Sprint/Nextel is planning to decommission 20,000 cell sites – one-third of its 60,000 sites across the United States – over the next several years, according to BTIG telecom analyst Walter Piecyk.

On June 1, 2010, Piecyk launched coverage of Sprint (S) with a Sell rating and $3 target price, noting that the company intended to decommission one-third of its cell sites and expressing skepticism of whether it would be able to do so within two years. In a subsequent blog post dated September 13, 2010, Piecyk stated that Sprint has now reiterated its decommissioning plans in several investor meetings but has been presenting a more extended time frame for achieving its goals. BTIG estimates that Sprint will spend $2.5 billion on its decommissioning effort.

Sprint’s announcement should serve as a powerful reminder to cell site landlords nationwide that the continued existence of the cell site on their property is not inevitable. The fact is that as much as 95% of cell site leases in the United States give the wireless carrier the right to terminate – and stop paying rent – with 30-90 days’ notice. Site decommissioning results from mergers and acquisitions (Cingular and AT&T Wireless, Sprint and Nextel, Alltel and Verizon), technological obsolescence (as is the case with Nextel’s iDEN technology on Sprint’s network today) and other reasons.

If you are a cell site landlord, the foregoing 30-90 day termination language makes it impossible for you to go to your local bank and borrow against the cash flows associated with your cell site. Fortunately, AP Wireless Infrastructure Partners (“APWIP”) will nonetheless pay you a large, up-front lump sum for an assignment of your site rent.

Why, you ask, would APWIP pay me a large amount of cash for a lease that may in fact be terminated? The answer is simple. For most landlords, receiving site rent is a “binary” proposition: either they receive rent (“1”), or they don’t (“0”). On the other hand, APWIP seeks to compile a portfolio of site leases in which a single lease termination is far less consequential. This is one reason APWIP is able to pay a large, up-front lump sum for the future rent associated with your site and assume the risk of a possible site termination. In addition to this, APWIP has a relatively low cost of capital and purchases future rent on a discounted basis reflecting the financial risk associated with potential site terminations.

At APWIP we pride ourselves on listening to your needs and on presenting unique, creative and customized solutions. We seek not only to deliver what we promise but to exceed your expectations. We make large payouts, we are efficient and we close quickly. If you are interested in “cashing out” your cell site lease, please call us today at (866) 843-0433.

On March 20, 2011, America’s second largest wireless carrier, AT&T, announced that it intended to acquire T-Mobile USA, America’s third-ranked wireless carrier, in a transaction valued at $39 billion. The transaction would push AT&T into the top slot of wireless carriers with a combined market share of approximately 44%. Following the merger, AT&T and Verizon would jointly account for almost three-quarters of the U.S. wireless telecommunications market.

Although AT&T’s bid for T-Mobile is heavily criticized by many consumers and AT&T rivals, including Sprint/Nextel, AT&T is highly confident that it can convince regulators to approve the deal. This confidence is underscored by the fact that AT&T has agreed to an enormous break-up fee: if U.S. regulators reject the proposed acquisition, AT&T will pay T-Mobile $6 billion in assets, services and cash.

One of the results of AT&T’s acquisition of T-Mobile will be the long-run decommissioning of towers and cell sites as the two companies integrate their facilities. In announcing the deal, AT&T and T-Mobile said they expect to experience $3 billion per year in “synergies” resulting from, among other things, reduced network operation costs and spectrum efficiencies. Some of these efficiencies will no doubt flow from the consolidation of the companies’ wireless networks.

AT&T’s announcement constitutes another reminder to cell site landlords that the continued existence of the cell site on their property is not inevitable. The vast majority of U.S. cell site leases give the wireless carrier the right to terminate – and stop paying rent – with 30-90 days’ notice. Site decommissioning results from mergers and acquisitions, technological obsolescence and other reasons.

If you are a cell site landlord, the foregoing 30-90 day termination language makes it impossible for you to go to your local bank and borrow against the cash flows associated with your cell site. Fortunately, APWIP will nonetheless pay you a large, up-front lump sum for an assignment of your site rent. APWIP is willing to do this because it runs “portfolio risk”; that is, in light of its large and diversified portfolio of cell sites APWIP can absorb a fair amount of site decommissioning.

At APWIP we pride ourselves on listening to your needs and on presenting unique, creative and customized solutions. We seek not only to deliver what we promise but to exceed your expectations. We make large payouts, we are efficient and we close quickly. If you are interested in “cashing out” your cell site lease, please call us today at (866) 843-0433.