Is Canada Ready For Neutral Host Cell Towers...yet?


Monday, January 04, 2010

While it is common practice in the United States, third party tower ownership has not become a significant part of the Canadian telecommunications landscape. There have been many attempts over the years and a handful of existing neutral host towers but nothing that we can say there is such a marketplace in Canada.

The primary reason for this lack of marketplace has been largely due to the incumbent carriers and their focus on owning and operating their networks. In the United States, the carrier is not nearly as endeared to their tower assets, focusing on brand and marketing. This has enabled multiple neutral host tower operators to thrive with tower assets outnumbering the entire number of towers in the Canada. American Tower, for example now rests on an estimated 25,000 towers!

Does the introduction on new competition into the wireless industry change anything?

It only does where thinking changes and the timing could be right but the incumbent carriers will still hold sway on whether or not a marketplace is created for neutral host towers. That is because 3 new entrants on a tower is not the best covenant to have for such a capital intensive investment.

The next big factor could become municipal concurrence. As municipalities struggle to regulate wireless towers (out of their jurisdiction) the best leg for them to stand on is to have carriers aggregate their sites to a single location. This could have the effect of making carriers 'network neutral\' in some areas and thus making the tower asset less valuable in the competitive landscape.

In summary, I think there will be a push by U.S. based third party tower companies over the next few years to establish a marketplace in Canada. Their success, though, may still have the same obstacles as it has had for the past 15 years.