Access Isn't Easy

As an LMDS provider, you already have come across numerous obstacles in rolling out your service. The most challenging part of point-to-multipoint technology, however, is gaining rooftop access for your equipment. An onslaught of emerging sites has increased demand for rooftop space, and everyone is vying for the attention of building owners. Because your network relies solely on rooftops for microwave line-of-sight (LOS) technology, learning to grab the attention of and negotiate with building owners is critical to network build-out.

Property owners quickly are recognizing the financial benefits to leasing their antenna sites and buildings. With the industry average for antenna placement and rental approaching 1,000 dollars per month per installation, property owners potentially can earn 1.8 billion dollars in revenue. The key to site access is understanding how property owners operate, what motivates them to lease space and with whom to negotiate.

Public Vs. Private Owners

There are two types of owners -- public institutional owners and private owners. Knowing who owns the real estate you desire is critical to accessing space. Public institutional owners have a reputation for acquiring the most desirable locations, having the highest-quality buildings and employing the best management to serve their customers. On the other hand, they also generate a large income from renting space and managing their portfolios conservatively. Gaining an institutional owner's interest may be difficult because there is a large demand for these agreements.

Private owners do not always offer the best locations, but they own the largest share of real estate in the United States. Therefore, they can offer access to more tenants and residents. Some private owners have been slow to provide tenants with cutting-edge telecom technology because they don't know it is available, or they do not understand it. Educating and pursuing these owners can be time-consuming, but the long-term results may be more effective and profitable.

Organizational Challenges

It is difficult to identify the appropriate decision-maker, which is the first step in forging a partnership. The owner may not understand the tenant's needs or the telecommunications industry as well as his property managers, but he probably has the final say. Gaining the owner's attention and convincing him that you can both serve his customers better through your service is imperative to successful build-out.

Your business plan requires rapid deployment, but real-estate owners can be slow to execute agreements. When selecting a building, look for an owner who is quick to respond to your needs. Also consider the owner's success, which can indicate the quality of potential customers in his building. Be careful when considering deals in low-quality buildings and antenna sites, and avoid making antenna deals with real-estate owners who are considering major renovations or demolitions.

Site-Access Obstacles

With competition comes another challenge: space constraints. Currently, only a limited amount of riser space is available for providers, making space more valuable and expensive. Also, structural limitations and LOS issues may affect your infrastructure requirements and construction.

You must follow a few rules when working with real-estate owners. Always use professionalism and common sense, and make sure the business terms are crystal clear. Be prepared to motivate the owner to act on your requests because real-estate owners may operate on different schedules. Keep in mind that they want to preserve their physical assets and relationships with tenants as well as make a reasonable, lucrative agreement with you.

Closing the Deal

Once you have identified the buildings you want to pursue and the right people to contact, you should try to create demand for your service among the tenants. Remember, the owner's greatest motivation comes directly from increasing the quality services available to his tenants. Getting customers on your side will make it easier to enter into an agreement with the owner.

An owner's time is valuable. Decreasing technical talk and increasing common-sense business talk is a smart way to approach the owner. The easier you make his life and the more obvious your service's benefits, the faster you will obtain an access agreement.

Finally, make sure the details for your access are in order. Be prepared to provide the owner with FCC path licenses, which grant the rights to transmit and receive signal frequencies. Municipalities are sensitive to antenna-siting issues, so prepare for multiple discussions with government officials on antenna placement before and after you receive the owner's permission to locate on a building. You also will need to provide RF engineering reports, and building and zoning permits. RF engineering reports measure electromagnetic emissions and ensure that they are at an acceptable level. They also prove your antenna will not interfere with any other antenna on the site.

Rooftop Managers

Because of the many variables involved in accessing sites, the quickest and most cost-effective way to complete these transactions is sometimes through a rooftop-management firm. Owners hire rooftop managers to maximize their rooftops' value and manage their telecommunications systems.

Typically, rooftop managers are not paid until the deal closes, so it is in their best interest to pay close attention to your proposal. They also have executive contacts and the power to finalize agreements. Their industry knowledge gives them the ability to immediately communicate the concerns of the owner to the wireless operator, saving time and minimizing future problems. Rooftop managers often have access to several premium sites, giving you the opportunity to reduce negotiations and legal expenses by making one deal for a number of locations. Rooftop managers also know pricing standards for the industry, which saves time and money.

Providers who can deliver the best value to customers by working with real-estate owners will come out on top. Developing relationships with the right real-estate professionals is critical to the success of network deployment.

Although broadband providers are making headlines as they prepare to compete in the United States, there are many international opportunities to explore. According to Cynthia Hillary, Netro vice president of marketing, a large amount of spectrum is available as deregulation opens up global opportunities. The European market represents a larger overall opportunity than United States, she added.

Some broadband providers have taken action to enter the international arena. WinStar plans to expand into the top 50 international markets over the next five years and will launch international services in 1999.

Although most U.S-based companies have concentrated on domestic expansion, Formus Communications has focused on international. It holds licenses in Argentina, Columbia, Ecuador and New Zealand and plans to continue efforts in several other countries. As of press time, Formus was participating in the Australian auctions and had formed a joint venture with Bell Canada International to acquire spectrum. The company is testing and demonstrating broadband technology in France and Hungary as part of government trials. Formus expects Germany and Poland to be the first revenue-generating countries for broadband services.

However, Dave Kimzey, Alcatel Network Systems vice president & general manager, expects the United States will see the most rapid growth opportunities. "If the United States is successful, the rest of the world will catch on."

Other countries have yet to prove revenue opportunities. Canada, which licensed LMCS spectrum before the United States, "has done nothing," according to Douglas Smith, Nortel Broadband Wireless Access COO.