Mobile network operator Vodafone UK has won a key court case against leasing firm AP Wireless (inc. the affiliated Icon Tower company). Some operators believe the firm could risk damaging their roll-out of 5G based mobile broadband technology, such as by pushing up their costs and threatening the viability of future deployments.
Mobile operators have historically tended to lease their land directly from landowners. But in recent years APW has been stepping in to buy mast leases from existing landowners and then attempting to charge mobile operators a premium to use the sites. APW has also won some tribunal cases that have raised the rentals for certain sites (example), which pleased landowners.
The above situation is unsurprising as many landowners have suffered a sharp decline in rental payments (i.e. for allowing telecoms infrastructure on their land) since the government updated their Electronic Communications Code (ECC) in 2017 to boost network expansion. This made it easier and cheaper for operators to access and build on both public and private land (here), but it’s taken several years to find a fair balance for rental payments (often achieved through tribunal rulings).
Last year the Telegraph (paywall) similarly reported on how APW’s sister company, Icon Tower, had been constructing brand new mobile masts, often close to its existing sites. “These new masts are not subject to rent protections owing to a loophole in the ECC regulations. Operators have accused the infrastructure group of attempting to force them on to these new masts when existing leases expire – a move they say will pave the way for sharp rent increases,” said the newspaper.
Mobile operators often complain that Icon Tower is planning to build many more sites in this way, which has them worried about the impact on their future network expansions and ability to meet targets for 5G coverage. On the flip side, APW claims that the entry of Icon Tower into the market will “lead to lower costs for mobile phone users by increasing competition” (very debatable) and complains that mobile operators are simply attempting to “shut out competition in the market for mobile telephone infrastructure and protect a monopolistic position.” Some might argue that APW’s approach isn’t much better.
Upper Tribunal Ruling
The above situation has spawned more than a few court cases over the past few years, one of which reflects a recent dispute in the Upper Tribunal (Lands Chamber) – between Vodafone and APW/Icon – that focused on the ECC’s termination provisions for a mast site in Steps Hill. Vodafone had been seeking to renew their lease on the site, but then Icon (the effective landowner) sought to terminate the operator’s existing Code agreement without renewal, which would have required Vodafone to remove their apparatus.
As the landowner, Icon attempted to terminate the agreement based on three of four specific grounds allowed under the ECC (i.e. breach, redevelopment and public benefit). A second similar case between the parties also occurred in the County Court for a site at Pound Hill, which concerned Vodafone’s request to renew its existing lease of the site under the Landlord and Tenant Act 1954.
According to a summary of the cases posted by Osborne Clarke, Icon’s grounds were as follows:
- Breach. Icon alleged Vodafone had substantially breached the alienation provisions in its existing Code agreement due to its relationship with Cornerstone, an established infrastructure provider and a competitor of Icon, with which Vodafone has a longstanding relationship;
- Redevelopment. Icon had recently constructed its own electronic communications mast near to Vodafone’s existing site. Icon argued this constituted redevelopment which could not reasonably be done without terminating Vodafone’s existing Code agreement; and
- Public benefit. Icon sought to prove that Vodafone’s site caused prejudice to Icon (in relation to the potential future operation of Icon’s new site) which was not outweighed by the public benefit of Vodafone’s existing site remaining in situ.
This marked the first time that the Upper Tribunal had considered the termination grounds under the Code and both courts ultimately ruled in Vodafone’s favour. The courts found that, firstly, the public benefit of Vodafone’s existing mast site (and its lower rents) outweighed any such prejudice to Icon, which in any case could potentially be settled by other means (e.g. financial compensation).
On redevelopment, the courts determined that a number of works do NOT qualify as relevant redevelopment works, including, for example, works that will not be done by or on behalf of the landowner (i.e. “site provider”), such that it is not that site provider who intends to do the works. In short, the court made it much harder for Icon to pursue this sort of approach.
The court also determined that mast / telecoms sites fall within the types of land where day-to-day human activity is not particularly relevant to the question of business occupation, and found there was no breach of the alienation provisions.
Overall, mobile operators are understood to be pleased with the decision and the Upper Tribunal’s strict interpretation of the Code termination grounds, with one industry source telling ISPreview this morning that it was an “important defeat for a cynical business model that’s focused on extracting money from – not improving coverage for – mobile networks.” But few expect this to be the end of APW’s efforts.