This report is not just an analysis, but also a tool that can show mobile operators around the world how to both reduce their rental costs on mobile masts sites, and also improve regulations and rules governing the whole placement of mobile masts issue.
The analysis describes the full process from a mobile operator receiving a mobile licence and up to being able to offer customers mobile coverage having built a mobile network - in other words the process from frequency to mobile signal.
Background information: The mobile antenna market – and how it works
Mobile operators have erected millions of mobile masts around the world. In other words there are millions of locations around the world where mobile operators have erected a mobile mast that handles all the local mobile traffic that is daily being generated. To create mobile coverage, the mobile operator needs to find a suitable location to place each mobile mast. Local councils play a central role in this task, as it is the local council that approves the mast application that is required to gain permission to erect a mobile mast.
In cases where operators choose to rent a location from a council, it is most often the same council office that handled the building application, that also rents out council land. In practice councils can easily force mobile operators to erect mobile masts on council land, rather than on private property. There are many examples of councils around the world forcing operators to use expensive municipal plots of land instead of cheaper private property.
It usually takes between 12 to 18 months to find a suitable location, sign the necessary agreements and erect a mobile mast. The cost of actually erecting a mobile mast will usually end at around somewhere between 100,000 and 200,000 euro. Basically, erecting a mobile mast is a long, tedious and costly affair.
When the mobile mast has been erected and is fully functioning, it becomes part of a mobile network that often consists of between 3000 - 5000 mobile masts that together ensure full mobile coverage for the mobile operator’s customers. Moving a mast from one location to another is an elaborate and expensive process that will almost certainly result in a change in the quality of mobile coverage for some customers. This can furthermore result in making it necessary to move other mobile masts to restore full mobile coverage. Many mobile masts around the country are not just a single mobile antenna, but rather a communication hub that uses radio transmitters to connect mobile antennas to the mobile operator’s central network.
In our analysis "How mobile operators can reduce cost for mobile masts and improve mast regulation" we have described the process from when a mobile operator decides to build a mobile network, up to the point where they actually can offer their customers mobile coverage via a network of mobile masts. We have examined the challenges operators face in the following situations:
The local council is often the authority that both approves the location of a mobile mast and rents out public plots of land to mobile operators. By combining the two jobs of approving the location and owning the location, the council ensures that the mobile operator actually has no choice or say in the matter regarding the location of a mobile mast.
Councils are fully aware of the fact that it is very expensive to move a mobile mast. The cost of erecting a mobile mast is basically a "sunk cost" as none of the investment can be reused if it later becomes necessary to relocate the mast.
If a mobile operator decides to move an individual mast, it often becomes necessary to also relocate other masts, as each individual mast is part of a larger network that ensures seamless mobile coverage in the area the operator covers.
When a property owner that has mobile masts on his property sets the price for renting their land, the price is not based on the actual value of the plot of land, or what it would cost to rent an identical plot of land nearby, but is solely based on what the owner calls a "market price". A number of land owners believe that the "market price" is the highest price that a land owner somewhere in the country managed to negotiate for a plot of land with a mobile mast.
In our report "How mobile operators can reduce cost for mobile masts and improve mast regulation" we have documented how landowners have speculated in increasing rental prices when a rental contract expires. Our investigations show that despite using industry standard contracts that stipulate that rental increases must not exceed e.g. 3-5%, the actual increase in rent is often 15-30% a year. Our report documents that there are many examples of both private and public landowners taking advantage of their monopolistic status once a mobile mast has been erected on their plots of land and subsequently significantly increasing their rent.
The analysis "How mobile operators can reduce cost for mobile masts and improve mast regulation" has changed the market conditions for the Danish mobile operators and has helped the Danish political system understand that both private and council land owners were taking advantage of mobile operators and that the politicians needed to stop this. In less than six months Strand Consult changed the way that operators, the Danish press and most importantly the Danish political system views this area of the mobile market.
Our report also includes a number of suggestions on what mobile operators can do themselves in this area and how Strand Consult and others handled the situation in Denmark with the sole goal of changing the conditions that mobile operators were locked into when negotiating locations for mobile masts. Denmark was the first country to stop the Wild West conditions that mobile operators were battling in this area - we are sure it will not be the last.
If you would like more information about our analysis "How mobile operators can reduce cost for mobile masts and improve mast regulation" and how mobile operators can handle these challenges in other countries please click here to receive more information