Rural landowners stand to lose almost £100 million in income as mobile phone companies begin a push to decommission more than 13,000 masts.
Over the past decade landowners and farmers have enjoyed a cash bonanza from renting out space on their land for masts to companies such as Vodafone, Orange and O2. The average income generated from a mast rose 8.4 per cent this year to £7,335 per mast, up from £4,400 in 2003 — making it a lucrative sideline for many landowners.
But as mobile companies seek to cut costs by streamlining their businesses, they have embarked on a programme to dismantle the structures. Orange and T-Mobile expect a planned merger, announced last month, to trigger the decommissioning of 8,000 masts, while a deal between 3 and T-Mobile should do away with 5,000 masts over the next decade. Vodafone and O2 have teamed up to pool their 24,000 masts, with several thousand expected to go.
In its annual Estate Benchmarking Survey, Savills, the upmarket property consultancy, highlighted the sharp reversal in the trend, warning that recent moves by "service providers amalgamating and consolidating aerials is likely to see pressure on this income source in the next 12 months".
Agricultural experts have expressed concern about the potential blow to landowners. Mike Verdin, founder of Agrimoney.com, an agricultural investment website, said: "For many farmers it will amount to an awful lot of their profit for a year — providing on that area of land far more than they would get from farming it. If it stops going up, that is going to make a big difference to the comfort they can expect to live in."
As demand for mobile phones boomed, Britain’s mobile companies fought to erect their masts on the best sites, sending teams out to scour the countryside. The erection of tens of thousands of masts enabled them to take full advantage of their "3G" or fast broadband licences on which they splashed out £22.5 billion in a frenzied government auction in 2001.
While their construction angered environmental campaigners, who lobbied against having the countryside dotted with ugly masts and questioned their safety, farmers and estate owners were delighted to find their land in such demand. Property businesses were set up solely to advise landowners on how to negotiate the best deals with mobile phone companies.
David Pardoe, a director of Savills, said: "There were varying factors, but a landowner with a sought-after site, on a hill, for example, near an urban conurbation, could generate tens of thousands of pounds each year in rental income from having a mast on their land. It has been a useful market for them to exploit."
However, as the market for mobile phones has become saturated — the UK now has more mobile phones than people — and the recession has hit, mobile companies’ margins have come under pressure.
Pooling networks and eliminating excess masts has proved a winning way to cut costs. T-Mobile and 3, for example, aim to save £2 billion over the next decade by pooling their 3G mobile networks.
Vodafone and O2 they hope to save "hundreds of millions" by sharing their mobile masts. The UK has about 52,000 mobile phone masts, including equipment on urban buildings as well as standalone rural poles.
Rural landowners are not the only group to have benefited from the masts. Last year masts erected at schools, libraries and leisure centres across Yorkshire generated nearly £1 million in revenue for local councils. A 2007 survey found that Birmingham City Council earned £590,000 from masts. Five other councils amassed more than £100,000 a year.
In early 2000, several high-profile legal cases were brought against mobile phone companies challenging the citing of masts on health grounds.
