Will cell towers become obsolete or 5G make cell towers go away?
The wireless industry has been lobbying heavily to be able to pay next to nothing for leasing 5G sites in public right of ways. COVID-19 has significantly delayed the rollout of 5G in 2020. We should start to see to 5G the fifth generation of wireless networks being rolled out slowly as we reach 2021 and many people are wondering if 5G will make cell towers obsolete?
My short answer is yes, 5G technology has the potential to make some cell towers obsolete and it depends where they are located.
Will 5G make all cell towers obsolete?
- No 5G will not replace most cell towers, especially in rural areas. However in the suburbs and small cities, 5G small cells will work in conjunction with most existing macro cell sites.
The wireless industry estimates that in addition to the 330,000+ macro cell sites and cell towers that exist in the USA, another additional 250,000 to 1,000,000 new small 5G cell sites will need to be built to support the robust telecom networks.
You can see in many cities where fiber cables are installed in the ground, 5-gallon-paint bucket sized small cell antennas are popping up on top of 30-40 foot wooden electric transmission poles.
These small cells provide additional coverage and capacity to small areas such as shopping centers, intersections, centers of commerce, etc. Like the example of the location I videoed after stopping for gas in Fort Walton Beach Florida, the 5G small cells located on a busy 4-lane street will work in conjunction with existing 5G macro cell towers to improve service. I knew it was an SBA tower because I looked at it last year while answering a question for somebody who called us.
Will 5G cause some cell towers to be replaced?
- Absolutely Yes. 5G will replace many rooftop macro cell sites in major cities and in densely populated urban areas on those mature rooftop cell sites that are paying high rents, namely cell tower lease rates in excess of $5,000 and $6,000+ monthly in rent.
We believe that carriers may install several 5G small cell nodes near the macro cell tower or cell site to be able to force the landlord into accepting a significant rent reduction or render their site obsolete and decommission the existing macro cell site. Small cells and 5G pose a significant cash-flow risk for cell tower landlords who potentially may be getting their rent reduced if they want to keep their site.
Will cell towers go away because of 5G and small cells?
- Future obsolescence depends on your specific location. If you are in a rural area on not tied into fiber, they can’t provide true 5G service (100X faster speeds than 4G). Your new “5G Cell tower” will actually still transmit on the 4G network and 5G cell phones will also work on the old network. It will be interesting to see in 2029 when they roll our 6G if we were correct or not in our assessment.
What are the average 5G lease rates?
- 5G leases rates or small cell lease rates will vary, but as a general rule of thumb they are considerably less that traditional macro cell tower lease rental fees. Small cells can lease for between $150-$250 per year (thanks to fat cat wireless industry lobbyists) to about $150 to $500 per month with private landlord rooftop sites. While it may be not worth the hassle to lease a small cell at a single location for only $150 per month, it may be very worthwhile if you have a portfolio of properties you can offer for 5G rooftop leasing.