Many companies will entice the landlord with promises of revenue-sharing, equity deals, and free infrastructure improvements. The challenge, as in any emerging market, is to be able to identify the long-term, quality service providers from the latest hot CLEC that is trying to buy market share in the region. Compounding the issue is that many of the larger property portfolio owners have signed national agreements with telecommunications service providers, agreements that are often at odds with locally forged relationships between building manager and vendor. Technology trends are probably the most difficult to predict since the market focus can change within a period of months. With over 500 nationally registered CLECs, it is inevitable that there will be a substantial consolidation of services providers over the next 12 to 18 months.
Consolidation can have an enormous impact on both tenants and property owners.
We believe that the overall telecommunications services industry will become even more commoditized, driving prices lower, but adversely impacting service and customer satisfaction. On the premise side, we see less lucrative deals for landlords and a change in the power base from the building owner to the service provider.