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Tower Colocation Leases

Tower colocation is where a wireless carrier installs or colocates their equipment on another carrier's or tower company's tower. The wireless carrier will lease ground space in the tower owner's lease area, if available, and will lease or licence space on the tower for their antennas and coaxial cable.

A typical tower colocation lease is structured in one of two ways. First, a carrier leases each tower site individually and signs separate colocation leases for each location, particularly if they are located outside of the original carrier's leased area. Another option is that the collocating carrier places their equipment shelter inside the existing carrier's leased area and sublets from the existing carrier.

Alternatively, a wireless carrier signs a master lease or sharing agreement with a tower company or another wireless carrier which defines the terms and conditions upon which future individual leases will be agreed upon. The master lease can either specify the price and the lease terms or just the lease terms for future colocations. When the carrier wants to use a specific tower, they execute a site license agreement or site lease agreement with the existing lessee which contains the specific information relevant to that location, including relevant capital contributions, sharing of rental costs or other payment arrangements. For instance, the carrier may specify that they be allowed a certain number of antennas and a certain number of cables for a specific price. The price in the master lease agreement may be structured as a one-size-fits-all whereby the colocating carrier pays one price regardless of the number of antennas/lines, or it may be structured with a fee per number of antennas and lines.

The actual pricing varies depending upon a number of factors which include:

  1. Size of the lease area required, and whether in or out of the existing "compound"
  2. Number and thickness of coaxial cables
  3. Weight and size of antennas
  4. Height of antennas (rad center)
  5. Generator placement
  6. Availability of space
  7. Location
  8. Escalation increases
  9. Guaranteed term

We can share our experience and provide consulting services on how you can improve your tower colocation lease rates. We can recommend a strategy for negotiation based upon our experiences working in the wireless carrier and tower industries. . If you consider that improvement of $1200/annum equates to $40,000 in increased revenue with a 20 year lease at 4% escalation, it doesn't take much to justify the value of our services. We can also provide guidance on the contractual language in the master lease agreements and share with your solicitor for their review as to what is customary and what is atypical in our experience. We can point out the pitfalls of the typical colocation lease.

Please don't hesitate to contact us.