Market Trends of United Kingdom Telecom Towers Industry
5G Deployment Acts as a Major Catalyst for Growth in the Cell-tower Leasing Environment
- In the UK telecom towers market, the rapid expansion of 5G deployments is propelling growth in the cell-tower leasing industry. The rollout of 5G technology requires a denser network of cell sites compared to its predecessor, 4G, owing to the former’s higher frequency bands, which cover shorter distances and face easier obstructions. This factor drives a significant need for bolstering infrastructure, necessitating the construction of new towers and upgrades to the existing ones.
- To meet rising demands, mobile network operators (MNOs) are turning to independent tower companies for leasing agreements, moving away from the traditional model of building and managing their own sites. MNOs can swiftly expand their 5G networks by opting for leases, sidestepping significant upfront costs. Simultaneously, tower companies benefit from increased occupancy rates and longer contract durations. This mutually beneficial management is driving the expansion of the cell-tower leasing landscape.
- As 5G continues to roll out, MNOs are upgrading their sites with 5G-compatible equipment, leading to a heightened demand for leased tower space. The UK telecom towers market is increasingly turning to leasing to achieve widespread 5G coverage, particularly in urban and suburban areas, highlighting the significance of both existing and new towers.
- In May 2024, VMO2 and Accenture teamed up to pursue the private 5G market in the United Kingdom, initially focusing on construction, transportation and logistics, manufacturing, utilities, warehousing, and sports venues. The solutions leverage Accenture's Edge Orchestration Platform and will seamlessly integrate edge computing, data analytics, AI, and embedded cybersecurity.
- In September 2023, the UK government allocated GBP 88 million (USD 109 million) to 19 projects, showcasing the promise of open radio access networks (OpenRAN) in enhancing mobile services. The government's Department for Science, Innovation and Technology (DSIT) also announced that sporting venues and popular tourist destinations nationwide will pilot new mobile technologies backed by OpenRAN networks.
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The Rooftop Segment is Expected to Witness Significant Growth Opportunities
- The telecom towers market in the United Kingdom is witnessing robust growth, primarily driven by an increasing demand for rooftop installations. Due to challenges such as land constraints and community pushback against new ground-based tower constructions, rooftop installations have emerged as a compelling alternative. These installations enable mobile network operators (MNOs) to enhance network coverage and capacity while avoiding the lengthy approval processes of constructing new towers.
- Rooftop sites, strategically located in urban areas, allow MNOs to address the rising demand for high-speed data and improve connectivity, particularly in crowded regions. This need intensifies as the United Kingdom speeds up its 5G rollout, requiring a denser network of sites to ensure optimal coverage and performance. According to Ofcom, as of the end of Q4 2023, the United Kingdom had 4.82 million mobile broadband subscribers.
- Additionally, communities and local governments view rooftop installations as less intrusive, making them more acceptable. For MNOs, these installations offer a cost-effective advantage by utilizing pre-existing structures. This approach reduces capital expenditure and hastens the activation timeline for sites.
- The growing demand for rooftop installations is propelling the UK telecom towers market. These rooftop solutions provide scalability and also adeptly navigate the regulatory, environmental, and community hurdles associated with traditional tower construction.
- In March 2024, in a landmark deal poised to transform the Irish telecommunications landscape, Phoenix Tower International, a player in wireless communication infrastructure ownership and operations, signed an agreement to purchase Cellnex's Irish division. Cellnex's Irish division, previously recognized as Cignal Infrastructure, stands out as a key player in Ireland's telecommunications infrastructure landscape. The company boasts a substantial portfolio, encompassing around 1,500 tower sites, rooftop installations, and urban telecommunications assets, predominantly catering to the nation's leading MNOs.
- In November 2023, GLIL Infrastructure committed approximately GBP 360 million (USD 475.36 million) to acquire a minority stake in Cornerstone Telecommunications Infrastructure, recognized as a significant mobile towers entity in the United Kingdom. Virgin Media O2 has confirmed the sale of a 16.67% minority stake in its mobile tower joint venture, Cornerstone, to the United Kingdom-based infrastructure fund.
