Landowners Urged To Keep Their Cool In Dealing With Big Phone Companies

7 April 2014

Property owners should think carefully rather than giving up their rights under agreements with mobile telecommunications companies, experts are warning. Landlords told by network operators that their incomes may be at risk unless they agree to revised terms should seek independent advice, according to CKD Galbraith.

Vodafone and O2 owner, Telefonica, have agreed to share infrastructure and have set up a joint venture company, Cornerstone Telecommunications Infrastructure Ltd (CTIL), not only to improve phone reception for customers, but also looking to cut costs in response to competitive pressures affecting their industry.

Vodafone and O2 have been writing to individual landowners requesting their agreements are assigned to CTIL and proposing changes in their favour.  Requests for significant rent reductions, frequent tenant’s break clauses and more relaxed agreement terms are commonplace, sometimes giving the impression the site will be decommissioned if suitable terms can’t be agreed. While some sites will be decommissioned as part of the network consolidation plans agreeing to the operators demands could make little difference as to whether a site is retained as part of the wider network.

According to Mike Reid, Head of CKD Galbraith’s Utilities Department, this does not necessarily mean property owners should concede to the operator’s demands and bear the brunt of cost savings.

“Some landlords will actually be in a very good position to renegotiate to their own advantage,” said Mr Reid, who is based at his Firm’s Cupar office. “Often the situation is presented as a problem that only the mobile operators can solve but even when owners feel they have little bargaining power, there is usually more than one course available.

“Reviewing the existing agreement terms often shows the operator cannot implement their proposals without the owner’s consent. We have helped many property owners in such circumstances reach an amicable settlement with their much larger tenants where, in some cases, rents have been increased and other terms improved in the owner’s favour. I urge anyone in a similar position to seek professional advice to ensure they don’t give concessions unnecessarily."

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