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05/17/2005 18:02 18776885933
<br />Options Open to Redundant Site Landlords
<br />1. Negotiate new Agreement
<br />For landlords of cell sites that are currently in a redundant
<br />market and possibly on a list to be terminated, there are
<br />options available to help position their sites to maintain
<br />long -term revenue. Even if a site is on the termination list,
<br />it may be possible to renegotiate the lease agreement to
<br />make the redundant or unnecessary site more financially
<br />appealing than another site on the keep list that provides
<br />wireless coverage in the same area. By accepting a rent
<br />reduction, it may be possible to maintain an income stream,
<br />rather than having the cell site terminated,
<br />2. Repackage for Sate
<br />An alternative that may be attractive to landlords seeking
<br />options to establish a new revenue stream is to work with
<br />the carrier that is trying to repackage groups of sites for
<br />sale to other carriers to support other wireless services,
<br />including next- generation high -speed wireless Internet
<br />service. Under this alternative, the landlord can opt to retain
<br />the equipment and site as is through a lease amendment
<br />modifying the termination provisions. Typically, the landlord
<br />would agree to abate the rent for 24 months or other
<br />specified period, to allow time for the site to be repackaged
<br />with others and resold. Rents would resume when the
<br />group of sites is resold.
<br />3. Take Site Down
<br />Landlords also have the option to stick to the terms of
<br />their original lease, forgo their rental income, and simply
<br />have the equipment removed after receiving the
<br />termination notice.
<br />What's Ahead for
<br />Non - Redundant Site Landlords?
<br />Even if a specific site is not currently among the potentially
<br />redundant sites resulting from the Cingular /AT&T merger,
<br />it may be affected by the other upcoming mergers.
<br />For landlords of cell sites that are not currently on the list
<br />to be terminated, there are options available to help
<br />position their sites to maintain tong -term revenue.
<br />At the present time, an estimated 90 percent of cell sites
<br />are under short term leases that can be terminated at any
<br />time, typically upon 30 days written notice. In exchange
<br />for reduction in rent and/or modification of automatic annual
<br />rent increases, carders may be willing to negotiate longer
<br />term arrangements that have the potential to be mutually
<br />beneficial by reducing costs for the carrier while maintaining
<br />a smaller but longer term income stream for the landlord.
<br />Prudent landlords who act early to negotiate new
<br />agreements that better fit today's cellular industry climate
<br />can minimize the likelihood that their site will
<br />become redundant.
<br />PAGE 08
<br />Opportunities Ahead
<br />Given the current wave of consolidation, landlords may
<br />wonder how strong the opportunities are for finding new
<br />cellular carriers able to utilh::e their site. A new wave of
<br />wireless services is under development to provide an
<br />alternative to DSL and cak le modern services for
<br />broadband services to the home. These services will
<br />need widespread networks similar to today's cellular
<br />networks. In addition, the a;llular industry will continue
<br />to evolve, and new network, will be required to support
<br />next - generation services, E;:isting cell sites offer a much
<br />more attractive alternative t tan starting from scratch to
<br />develop new sites.
<br />This report Is the sole property of 1 to Coalition for Cellular Industry
<br />Information. Any reproduction or d stribution of this report without the
<br />express permission of the Coalitioi i for Cellular Industry Information
<br />is strictly prohibited.
<br />References
<br />CNN /Money, "Cingular Nabs AT &T Wireless for $41a," Feb. 17, 2004.
<br />CommsDesign, "ANN, Western Winless Confirm Merger;' Jan. 10, 2005.
<br />FCC Press release, "FCC Announces Wireless Spectrum Cap to
<br />Sunset Effective Jan. 1, 2003," Nc v. 8, 2001,
<br />Oligopoly Welch, "Industry Brief: US I 'hone Industry (Part 2, cell phones),"
<br />Jan. 22, 2004,
<br />RCR Wireless News, "Report: Spr ntlNextel Roach Tentative $366
<br />Deal," Dec. 10, 2004.
<br />RCR Wireless News, "From Six to -our: Sprint, Nextei Link Up,"
<br />Dec, 20, 2004.
<br />San Jose Mercury News, "big Deal; Looming in Wireless World,"
<br />Aug, 5, 2002.
<br />Seattle Times, "Post - merger Work 'orce at Cingular to Shrink
<br />10 Percent," Nov, 24, 2004.
<br />The Street.com, "Alltel Buys Old Al &T Wireless Spectrum,"
<br />Nov. 26, 2004.
<br />Wall Street Journal, "Will Nextel an I Sprint Connect ?" Dec. 9: 2004.
<br />Wall Street Journal, "Alltel: Expectir:g a Call ?" Doc. 27, 2004,
<br />Western queens Gazette, "Cell Ph( ne Antenna Fees Could wring in
<br />$21.3M Annually," July 14, 2004.
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