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For the last 25 years, the cellular industry has experienced rapid, nearly exponential growth. Cell phones have transitioned from expensive communication devices to a cheap and common commodity. The foundation of cell phones – they won’t work without it – is the cellular network. For over two decades, cellular networks have constructed cell towers and cell sites at an incredibly rapid pace to meet demand. Today, with changes in cellular technology, cellular networks are now trying to reorganize the leases of many of their cell sites and cell towers.

When cell phones started to gain popularity, there was a rush to build cellular towers everywhere. This rush occurred during the first and second generation of cellular technology, in the time period of the late 80’s and early 90’s. At this time, both cell sites and cell towers were often chosen because of their location. There were particular properties and buildings that were considered “prime” spots for coverage, and because of this, cellular network companies had to pay large amounts of cash to get these “prime” spots since the choices were very limited.

But as the expression goes “times, they are a changin’.”

Today, we are now in the third generation of cellular technology, which is completely different than its predecessors of a few years back. The older cellular networks were far less sophisticated than the cellular networks of today. The older cell tower sites often had to use a higher antenna for better coverage. Today, that is no longer the case. Cellular carriers now need to have more sites that are actually closer to the ground in order to offer consumers greater bandwidth. This essentially means that cell towers and cell sites can now be placed almost anywhere.

Because of this positive change in technology, networks no longer need to concentrate on finding the so-called “ideal” areas for cell sites and cell towers.

While all of these cell phone and cell tower technological advances have benefited the consumer, property owners with cell site and cell tower leases are seeing their rents decline. Cellular networks are starting to look very carefully at every lease, and many leases that were signed when technology was much different are no longer financially responsible. Advances in technology have also led to a lot more competition for cell site leases – as the need for “ideal” locations diminishes, many property owners are offering low rental rates to entice cellular networks to move antenna sites from their current locations.

Advances in cellular technology in the last 25 years has been magnanimous, and the industry is still aggressively advancing. The physical needs for a cell site have changed, and cell tower leases are now being renegotiated. A good number of the property owners aren’t quite happy about renegotiated leases and the lowering of their cell site and cell tower rents, but consumers – and even the entire country – are enjoying the benefits of improved performance, service, and the stability of wireless networks. It’s not all gloom and doom as far as landlords are concerned, however. As part of a cell site lease renegotiation, many landlords are able to secure a long-term rent guarantee. Since cellular operators are also one of the best clients a landlord can have, a long-term arrangement is often considered “money in the bank.” Still, technology and market forces are conspiring to force property owners to be more competitive in order to retain their tenants. Such is the march of capitalism.