Public property the answer to mobile mast dilemma?

1 Sep 2003

The Office of Public Works’ (OPW) recent decision to consider locating mobile phone masts at its substantial property portfolio has significant implications for the mobile industry. The OPW has appointed Vilicom, a Dublin-based consultancy firm founded by former Esat Digifone staff in 1999, to advise it on renting out space on its properties to mobile operators.

With about 1,800 properties throughout the State owned and managed by the OPW, including government departments and heritage sites, the deal opens up a range of prime locations for companies wishing to install mobile phone masts.

“Mobile operators will warmly welcome this new strategy as there now seems to be a more co-ordinated and informed approach to the erection of mobile phone masts. The operators will also hope that the OPW will now gain a greater understanding of the their requirements,” says Darragh Stokes, managing partner of Hardiman Communications, a telecoms advisory firm. “However, the OPW may find that it is in a position to start charging higher individual rents,” he adds. Stokes estimates that a good site can generate between €12,000 and €50,000 per year, depending on the location. This could transform the OPW’s 1,800 properties into a potentially lucrative rental business.

Demand for the new State sites from mobile firms is hard to judge, as operators are reluctant to be drawn on how many masts they intend to build in the future. However, with Vodafone, O2 Ireland and new entrant Hutchison 3G Ireland planning to introduce 3G networks across the State by the end of this year, the OPW’s strategy looks sound.

3G enables mobile phone users to use a range of multimedia applications, including video streaming on their mobiles. These services require higher data transmission rates than existing voice services forcing firms to expand their networks and establish more base stations and mobile phone masts.

A spokesperson for Vodafone says that the OPW’s decision will help it meet the conditions of its 3G licence. “Vodafone welcomes the recognition by the State that fair and transparent opportunity should be made available to operators to locate on publicly-owned infrastructure. That a level-playing field is to become available to all players [mobile operators] and one, which hopefully will enable decisions to be made in a timely manner, is a positive step. This will assist in meeting the rollout conditions of our 3G licence,” she says.

It is thought the move might be especially attractive to Hutchison 3G Ireland, which is building its first network in Ireland. Hutchison 3G Ireland is believed to be seeking over 500 locations on elevated commercial or state-owned property to facilitate the rollout of its telecoms network. Hutchison 3G Ireland was unavailable for comment due, it says, to the sensitive negotiations taking place with Esat BT regarding the construction of its Irish 3G network.

The OPW’s new strategy will encompass a more harmonised approach to the erection of mobile phone masts and a move away from the previous case-by-case approach. It is believed this will make the planning process shorter and perhaps less rigorous, which could prove vitally important to Ireland’s 3G licence holders. CEO of Vilicom Colin Cunningham emphasises, however, that any mobile operator given a license to use State property will be required to ensure full compliance with planning regulations and guidelines on exposure limits from emissions.

Previously, the OPW struck a deal with O2 and the Gardaí in 1998. This deal gave O2 exclusive access to Garda masts throughout the State, helping it to build its national network. This deal is now believed to be under review by the OPW and some elements, including the amount that O2 pays for access to each site, is at present under arbitration.

An O2 spokesperson says that under the terms of this agreement, the firm spent about €12m developing and upgrading the Gardaí infrastructure, which was entirely owned by the State. Regarding possible rent increases, she adds: “I don’t think that anyone ever welcomes rental increases.”

Vodafone has consistently been opposed to the deal between O2 and the Gardaí and describes it as “absolutely unfair”. “This is State infrastructure and we have been attempting for years to gain access to it,” a spokesperson claims. “It defies reason why such a deal was done exclusively. We are hopeful that we can come to a commercial arrangement that will enable access to these sites in the near future.”

When building its network, Meteor, Ireland’s third mobile operator often complained about the difficulty it experienced when attempting to establish new sites and the firm regularly calls for mobile mast-sharing arrangements. The OPW has now indicated that it will favour site sharing between all the mobile phone operators. Indeed, Ireland’s 3G licence holders eventually agreed to the idea of mast sharing when they began to build their 3G mobile networks late last year.

“We currently site-share on over 60pc of our network locations. However, it is not always possible to site share, as every network has a different footprint and there are many reasons why an operator may need to locate on a greenfield site,” a spokesperson for Vodafone explains. “Vodafone is, however, open to site sharing on any of the greenfield sites which it owns. However, it cannot offer site sharing when it is only a tenant – that is up to the landlord,” she adds.

Meanwhile, according to an O2 spokesperson: “O2’s policy is to locate its antennas on existing structures or to co-locate with other operators on existing infrastructure.” Of O2’s 1,400 mobile sites throughout Ireland, over 70pc of its GSM network is located on third-party infrastructure.

While the OPW’s new plan will boost public finances, it is almost certain to prove controversial among local communities. Mobile phone masts have proved very political and contentious over the past few years and have often been the target of protests and even vandalism or sabotage by individuals and community groups who say that the radiation they emit, although monitored by the Commission for Communications Regulation (ComReg) every two to three years, is dangerous. Just two weeks ago, more than €100k worth of damage was done when a new O2 mobile phone mast was knocked down in Kerry.

It is understood, however, that certain sites will not be affected by the strategy such as schools or hospitals as they do not come under the remit of the OPW and, according to the OPW commissioner David Byers, “there are no plans by Government to install equipment on those sites”.

According to a spokesperson in O2, Ireland has the most advanced programme of network monitoring in Europe. “Through ComReg’s online service, mobile sites in Ireland are independently monitored and measured for compliance with international World Health Organisation standards. Customers can also go online to locate their nearest base station,” she says.

Vodafone admits that the Government’s plans to use its portfolio as sites for mobile masts could “potentially’ prove controversial. “However, we do believe that people are primarily more concerned with having strong mobile coverage in their areas. This is important for personal, business and leisure users,” the spokesperson explains. “Communities are recognising that poor coverage in an area, due to lack of infrastructure, can prove economically damaging and may encourage businesses to locate elsewhere,” she adds.

Over the coming months, time will tell if the OPW’s decision will help accelerate 3G in Ireland as the deadline of 1 January 2004, set by ComReg for 3G licence holders to launch services, is fast approaching.

By Lisa Deeney