Caution Urged as Mobile-Phone Companies Offer Landowners Less than a fiver' for Radio Mast Sites

Mobile operators are trying to take advantage of new rules on the siting of phone masts to offer landowners less than 5 a year for radio mast sites previously leased for more than 5,000, property experts are warning. 

One company has offered a one-off payment of just over 30 for a 10-year lease of a site that currently is rented for in excess of 7,000 per annum, according to Galbraith, the independent property consultancy. 

Telecom firms are seeking to slash rental payments under cover of the Electronic Communications Code, introduced in December to speed nationwide access to the digital economy. But Mike Reid, head of energy and utilities at Galbraith, said the phone operators' approach to the legislation is likely to result in landowners resisting new agreements, delaying the rollout of networks and having the opposite effect to the purpose intended by the introduction of the new Code. 

In addition to bringing vastly reduced rents, some terms being proposed by the operators give them more rights than they have been granted under the Code and they are also looking to limit the liabilities imposed on them under the Code, all to the detriment of the landowner.

Landowners generally support efforts to achieve better connectivity, but I doubt they'll be prepared to agree to the proposals currently being put forward by the phone companies. We understood the operators wanted a fair and balanced way to serve the need for masts. This is not the solution property owners had in mind.

A Government impact assessment carried out before the new law came in envisaged rents would fall by around 40%.  However, based on what could be a misunderstanding of the Code, operators are offering a range of consideration payments from 3 a year for greenfield sites that previously attracted rents in excess of 5,000 per annum, and 50 for rooftop sites that previously commanded rents of around 12,000 per annum.  

The Code governs all new agreements from 28 December 2017 for electronic communication apparatus including cables, wires and radio masts. Parties may not contract out' of the Code, although more rights than set out in the rules can be granted to the operators. 

Developers who purchase properties for redevelopment should ensure they know whether there are any Code rights in force as these need not be registered against the title, so may not be picked up in a property purchase. With a minimum of 18 months' notice required to terminate a Code agreement, this could greatly delay any redevelopment plans, said Mr Reid. 

Faced with a huge drop in rental income, many owners will decide to resist proposals to impose new Code rights on their properties.  Operators who decide to impose an agreement strictly in accordance with the Code, may find this doesn't give them the same flexibility as a negotiated agreement based on the Code rights, said Mike Reid. "We also have concerns for the ongoing working relationship between parties in these circumstances."

New Code agreements will be developed over time and it is important for landowners to receive professional advice prior to signing up to any terms proposed, he added.  

Read more in Galbraith's Energy Matters magazine issue 16, here