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SOUTHWEST PROPERTY NEWS

Wednesday November 20 2019

How the Electronic Communications Code Change the UK Telecoms Property Market




 How the Electronic Communications Code Change the UK Telecoms Property Market

The new Electronic Communications Code (ECC) has caused inactivity in the UK telecoms property market, but there is still an opportunity for landlords to generate revenue through the hosting of 5G infrastructure, according to new research from Lambert Smith Hampton (LSH)

As LSH reports in its first UK telecoms research piece Mobile Futures, the Code - which governs the relationship between telecoms operators and landlords - was heralded as an important step to support digital connectivity and speed up the roll-out of 5G infrastructure by making it easier for network operators to install communications equipment.

But where rents were previously decided on an individual basis by private consensual agreements, the report argues that the new Code’s ‘no scheme’ valuation, which disregards the potential value of a site to an operator, has given network operators a golden opportunity to drive down site costs.  Since the Code came into force in 2017, rents have dropped in certain cases by up to 90%, according to Mobile Futures.

While the full implications of the new ECC will only become clear once a larger body of case law has developed, higher rental values have remained possible in certain circumstances through consensual agreements for key sites.

Research also shows the new Code has had a dramatic impact on the relationship between telecoms operators and the landlords who host their equipment. All the signs are that the balance of power has been shifted firmly in favour of the operators.

Far from accelerating the widespread roll-out of telecoms infrastructure, the Code has failed to deliver connectivity in areas of poor coverage, and roll-out remains focused on large urban areas, Mark Walters, Head of Telecoms at LSH commented,

“Increasingly high demands for connectivity and capacity mean that masts and antennas now need to be considered more as essential utilities rather than simply a commercial opportunity for landowners.  Unfortunately, the new ECC has complicated rather than improved matters by imposing a pseudo-compulsory purchase form of valuation which has been abused by operators and, consequently, strongly resisted by landowners.

“For landlords and operators generally, a more consensual approach is slowly emerging for new sites at least.  It is likely to take a further 12-18 months to allow a substantive body of case law to emerge and market values to settle to the point where normal service can be resumed.”

 To view LSH’s full report ‘Mobile Futures: What’s happening in the UK Property Telecoms Market’, click here.



"Increasingly high demands for connectivity and capacity mean that masts and antennas now need to be considered more as essential utilities."
Mark Walters, Head of Telecoms at LSH








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