Overview of the Communication Tower Industry
by M. Eric Furlow

With over 150,000 communication and broadcast towers in the US, the ownership base of these towers is quite diverse. However, the bulk of ownership is made up of basically three groups: public companies, small private companies, and individual owners.

  • Public tower companies. There are 5 public tower companies who own towers in almost every Tier 1-3 market in the US. Each of these 5 companies owns several thousand towers:

    American Tower: Ticker "AMT"
    Crown Castle: "CCI"
    Pinnacle: "bigtq.pk"
    SBA Communications: "SBAC"
    Spectrasite: "SSI"

  • Small private companies. There are over a hundred of these companies. Many of these, but not all, build, maintain and lease towers not only for their own portfolio but also for individuals. These companies typically own between 10-500 towers with particular geographic focus.

  • Individuals. There are several thousand individuals across the U.S., who own approximately 1-10 towers each. Usually they entered the business from the telecommunications or broadcasting industry. Individuals are attracted to this type of investment because of the ease of ownership and the consistent monthly recurring cash flow.

Types of towers
There are three basic categories of towers: guyed, self-supporting, and monopoles. Each of these tower types has pros and cons with regards to cost of steel, land requirement, construction cost, and tenant capacity.

Guyed towers, typically 100'-2,000' in height, are less expensive to construct with respect to steel costs. However, they require much more land for the guy wires to stretch out from the tower to anchor points.

Self-supporting towers, typically between 100'-500', are more costly to construct requiring more steel, larger foundations, higher erection cost, yet the land required is 85 percent less than guyed towers. Both of these towers can support most of the wireless technologies including AM/FM, TV, paging, two-way radio, cellular, microwave hops, PCS, and wireless ISP gear.

Monopoles are typically between 100-225' and are designed primarily for PCS and cellular equipment. However, they can be used for other technologies requiring lower tower height.

As opposed to broadcasting technology which uses one tower per market at 1,000' to 2,000' and blasts the signal up to a few hundred miles (AM radio), cellular, and PCS carriers locate transmitting equipment at 100' to 225' in order to pass the phone call within 3 to 10 miles to the next cell site. At a greater height they would interfere with adjacent cell sites. Monopole towers are popping up everywhere in neighborhoods and downtown areas, which are the primary target areas for fixed wireless operators. In addition, it's easier to get permits for monopoles within city limits than for the taller guyed or self-supporting towers. The downside is that in almost every case a PCS carrier is already at the top of the tower.

The pros and cons of tower negotiations
Negotiations with the five public tower companies are usually the most complex. Communication with several managers, usually located in different parts of the U.S., is common when seeking to add transmitting equipment. This can be quite time consuming. The positive aspect of dealing with public tower companies is that they can provide complete "turn-key" services with regards to installation and maintenance. In addition, most of these towers are first class facilities. The facilities generally include the property, the building which contains each of the tenants transmitting equipment, security, fiber to the tower site, power back up and regular maintenance of the tower. It is important to note that public tower companies are tracked by Wall Street and are therefore more rigid with regards to monthly tower lease rates and terms. The small private tower companies are usually "turn-key" as well, or at least have contacts who can provide all of the necessary tower services. In addition, they are notably more flexible with regards to price and terms.

The best deals for tower space are often found with individual tower owners. Individuals call all the shots regarding price and terms and usually don't waste time. Sometimes it is possible to complete the equipment installation within days of negotiation. Individual tower owners usually cannot provide assistance with the other tower services required. However, with a little research, a service provider can easily find the necessary contractors to install and maintain the equipment. The saving from the monthly rate can more than offset the cost of finding contractors.

Locating a tower for your wireless system
The selection process is quite simple. First figure out what area you want to transmit from. Then, simply drive around the area looking for towers. You can do this online, but you cannot see the quality of the site. In almost every case, there is a sign at the base of the tower which lists the tower owner and contact information. Call the owner and ask if there is additional space and what the price and terms would be.

Once a tower is located and the price and terms are negotiated it is extremely important to the success of the business plan to do an RF engineering study to see if other transmitting equipment already on the tower will interfere with your equipment. It can be terribly costly to a fixed wireless company to execute every aspect of the business plan well, only to find out that after selling the service to several customers that another tenant on the tower causes occasional interference with your equipment. No doubt the result would be the loss of those customers forever and the company reputation tainted. I have seen this happen many times in the past. The right tower engineer can perform an inter-modulation study to determine if there will be interference problems.