Treat us like the utilities we believe ourselves to be, say UK operators Rents on mobile phone masts should drop dramatically, with a pricing model loosely based on that used for utilities, states a report from Deloitte, commissioned by several mobile network operators. The professional services firm says that where a mobile network pays £7,500 yearly in rent for sites in rural areas, and £9,200 in …
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> According to this very rag we're reading
Erm, no, that's according to Tim Worstall who is quite happy for big corporations to game the system and say it's ok because "that's what the law says" and they're "just maximising profits for shareholders".
I agree that the politicos shouldn't have made laws like that, but, ask yourself this: Who encouraged them to do this? Cui bono...?
You can't compare a water main with a cell tower. If you've got a pipe going across your land it restricts where you can build as the utility will have an easement over the land, but you don't have to look at it every day either. Also you can build a road over a water main, you can't exactly drive through a cell tower.
The closest comparison would be telephone pole, but these tend to be kept out of the way and the only time they come onto your property is when the cable overflies it. You do get them on farmland in rural areas but again they tend to be more out of the way. The other side is that telephone line maintenance is much less frequent than that of the mobile towers, so the landowner doesn't have to move his livestock as often.
That's a pretty spurious argument that could easily come down the other way, which really only boils down to "they look a bit uglier than telegraph poles" but not (imo) pylons.
Water mains are probably the most intrusive of the lot. Far harder more expensive to move than an electricity cable.
Not that I would wish to see the operators pocket the difference but I actually think they have a point on this issue. At this point they certainly deserve equivalence with BT telegraph poles if not the full utility shebang.
Pipes are less intrusive than cables, but only once they've actually been installed and left in the ground for a few years.
Case in point: My family farm recently (last 18 months) had a 100mm (4ins) trunk gas main pushed through it. Now, the only things on the surface giving you a clue to the fact that the pipe's down there is a pair of plastic markers warning you not to dig, and a big green cabinet full of electrolytic/cathodic rust prevention gear.
Now, the problem is that while the pipe is pretty much out of the way (they do bury them pretty deep), the soil has had to be disturbed over a wide area (the pipe may only be 100mm, the trench was more like 50m), and as it has been dug up, the substructure/root structure that was there will take 5+ years to redevelop, until then the ground above the pipe is essentially a useless quagmire.
Poles, while visually more intrusive, are considerably less damaging to the land/soil structure than burying underground (you can simply auger a hole and drop it in). Pylons with foundations somewhere in the middle.
However, this discussion is not about which is most damaging to the farmer (who usually welcome such developments due to the guaranteed income of wayleave payments), but which one gets past the august decision making of the local planning committee. Utilities (Gas, water and electricity) have special rights regarding planning for installation and new works. Telecoms firms like Openreach have some, but they are not treated the same as electricity suppliers with regards to road closures, planning permission and other "official" dispensations.
So the landowners don't set the prices, the government does? What happened to the cold hand of the market?
And where do you think the savings will go to?
1) Infrastructure, albeit unprofitable rural ones.
2) Passed onto the customers with cheaper prices.
or
3) "Shareholder Value" and "Executive bonuses"
I don't understand that either, maybe they just mean on public land.
The profit would definitely go to the shareholders, but it would also allow them to expand into rural areas so we both would win.
Isn't the simple solution to just offer a discounted price in the rural areas and leave the rest of the country as is?
"So the landowners don't set the prices, the government does?"
For utility infrastructure, yes. Else you end up in a position where the farmer whose land telephone poles or gas pipes or electricity poles need to cross to reach a customer sets an astonishingly high rent. BT and KC have a universal service obligation where they have to provide service for a set fee regardless of cost (with some exceptions) so it would be something of a licence to print money. For that reason the government sets the rent.
"And where do you think the savings will go to?"
Price reductions, without a doubt. The UK market is very competitive and prices are low. The only way to win customers from your rivals is to cut price further. Margins are very low in the UK, which is why EE and O2 have been sold - the businesses weren't making enough money for their owners.
"There are far, far more cell sites than there are transmitters for public broadcasting."
I can believe that, but as I say, in my experience of rural areas cell sites and TV transmitters (local fillers, not main sites) are usually on the same mast or tower, for the simple reason that most villages large enough to warrant a TV filler mast are also likely to be large enough to warrant a cell site. Also, you only have to deal with one "landlord" (Arqiva) and there's definitely power available.
Well, I don't like them one little bit but it seems that actually, they have a point.
If cell towers make less money than the land rental (set by HMG) they cost to site, there's a problem. Especially if a similar footprint such as a telephone pole costs BT effectively fuck all.
One thing that does rather add to the confusion is tax. Not jumping on the "Vodafone owes me a gazillion pounds" bandwagon here - simply pointing out that equipment site rental is a wholly tax-deductible expense for everyone else. Is it not deductible for MNOs? If not, why not? If so, why aren't they deducting it?
Especially if a similar footprint such as a telephone pole costs BT effectively fuck all.
Erm, let's see.
A cell tower has foundations, equipment compound, electricity supply and site access needed.
A telephone pole has, well a hole in the ground.
How is that the same thing?
A few reasons:
Pylons, electricity poles and phone poles don't always go where you want a mast to go. For example, where I grew up the phone and electricity lines followed the valley floor, not the mountain tops where you'd want a phone mast.
Wind turbines aren't static, they rotate to face the wind, and those big spinning metal blades may not help RF propagation much
Big tress usually have preservation orders on them, so you can't nail your kit to them. Also, wet leaves are very effective at blocking RF.
"Moreover, if this reduction in rental payments was invested in network roll-out, network coverage could exceed actually 90 per cent.
Alternatively, it could be used to invest in deeper coverage and faster mobile broadband."
In reality it will be used to line the pockets of shareholders and executives.
Well.. some of the money. For example, BT group have a D/E of 0.7 meaning for every £1 of investor's money they have borrowed another 70p, to fund the groups activities. But you're right, of course, I'm not sure about the UK, but in the US, if a CEO failed to get "Shareholder Value" (Read, increased share price, dividends, or performed a buy back of shares) with profits, then he can and in some cases have been sued.
"In reality it will be used to line the pockets of shareholders and executives."
More likely it just hastens the race to the bottom in pricing which is the winning strategy in the UK for pretty much everything. (Manufacturers of white goods make special lower quality versions for the UK market as they will not sell unless they're the cheapest).
EE's and O2's owners have sold their businesses in the UK because they don't make sufficient return compared to elsewhere in Europe. Lower price means more customers. More customers equals lower ACPU.
Conceptually mobile telephony is a utility now and it's to the general good that blanket mobile coverage is facilitated with only reasonable rent paid to landowners. There will be good arguments over what 'reasonable' is but the utility figure looks a good point of reference.
I'm sure there are many concurrent examples where the operators argue that they shouldn't be treated like utilities when it's to their disadvantage but they should be criticised there rather than here, otherwise they have a cast-iron case for providing crap coverage in difficult areas.
Of course the big issue here is the conflict between private property rights and interests and the desire to have the best coverage possible. Should landowners be required to provide a service to the rest of us so we can have good mobile data coverage?
Talking about farmers is one thing but the real issue must surely be urban data capacity. As experts in removing mobile masts from development sites we know the cost that can be associated with this and therefore find many informed landlords now saying that they just don't want to bother with mobile infrastructure because the return does not justify the aggravation - a situation frankly that has been brought on by the use of the code to resist removal of kit and the constant push to drive rents down. Hardly surprising that in many quarters the suggestion of allowing mobile infrastructure on to property is not seen as a sensible move. It will be interesting to see if the government has the stomach for taking on the property industry - we aren't talking about the odd wayleave or telegraph pole here.
Regards
Michael
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