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PCS, BILLBOARD COMPANIES PURSUING EACH OTHER FOR MUTUAL BENEFIT

NEW YORK-A happy marriage of convenience is taking place among billboard companies and wireless communications carriers looking for antenna sites.

“It’s something that just seems to be coming around the pike,” said James M. Marsh, an equities research analyst for Prudential Securities Inc., New York, who focuses on publicly traded outdoor advertising companies.

Of the 400,000 or so billboards in the country today, Marsh estimated that a third would be most useful to wireless carriers because they are sufficiently tall and strategically located.

“The whole PCS (personal communications services) network buildout business is icing on the cake for outdoor advertising companies,” Marsh said.

“It’s good for the PCS companies because they are capital constrained and need to roll out fast. They can rent instead of building their own, and they avoid local zoning agencies.”

Five years ago, wireless carriers weren’t all that receptive to using billboards for their transmission and reception devices, said Larry Alt, senior vice president of marketing for Whiteco Outdoor Advertising in Merrillville, Ind. “They looked at me with deer eyes … but now we’re seeing results,” he said.

Whiteco, Alt said, was the first outdoor sign company to geocode its system, developing a data base of its 13,000 billboards in 34 states using the Global Positioning System technology. This allows wireless carriers to overlay their own grids onto a sign company’s in order to identify potentially suitable billboard locations. Geocoding now is widespread.

Wireless carriers of all kinds, not just PCS players, use Whiteco’s billboards, among them: Southwestern Bell Mobility, Paging Network Inc. and Omnipoint Communications Inc. “We’re in negotiations now with at least a half-dozen others,” Alt said. “We’re still educating carriers because some of their site people formerly were in real estate and we have to tell them what they should be asking us.”

Like Marsh of Prudential, Alt said he doesn’t see billboards as primary buildout locations but rather as coverage fill-in opportunities. Unlike Marsh, however, Alt doesn’t regard leasing of billboard sites to wireless carriers as easy money for outdoor advertising companies.

Although wireless telecommunications providers typically maintain the equipment they attach to billboards, it is the outdoor advertiser’s responsibility to make sure zoning authorizations and land lease terms are in order. Sign companies also must maintain the billboard structure, access to it and its electrical power supply.

Depending on location and height of the billboard, PCS carriers in particular are willing to pay $5,000 to $10,000 per year, Marsh said. “The contracts typically are not exclusive, pay a small fee up front … with stipulated annual increases,” he said.

Monthly payments averaging $300 to $500 are the range members of the Outdoor Advertising Association of America have reported receiving from wireless carriers generally, according to Kippy Burns, vice president of communications for the organization, headquartered in Washington, D.C.

When all costs associated with site acquisition are taken into account, billboard leasing generally is a cheaper option even than rooftop rental, according to Richard Berliner, president of Berliner Communications Inc., Paramus, N.J. The company, which has agreements with about 90 billboard companies, acts as a matchmaker between those outdoor advertisers and wireless telecommunications carriers. Omnipoint is one of its biggest customers.

Of all the kinds of wireless companies looking for billboard placements, those that are likely to have the most difficulty use Code Division Multiple Access technology, according to Alt and Berliner. Time Division Multiple Access technology also is more problematic compared to Global System for Mobile communications, Berliner said. CDMA and TDMA require two or three boxes attached to a site, whereas GSM “is small and compact,” he said.

Besides personal communications services, Berliner sees a big opportunity in providing coverage fill-ins for cellular carriers and eventually to abet the deployment of wireless local loop services.

“Most of the largest outdoor companies in our association are pursuing this opportunity,” said Burns of the OAAA. “Ours and the wireless industry see a lot of synergy.”

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