Will Your Cell Tower Be Needed In The Future?
Are you wondering how long you will receive rent from your cell tower? When will the industry no longer need cell towers (due to a replacement technology)? It’s a lot like looking into a crystal ball. No one can predict the future however here are four things worth considering.
1. Prior To The 1980’s, Cell Towers Didn’t Really Exist
The first cell phone was invented in 1973. What we know of today as the small less expensive cell phone used by the general population didn’t really come into use until the mid 1980s. The majority of the cell tower network that we all see when driving down the road wasn’t actually constructed until the 1990’s or later. So, the rent that you are receiving from your cell tower, is payment for from a unique land or building use that didn’t really exist 30 years ago.
2. Satellites As A Replacement Technology Is A Long Shot (But Elon Musk Could Do It)
The thought was once that terrestrial based cell towers would likely never be replaced with satellite technology due to high costs and the need to access the satellites for upgrades. It simply costs too much to deliver hundreds of satellites into space via rockets, and then there is the problem with servicing broken satellites or upgrading the satellites with the quick advancement of technology.
The Wall Street Journal reported that Elon Musk is discussing with industry executives the idea of launching 700 internet satellites into space. While Elon’s project would cost an estimated $1 billion and would be 10 times larger than any satellite fleet in existence, if anyone can do it – it’s Elon Musk. Yes, his focus is solely on the internet at this time, however if anyone can disrupt an industry such as telecommunications it’s Elon (think Tesla, SpaceX, Paypal, etc.).
What does this have to do with your cell tower? Technology is rapidly evolving and while it is unlikely satellite technology would replace cell towers, it is not without the realm of possibility in the future.
3. Direct-To-Direct Cellular Communications Is A Possibility
The technology giant Qualcomm has been working on LTE direct technology which may offer a window into our future. LTE Direct is a device-to-device technology that does not use cell towers. Your device would discover thousands of other devices and services within 500 meters of your proximity. This would be useful, for example, to find your friend or a sale in a nearby store that may interest you. At this time, it is not a replacement technology for voice and data traffic, but if anyone can phase out the cell tower it’s the multi-billion dollar giant Qualcomm.
4. Industry Consolidation Will Continue
In recent years, AT&T purchased Cricket, T-Mobile purchased Metro PCS, and Sprint purchased Nextel. With each of these acquisitions cell towers were decommissioned due to overlap. Industry consolidations are not yet over and will continue as carriers strengthen financially and other carriers become prime business opportunities for acquisition.
Are you unsure of what the future holds for your cell tower? Give us a call and we will be happy to discuss with you what we are seeing on the market.
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*** The blog post above is offered strictly as an opinion***