Sale-Leaseback and Build-To-Suit Transactions
Several of the largest wireless carriers have a history of selling large portfolios of tower sites to tower companies in exchange for cash— billions of dollars of cash. The carriers use the cash to buy frequency spectrum and to build new wireless facilities. Sale-leaseback deals result with the carrier, as a tenant, paying a pre-arranged rent to the tower company, as the new site owner. This significant flow of cash in the wireless business has been occurring for the past twenty years.1
Recently the large carriers have been making public statements about how the current business model of site management companies needs to change. It is changing through the rapid growth of microcell site technology that is discussed in Module 4 Wireless System Design. Currently, a few tower companies own many thousands of antenna structure assets, as do wireless carriers.2 It’s not getting easier to build new antenna tower structures, especially in highly populated areas with restrictive local permit regulations and where contention for vacant land is high.
Wireless carriers continue to develop new antenna sites on their own and on the structures of others. Meanwhile, tower companies actively pursue opportunities to build antenna structures for wireless carriers under build-to-suit (BTS) arrangements and master lease agreements (MLAs). Carriers are now seeking antenna placement on poles in public rights-of-way and network connections to these antennas via fiber-optic cable also located in rights-of-way to extend network coverage and system capacity.