Carriers not too sympathetic to tower industry doldrums

NEW ORLEANS-One message was clear during today's keynote session at the tower industry’s annual Tower Summit: wireless operator executives aren’t losing sleep over the financial plight of the public tower companies who hold manage their towers.

“We’ve been living with the financial problems of many of our partners for several months now,” said Anthony Sabatino, senior vice president and chief technology officer of Alamosa PCS. “We can’t run our business based on what tower companies are going to do.”

The thinking is that a number of new tower management companies are in the space chasing business. Someone will manage wireless towers for carriers.

“We want to see a healthy services and towers industry, but we don’t want to put it in front of our business. We’re not going to rush around and spend money like the tower companies want us to do,” said Colin Holland, regional vice president for the West region with Nextel Communications.

In fact, said Neville Ray, vice president of engineering and operations with T-Mobile USA, carriers haven’t been hard enough on the tower industry.

“We’ve been brutal with our infrastructure vendors, and we’ve been light on the tower guys. We have business objectives that we need to accomplish,” said Ray.

Ray was the first to berate the large public tower companies for not treating T-Mobile as a customer. “We’re not your banker,” he said. “There is a lack of focus and in investing in relationships with our company.”

The primary contentious issue is rental rates. When carriers sold their tower portfolios to tower companies in the late 1990s, they entered into lease back arrangements. Tower companies, struggling with debt, want to increase the lease rates, while carriers want lower rates. Neville promised that T-Mobile will put pressure on its various tower partners to lower rental rates.

“Those who can do it will have a relationship with us,” he warned.

“We want lower prices,” said Holland. “[The tower industry] needs to get its head together. Perhaps you can take non-performing assets off the table by swapping them. We’re open to any ideas that will drive down prices.”