How Will The T-Mobile/Sprint Merger Affect The Value Of Cell Site Leases?

There has been a great deal of concern from tower owners about how the T-Mobile/Sprint merger will affect the value and viability of their existing cell site leases. It’s a given that thousands of redundant cell tower leases would be decommissioned as a result of the merger. But the effects of this merger go far beyond just decommissioned cell sites.

Cell Site Owner’s Guide to the Merger:

DECOMMISSIONING – First, the bad news. T-Mobile merger documents initially called for decommissioning 35,000 redundant cell sites and building 10,000 new towers. The majority of these towers would likely be Sprint towers that would be redundant with existing T-Mobile facilities. However, the actual number and location of sites that will be affected are unknown.

DISH – The good news. Dish will be establishing a nationwide 5G network in the next few years. This will address governmental concerns that the T-Mobile/Sprint merger would force consumers to pay higher prices and face reduced cellular service. T-Mobile must allow Dish Network the option to consider and utilize thousands of decommissioned sites while it builds out its network. Dish is not obligated to acquire any of these sites, so it will likely pick and choose those sites that fit its specific plans.

T-MOBILE 5G NETWORK ROLLOUT – T-Mobile is in the initial stages of its massive 5G rollout. This implementation will require the addition of thousands of small cell sites and will lead to the upgrade or decommission of some existing towers. Location, cost, and concerns about how existing towers fit into T-Mobile’s 5G plans will determine how individual towers will be affected by this rollout.

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    COST REDUCTIONS – Operational efficiencies and the ability to provide better, broader cellular service were the key drivers of the T-Mobile/Sprint merger. T-Mobile has pledged to maintain Sprint’s current pricing and plans for at least three years following the merger. That, plus the merger cost, equipment conversions, 5G expansion, and other post-merger expenses factor into the need for T-Mobile to reduce other costs ASAP. These expenses will probably speed up decommissions and may increase the likelihood of renegotiations of existing tower leases and lower prices for new leases.

    AT&T AND VERIZON LEASES – The increased competition to fill vacated Sprint sites could drive down the future income and value of other carrier sites.

    YOUR CELLULAR GROUND LEASES – Nobody, not even T-Mobile, can tell you the exact effect this merger will have on the value of your ground leases. Understanding your contracts and the protection and rights they provide are vital to making the proper decisions to protect the value of your cellular assets.

    FREE LEASE EVALUATION: If you would like to find out more how this merger might affect your specific leases, contact a Crescendo cellular ground lease expert. They can help you address your concerns and provide you with options to help you protect the value of your cellular assets. For more information and a free lease evaluation, click here, or call 203.972.3200.