Massive development has occurred in the cellular market over the past quarter century. Beginning it’s life as a gadget that only the elite could afford, the cell phone has become a basic commodity for everyone in all walks of life. This transition couldn’t have taken place without the global growth of wireless networks, the backbone of the mobile phone. For many years, constructing new cell sites and towers was essential for all cellular networks just so they could accommodate the rising demand. Today, market changes and fast-paced technology upgrades have stimulated wireless network providers to reevaluate many of their older cell sites, cell towers, and their wireless leases.

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.

Nowadays, things are considerably different.

Today’s third generation cell phones operate completely different than the first and second generation of just a few years ago. Older cellular networks were far less sophisticated than today’s networks, and they required higher antenna sites to cover more area. Today’s networks?not so much. Today, carriers need more sites closer to the ground that are operating with greater bandwidth. The closer to the ground, the more locations to choose from.

This is the bottom line: cellular networks no longer need all the “prime” spots they leased a few years ago – the technology has changed.

While consumers have benefited from these advances in cell phones and cell towers, there has been a great decline in the amount of rent seen by many property owners with cell site leases. Cellular networks are now checking on each and every lease, and since many of these leases were signed back when the technology was very much different from it is today, they’re often requesting a rent reduction or moving elsewhere. At the same time, these same advances in technology have also led to more competition for cell site leases. Since there’s no such thing as a “prime” spot any more, plenty of property owners are offering low rental rates to attract high credit cellular network leases.

The progress that has been made in this industry has been huge. After 25 years, the industry is still advancing technology at full speed. As the hardware for the cell sites changes over the course of time, re-negotiation of lease terms is the norm. Consumers are naturally happy about this improvement in service, while property owners are understandably disappointed about the lower site rates. Still, there is an upside to this sea-change in the cellular leasing industry. In exchange for re-negotiated lease terms, many wireless carriers are offering guaranteed long-term leases. Even in a competitive environment of declining rents, there’s a silver lining.