Wireless carriers have been totally dependant on the tower industry ever since they began operating, but their mutual demand for tower companies to lower leasing rates has risen to a crescendo of late, even though chances of a compromise are dim, says MoffettNathanson Research, an equity research firm specializing in telecommunications, internet, cable, satellite and media sectors. The firm adds that while wireless carriers have so far been persistent on this demand, they are now resorting to threats of migrating to viable alternatives if the tower industry does not heed to their demands. Such viable alternatives could either be alternative sites, alternative structures or alternative technologies.
Dave Mayo, senior vice president of technology at T-Mobile, listed out key hurdles that carriers have to face while maintaining and upgrading leased towers at an event hosted by the Wireless Infrastructure Association in May. Calling the wireless infrastructure market 'rife with opportunity', he said that maintaining towers is complicated and unsustainable and that it needs to be industrialized. At the same time, Sprint has also lowered its capex budget for the year from an expected $4.5 billion to $3 billion, and is reportedly overhauling its cellular network by relocating towers from land leased from tower operators to cheaper government-owned land. Even though Sprint's idea of relocating towers to save costs can be termed as a viable alternative, the current practice of leasing towers from tower companies is still far cheaper than carriers building their own networks which will be prohibitively costly in terms of infrastructure as well as real estate costs. According to MoffettNathanson, it has been reported that AT&T has also asked developers to target several high-rent towers in exchange of offering them contracts to built new towers in their vicinity.