very valid point that over time the single biggest cost of operating a cell site is the rent expense. Monthly rent that escalates each year will eventually outweigh the cost of base stations, zoning, maintenance and even construction. So if rent is in fact the largest expense, then it makes sense to concentrate on managing it and making the documents themselves more efficient and standard.
While not everyone agrees with me that there is a LOT of room for improvement in the hundreds-of-thousands of cellular lease documents currently in existence in the United States and abroad, most agree that rents are high and leases have to be negotiated and renegotiated multiple times – especially each time and upgrade is made to a cell site. Let’s find ways to improve this process.