In addition to purchasing towers and augmenting revenues on existing assets, Melody is also focused on the “built-to-suit” tower ecosystem in which Melody seeks to collaborate with wireless operators to deploy their networks and build assets while relieving them of the burden of raising investment capital. Key trends and attractive attributes for tower leasing and build-ups include:
- Long-term tenant leases with multiple renewal terms at the option of the tenant with built-in escalators
- Low historical annual churn given the mission-critical nature of towers
- Low ongoing capital requirements given the nature of the assets and the triple-net structure for many contracts (i.e. the tenant or lessee pays for most, if not all, of the property expenses)
- Barriers to entry include zoning restrictions, capital and time intensity to build meaningful
- Scale and a “first mover” advantage
- Substantial mobile data usage as bandwidth-intensive applications such as video and newer ones such as augmented and virtual reality consume more capacity than ever before and thus continuous maintenance and improvement of carrier’s networks
4 The information above is presented for illustrative purposes only to provide examples of the types of investments targeted by Melody. There is no guarantee that Melody will be able to make investments with all or any such characteristics.