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Fixed Wireless Business

Tower Space

It may not be the most expensive part of a wireless network, but WISPs seem to find the greatest variance—and potential cost savings—in tower lease expenses.

[August 16, 2005]

On the ISP-Wireless list in August, SC asked:

For those of you who are familiar does this look like what you have seen or do I have room to negotiate. Also, what has been your experience working with CCI in the past/present...

Thanks for your time in advance. I do not want to use their contractor, I want to use the tower crew that does all our work, have any of you been able to get them to deviate from this position?

Quote from CCI rep:

As discussed per your specifications, the monthly rent is tentatively $500.00 for the 4 Trango panels (approximate dimensions 12"x12" with shields) and total feedlines up to 3/4" and no ground space needed. The structural analysis for this site will be $2,100.00. Your general contractor must be selected from our Crown approved vendor list also.

There will be a few other steps we must take should you decide to collocate with Crown.

1) Credit check

2) Negotiate a Tower License Agreement

[RY replied] "From the sounds of things, CCI is being pretty reasonable compared to how they used to be. CCI, American Tower, and SpectraSite have been pretty expensive in the past. It sounds like they are running out of carriers and now want the WISPs business. One final note: when we get to anything over $300 per month in monthly tower lease it is time for us to consider building our own tower."

[TR objected] "I find that comment interesting. First, what type of deployment (# of antennas, exclusive spectrum range, height, etc.) have you been able to get for $300 a month? It's not uncommon for the cost to be as high as $300 per antenna.

And second, is greater than $300 really the number to consider building your own tower? Sure a 200 ft freestanding tower can be build for as little as $20,000 for a savvy experienced builder. But there are other costs involved such as liability insurance and lease or purchase of the property that the tower will be built on, liability if it falls or needs repair, and Special Exception Permitting Fees (as high as $17,000).

Sure, all of these costs vary drastically based on location. For example, in my county you need to have one and a half times the height of the tower horizontally in all directions away from the neighbors' property line. That's about a couple of acres. In our town, market rate to purchase the land is about $400,000. Of course, there is always leasing from a local farmer for non exclusive use of the land, but the farmers talk, and know that they can get around $500 to $1000 a month for leasing the ground space.

All I'm saying is, when quoting low numbers like $300, that's not painting a fair picture, without defining more info. There was a time when American tower/ATT towers wouldn't let any one on for less than $3000 a month. Although that landscape has changed significantly recently, I personally don't go anywhere with a fee above $500 to $1000 a month anymore, but it took a long time to get enough sites and experience to have the leverage to negotiate my price down.

It's rarely that easy for a startup WISP. Nobody wants to deal with a low volume startup, unless the upfront money is large enough to justify the relationship. It will be interesting to see what the Spectrasite/American tower merger will bring to the table: lower or higher prices? Both American Tower and Spectrasite have advertised interest in WISPs and new markets/client types."

[RY acknowledged] "I did not mean to suggest that $300 per month was the magic number. It is just the number that I use as the flag to indicate that it is time to consider the option of building my own tower. One has to use some imagination and cunning to make it work at that low number. For example, we have two 120 foot self-supporting towers that are located on a client's property. I have both of them in the air at virtually no cost to me. Admittedly, if we had to purchase the land the tower is on, it would have cost us $100,000 or more just for the land. Tradeouts can work quite well."

[TJ agreed] "The most we will pay for tower rent is $250 per month. Anything past that and we find a new location and/or different tower. Most of my tower rents are either a free account, $50 or $100 per month. I'm on top of a 120 foot grain elevator with exclusive rights for the whole top (500 sq.ft. flat space, with enclosed middle section) and we trade for a single account. We currently have 6 antennas on top of it."

[SC replied] "That's great when you can do it... I do the same thing. But I have several commercial towers I pay about $500/month for and looking at several more right now in the works. Why? Simple, I have dozens of customers in each area waiting to be hooked up (sometimes more than dozens). Even 10 residential customers off one tower pays the rent, so I can't not do it.

Surely that makes business sense, right? I'm not talking about some folks that seem interested, I'm talking about ones with signed agreements. This if FL—it's nothing but trees and flat land out there. Just to apply for a permit for your own tower around here is no less than $10,000."

[RY admitted] "And, indeed, we do rent some commercial space. On one building alone we pay over $1,000 per month and in excess of $500 per month for a few others. It is not always possible to get the cost down. $300 is when I start to look for alternatives."

[TR concluded] "I'm jealous. Must be nice living in flat territory. We got lots of those grain elevators and silos available, unfortunately in our neck of the woods they will rarely get you above the hill across the street."

—End