Thoughts on the T-Mobile Sprint Merger

Now that T-Mobile and Sprint have merged, there are many questions about the impact for cell site landlords. These questions are valid in light of the information presented by Sprint and T-Mobile throughout the merger process, speaking of decommissioning many sites, keeping some Sprint sites, and integrating two different technologies into one cellular network.

Given the confusion, we provide the following opinions on several items we foresee as ‘hot buttons’ in the upcoming year.

1. Expect plays on fear. There are several aspects of the wireless industry in which we expect fear to be used as a motivator:
   1. Rent reduction demands: we expect the usual players to call and request or demand rent reductions or other lease modifications with the premise of having a better chance of keeping your lease. This demand may be accompanied by a promise that your site will not be decommissioned for several years.
   2. Lease extension demands: for leases with less than 5-7 years, we expect contractors of Sprint or T-Mobile to call and request or demand that you make changes to your lease in order to secure your site.
   3. Lease buyout requests: we expect additional activity across the industry, but especially at T-Mobile sites, potentially at reduced pricing levels, hoping that landlords will sell the leases to reduce risk. We also expect pricing for Sprint sites to be drastically reduced, if interest exists at all. Also, be aware that many deals are ‘repriced’ late in the transaction, meaning you are offered one price, but that price changes late in the transaction.
2. Landlord-owned structures; beware of combining tenant equipment/increased loads.
   1. As T-Mobile and Sprint combine networks, there is a probability that equipment will change. Many times combined equipment equates to increased weight/wind loading on Landlord-owned structures. These loads need to analyzed and leases may need to be modified. Generally speaking, additional loading should benefit both landlord and tenant.
3. Decommissioned sites may result in abandoned equipment.
   1. During the last several decommissioning cycles landlords were left with unwanted equipment on their sites. Many times they were talked into accepting equipment under the premise that it would be easier to attract new tenants if equipment were in place. We can help you ascertain if this is accurate.
   2. Most leases have specific site restoration requirements. We can help walk you through how this should look.
4. Contractors may not understand changes in site operation. Especially for sites where operations are merged, contractors may believe that site access and modification rights are the same for all carriers. This can lead to confusion and changes to sites that are not welcome by landlords.
5. Merger may mean increased traffic at your site due to operating two networks at one location. As the two networks currently operate on different technologies, landlords could end up with combined sites requiring service by separate technicians, resulting in increased traffic along with increased loading. Care should be taken to ensure this is done in accordance with the lease. In some instances this combining should include lease modifications and potentially increased rent.
6. Responsible entities will change.
   1. Landlords of many Sprint sites will see leases transfer to T-Mobile.
   2. Dish Network may acquire any of the 30,000 sites slated to be cut from the new T-Mobile network.
   3. Some leases do not allow for assignment, the new tenant may not follow the same protocols as the former tenant, may approach site operations differently, and may make changes to site upgrade and installation protocols.

Gunnerson Consulting is available to answer questions regarding all aspects of cell site operations, both small cell and macro site; and in any installation venue including rooftops, water tanks, and stealth sites, ground leases housing towers, and landlord-owned tower structures. Contact us today for your no-obligation consultation.