14 September 2001

A SITE TO PLEASE

THE BANK

Mobile phone company

wanting to upgrade its

mast on your land?

Think before you sign,

explained Andrew Holt

to David Cousins

MARVELLOUS things, these telecoms masts. You get several thousand £s a year in rent and have to do precisely nothing in return. Well, actually, you do have to do something, and thats stay alert. Because there will be further opportunities in this fast-moving market and only those on the ball will benefit.

That, at least, is the bullish view of Andrew Holt, head of Fisher Germans telecoms department at Market Harborough. He points out that the firm negotiated 300 mobile phone mast contracts on behalf of farmers in the six months from January to June 2001 and the number is steadily rising as phone companies gear up for new-generation 3G mobiles.

Here are some typical queries he gets from farmers – and some answers:

&#42 Ive had an approach from a phone company. Should I deal with them myself?

You can, but bear in mind that this is a highly technical area with a good number of potential legal pitfalls, so theres a high chance youll end up with a lower rent and worse terms and conditions than you would have done otherwise. "We do suggest that people seek expert advice," says Mr Holt. "Also, check the person you take on has a lot of experience of telecoms. Remember too, that the cost of all specialist advice is paid for by the phone companies themselves."

&#42 Ive had a mast on the edge of one of my fields for three years and am getting £3500/year. Should I be happy with that?

It depends where you are. The level of rental varies between operators and depends on how near the mast is to centres of population, motorways, railway lines etc – and how much they need your particular site. Theres also a bit of a north-south divide, with prices in the south of England typically £500-£1000/year more than in the north of England and Wales.

A year ago the average 15m tower fetched £3000/year, now its nearer £4000, so your £3500 isnt too bad at all.

&#42 I gather that the phone companies are having increasing problems getting planning permission for their masts. Does that mean mine may not happen?

Planners are getting tougher on masts, chiefly when theyre near to built-up areas. For a start, theyre increasingly insisting that different operators share the same mast or disguise their masts as trees, flagpoles or even chimney pots.

Though masts of 15m or less do not need full planning permission, the planning authorities are increasingly likely to insist that controversial ones go for full planning consent. Also the amount of time that the local authority has to make an objection to a proposed mast has been extended from 42 days to 56.

On top of all that, any proposal for a mast in a built-up area is likely to prompt strong local reaction. Mr Holt says Fisher German is finding that 25% of potential sites are failing to gain planning permission, compared to 10% a year ago. Most go through smoothly, but landowners, operators and planners are having to work together to site them in coppices or else screen them with trees (paid for by the phone companies).

&#42 Ive had a letter asking if I will agree to a mast on my land. Should I just sign the contract and send it back?

Absolutely not. The phone operators will generally pitch in with a relatively low offer, say £3000, which can easily be negotiated upwards. Equally, dont hold out for an unrealistic figure like £10,000 – the operator usually has two or three sites theyre considering and will simply go elsewhere.

They will also invariably propose a 20-year contract, but you should be looking for something nearer to 10 years. Its also important to contract out of clauses 24 to 28 of the 1954 Landlord and Tenant Act, otherwise youll have given the phone company full tenants rights.

Similarly, phone companies will suggest that rent increases are tied to the rate of inflation and reviewed every five years. Instead, you need to push for rentals tied to open market value or the retail price index and reviewed every three years.

&#42 One of the phone companies wants to put a mobile phone antenna on a pylon on my land. Do I have to share the rent with National Grid?

Fraid so. Typically half the rent will go to National Grid or Gridcom (its mast subsidiary). So you can probably expect £2000-£2500 in return for them putting a cabin on your land.

&#42 I keep hearing that the new 3G technology will mean that many masts will have to be upgraded. Will that mean higher rents?

3G is the new mobile phone system that will replace the 2G and 2.5G ones we use at the moment. It will allow high-speed data transfer, giving scope for video and proper internet access via your mobile phone.

According to Mr Holt, 80% of existing UK towers are having to be upgraded with new antennae and bigger equipment cabins at the bottom. If you already have a mast on your land and are approached by a phone operator, its important to negotiate a new lease (if the site increases in size they will have to anyway).

3G doesnt mean a higher rental as such; however if the size of the site increases you may be able to negotiate an uplift. A standard site for a 2G mast is 10m x 10m; for a 3G mast it will be more like 15m x 15m.

"Typically the phone company will offer to pay you £500-£1000 extra a year and in return will want a bigger site and add to the equipment," he says. "Dont sign this without taking advice; its a good chance to review or update some of the other clauses as well."

3G users phones will have to work off three masts (rather than the current one needed by a 2G user) and transmission distance contracts as the number of users rises. Hence a need for new mast sites too, which could help farmers.

&#42 Ive had a letter from a company called Pinnacle who want to buy the land outright. Should I sign?

Not until youve thought things through. Pinnacle Towers is the biggest of a number of firms looking to buy sites. It has already bought up 700 UK masts and wants another 2000. Its plan is to then offer the existing mast (or build a new one) on a joint-share basis, with all five phone companies paying it a rent. The planners generally like it because it means fewer masts overall.

Typically, it will offer to buy the site for 12-15 times the annual rent, so a farmer with a £3000/year rent will receive a lump sum of £36,000.

That sounds attractive, but bear in mind that as planning laws for new masts toughen, there will be more and more site-sharing. Since each extra operator can add another 50% to the typical £3500/year rent, there is a possibility that site could be earning good money in a few years time on a rental basis.

Another obvious factor in the decision, adds Mr Holt, is your current level of rent. "If youve recently had an upgrade and the rent has gone up to £4000/year, the 12 or 15 multiplier will work in your favour. If are still getting a relatively low rent, you should try to upgrade first, then sell."

Be aware, too, that they may replace the 15m mast with a 35m one, so dont do it if the mast is just behind the farmhouse.

&#42 Im worried about the health aspects of having a tower on my land. Have scientists decided whether there is a problem or not?

It depends on which set of scientists you talk to. The recent Stewart report decided that there was no direct health risk; the anti-mast lobby says it shouldnt be ruled out.

The safest advice must be that if the proposed mast site is right next to houses, a school or old peoples home, you can expect a local campaign against it. Equally, a mast 15m from the farmhouse may not worry you or your family but may be of concern to future buyers, so perhaps thats best avoided.

The mast operator should have property damage insurance (typically £5m) and unlimited personal injury insurance, including death. Talk to your own insurer, too, to check whether any further insurance would be prudent.

For more details contact Andrew Holt, Fisher German, 01858-411229. You can also register a potential site on www.mobilephonetowers.com for free.

Fisher Germans Andrew Holt says there are still lots of opportunities for farms to gain from a mast.