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The very aggressive practices of a new telecom player threaten to deprive subscribers of a mobile connection

The very aggressive practices of a new telecom player threaten to deprive subscribers of a mobile connection
Written by madishthestylebar

The very aggressive practices of a new telecom player threaten to deprive subscribers of a mobile connection

When real estate comes to impact the mobile network. In a town in the Eure, questions of lease and purchase of land are worrying about mobile coverage.

Too high a rent and the whole network could leave. This is the current fear of the municipal council of Saint-Christophe-sur-Condé, in Eure, after having received a visit from a representative of the Valocîme company.

The company, through this speaker, offers a great deal to the municipality by indicating its desire to become the new tenant of the land on which the village telephone antenna is located. All this while paying a much higher rent to the municipality, enough to make him earn money. However, the offer appeared “too good to be true” to municipal councilors, who fear for the quality of the mobile network.

The risk of seeing a telephone tower dismantled

Indeed, in the context of the land occupied by a mobile telephony tower, three actors are concerned: the owner of the land, the owner of the tower (generally a company dedicated to the management of this type of asset) and finally the antennas which may belong to Orange, Free, SFR or Bouygues Telecom.

In this specific case, it is Cellnex which owns the pylon and the fact that Valocîmes is interested in this land is perhaps no coincidence. In 2021, the company has indeed set itself the objective of becoming the third broadcaster of major television channels by shaking up the TDF-Towercast duopoly. He now seems to want to tread on Cellnex’s toes.

Its methods are quite simple and have been criticized by telecom players. The company approaches the owner of the land, shortly before the expiry of the lease, offering a rent generally 30% more expensive. Why such a price increase? Quite simply to be able to sublet the owner of the pylon at a higher price or even offer to buy back the installation at a bargain price. In this specific situation, if Cellnex cannot line up, it will then have to dismantle its pylon and leave the field. An approach that would have a drastic effect on the surroundings: the disappearance of the mobile network.

Several actors call for vigilance

The Eure prefecture has already warned the mayors of the entire department to tell them that “in the facts, [les changements de locataires] result in the removal of the pylon and equipment by the operator, with the disappearance of mobile coverage”. It is indeed implausible that Cellnex or any other owner of these infrastructures will accept the conditions imposed by the company.

The Association of Mayors of France (AMF) also warned about this issue in October 2021: “the AMF calls on mayors to be vigilant when they are offered agreements to take over from leases concluded with mobile telephone operators for the installation of pylons. Indeed, the new rents offered to them appear attractive but may lead operators to refuse them and leave the site. This situation, already reported to the AMF, may lead the municipality to lose all network and, moreover, to pay penalties. Even the French Telecoms Federation called at the end of last year to “securing telecom leases” in the face of what she describes as “land speculation“.

A “very aggressive strategy” assumed

Frédéric Zimmer, the president of Valocîmes launched 4 years ago, explains for his part to be in the nails, his company being a TowerCo. He even indicates that his company is quite unique in being “the only one in France and in Europe to be a low cost TowerCo“. Its strategy is clear: the idea is not to acquire leases or sublet, but to force companies already established to “resell for €100,000” pylons already installed. Frédéric Zimmer explains that in the case “unlikely” where the companies would choose to dismantle its installation, Valocîme undertakes to “rebuild a pylon in the same place”, for a lower cost, ie €100,000.

Originally, it was generally operators who built pylons. Over the past 4 or 5 years, to develop 5G technology, these operators have had to invest billions. To quickly recover cash, they decided to massively sell their pylons to a few companies, the famous TowerCo. Normally, a pylon is worth around €100,000. There, the operators decided to resell them to TowerCo for around €500,000 (in their logic of quickly recovering a very large sum of money, Ed). In return, the operators who are installed with their antennas at the top of the pylons have agreed to pay TowerCo much higher rents. Around €20,000 per year for 25 or 30 years, to put it simply. And it is an extremely profitable market.” explains the boss of the company.

According to him, the rents collected by companies like Cellnex are excessive: on “the total value of a pylon, the TowerCo receive 70% of the profits“, with the remaining 30% going to the operator and the owner of the land. The cause being, still according to him, the low rents charged by the owners.

Frédéric Zimmer thus claims to have created a “new model” of TowerCo and wants to create competition by becoming the new tenant. A case deemed “perfectly profitable”, since Valocîme intends to buy the pylons for five times less than what the large companies that own the pylons have paid. The company has already signed 1,600 agreements for leases or lease reservations in France.

Source: The Awakening of Pont-Audemer

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