Why the farmers and phone companies may cease to be friends
LONDON LETTER:For years, the erection of mobile phone masts provoked fury in the UK. Now thousands of them are about to come down, writes MARK HENNESSY
TENS OF thousands of mobile telephone masts are dotted around Britain’s green and pleasant land to supply the needs of mobile customers.
Everybody wants a good signal, but few want the masts.
An eyesore for many and a health risk for some, the masts have, however, been a valuable cash crop for farmers and landowners, offering a dependable income of up to £7,000 (€7,740) a year per mast, when little else of the farmer’s life can be depended upon.
The frenzy of mast erection reached its peak in the years after 2001 when mobile companies paid more than £22 billion (€24 billion) to the British government for 3G and broadband licences in the biggest auction of its type.
Specialist firms were set up to help farmers win the best deals, while the Country Land and Business Association weighed in to ensure the multibillion-pound telecom networks did not buy cheap.
Some locations were veritable gold mines, says David Pardoe of Savills estate agents, with a mast on a hill near a major town being worth “tens of thousands” to the landowner.
However, the Klondike days of the early part of the decade are gone. Sales of 3G handsets, which deliver high-speed internet access, have not been as successful as had been hoped, apart from Apple’s iPhone.
The UK now has more mobile phones than people, and the credit crisis and recession has hurt the telecoms companies’ bottom line, which explains the effort to shave £2 billion off costs over the next decade by pooling networks. It began with a sharing deal between T-Mobile and Hutchison 3G, and accelerated with the proposed merger of T-Mobile and Orange, while parallel arrangements have been announced by Vodafone and O2.
The Orange/T-Mobile merger announced last month will see 8,000 masts being decommissioned, while another 10,000 or more will disappear in coming years as the others start to share masts.
Of the 50,000-odd masts in the UK, almost one in two are on farmland, threatening farmers – often those with the best sites on mountains and hills near towns and cities – with losses that could run to £100 million a year, and more.
In Devon and Cornwall farmers can get £5,000 a year per mast: “In Sussex, one farmer has four of them in a line on his 100-acre farm, so the rent is a substantial part of his income,” said Tom Bodley Scott of estate agent Batcheller Thacker.
Mobile firms make good tenants, with the rent paid on time. “Farmers can make as much this way as they would from renting a cottage, and this is far less hassle than doing that where you can have all sorts of problems,” he said.
And the mast rents have been steadily increasing. In 2003 the average rent paid by mobile firms came to £4,400 a year, with this rising to £7,335 by last year, an 8 per cent rise on the year before.
Mobile firms are already attempting to secure better deals from farmers, threatening to remove masts unless rents are cut, though, so far, few have actually taken their equipment away.
Like their counterparts in Ireland, British farmers have been hit by falls in commodity prices for milk and cereals this year, though the fall in the value of sterling has softened the blow.
Some 2,000 farmers throughout the UK are quitting agriculture every year and the trend has rarely varied in recent years, says Tom Hind of the National Farmers’ Union.
So far, British farmers are being saved the worst of the pain because sterling’s weakness makes agricultural imports more expensive, thus leaving more of the home market for them.
“The situation is not as bad as it is elsewhere in the European Union for farmers, but things are not great in the rest of the economy so that has hurt farmers’ ability to diversify into other areas.
“The easiest way for them to make extra money, obviously, is for them to lease farm buildings as business units, but there isn’t too much of that going on at the moment,” says Hind.
Lawyers are likely to enjoy some rich pickings as phone companies attempt to quit rent deals, since, in many cases, they do not have the right to share masts under the terms of the original agreements.
But even as mobile firms seek to cull their mast numbers, concerns remain about the quality of coverage in rural areas, with the problem worsening as the data being transmitted becomes ever more complicated.
“Major technological developments are taking place. This is being done to save costs, but it wouldn’t surprise me if the mobile companies were coming back to knock on people’s doors in two years’ time to put masts up again,” says Bodley-Scott.