Projected Growth for Wireless Services Bolsters Antenna Demand

Article excerpt

The competition between television broadcasters and wireless communication services is giving rise to a new sub-industry of tower companies. They are vying to tie together far-flung clusters of local transmission antennas into national webs that will bring next- generation technology to customers.

Stunning growth projections for wireless services are drawing big- name investors to this infant industry. With outside investment capital nurturing their national ambitions, these little-known tower companies have been transforming themselves over the last two years into integrated operators that can offer wireless carriers an array of services from finding new sites to tower building to leasing antenna space on underused radio towers.

"It came from nowhere," said Brian G. Coleman, a wireless communication analyst for BT Alex. Brown in San Francisco. Among the dominant players in the antenna business are American Tower Systems of Boston; Omni America Wireless of West Palm Beach, Fla.; Telecom Towers of Alexandria, Va., and Castle Tower and American Tower, both based in Houston. Demand for transmission towers and antennas is soaring. Driving the demand is the expected shift by the nation's 1,500 television stations to high-definition television and new federal regulations that allow a handful of wireless services to compete in a single market. So far, just 3 percent of telecommunications traffic is over the current wireless network, most of that cellular phone conversations. But that is expected to change. Already, some of the new wireless services, called personal communications services or PCS, are carrying not only phone chatter but Internet data and paging signals. The tower companies expect a near-term flurry of activity from broadcasters retrofitting or replacing their existing towers, so- called "candelabras" that can support a small cluster of television or radio antennas. A tall tower can be 2,000 feet and cost, on average, $3 million. Even more capital is needed to meet demand from wireless services, whose tiny 2.2 million subscriber base is supposed to increase to 54.3 million in a decade, according to Paul Kagan Associates, a media research firm in Carmel, Calif. That sort of consumer acceptance would require adding 80,000 PCS antennas to the 20,000 already built over the last 15 years for cellular customers. PCS antennas, at about $200,000 each, have a range of one to six miles and need to be only 200 feet in the air. By contrast, cellular antennas now are six to 12 miles apart. But the growing demand for antennas coincides with growing opposition to them for esthetic and health reasons. An increasing number of municipalities have been imposing moratoriums on tower construction, even though part of the Telecommunications Act of 1996 prohibits banning towers but does not address moratoriums. Tower companies are resorting to such costly "stealth" solutions as embedding antennas in clock towers, cemetery crosses and palm trees. Others are striking roof-top management deals, luring owners with the promise that every multistory building will become a revenue- producing cell site. Given the zoning hurdles, companies with existing towers are likely to prosper first. "Most wireless carriers would like to go out and lease 40 towers in a region rather than contacting 40 different landowners," Coleman said. …