Understanding Fiber Lease Rates

Internet speeds in Australia leave much to be desired. In fact, Australia currently ranks 50th in the world for average broadband speeds and 60th for “peak” speeds.

But it’s not all bad news: Australia’s peak internet speeds have increased by 11 percent and 6.4 percent over the last few years, and while broadband speeds still have a long way to go, Australia’s mobile networks consistently rank towards the top of the pack.

As a response to the public’s demand for faster internet, both the private and government sectors are going to great lengths to improve infrastructure.

fiber optic installation
Earlier this year, telecommunication company Telstra announced a $3 billion dollar plan for improving its network speeds over the next three years, pushing mobile download speeds to nearly 1 Gbps, and upload speeds close to 150 Mbps.

Additionally, state-run organizations such as the National Broadband Network (NBN) have issued plans to provide all Australian citizens with affordable broadband connectivity, featuring speeds up to 100 Mbps.

These improvements to the infrastructure present property owners across the country with an interesting opportunity: in order to expand internet connectivity across Australia, new fiber optic cables will have to be installed and routed across specific acres of land—land already owned by someone else.

This means that the developer will need to obtain an easement on the property in order to have the “right” to install these new fiber optic lines, which could end up being very valuable to the landowner.

To help property owners understand what a fiber optic lease entails, this article will discuss everything there is to know about fiber optic leases, including their value to property owners, and how LDC Infrastructure can help turn a long-term fiber optic lease into a large, lump-sum cash payment.

What is a Fiber Optic Lease?

A fiber optic lease is essentially a land easement in which landowners grant developers the right to run fiber optic cabling through their property.

This easement may also be used for the placement of other equipment used to “light” the fiber optic cables, and in some cases, an entire structure will either need to be constructed or converted to become a “carrier hotel” where data servers and other computing hardware can be stored.

In return, the landowner will receive monthly rental payments from the developer.

How do I Obtain a Fiber Optic Lease?

Obtaining a fiber optic lease is not an easy process; in fact, it’s quite difficult for a landowner to obtain a fiber optic lease on their property as there will likely be a wide variety of options for the developer to pursue that do not involve a new land easement.

When a developer is looking to break ground and lay new fiber optic cables, they will first examine the existing infrastructure to see where additional cables can be installed.

In most cases, this infrastructure (i.e., fiber optic connectors, electrical conduits, transmission equipment, etc.) will already be part of an existing easement, meaning that no new lease agreements will be needed.

If the developer fails to find existing avenues for installation, then they will then need to contact the landowner directly about the possibility of forming a new fiber optic lease agreement.

How much is a Fiber Optic Lease Worth?

Depending on how vital the new fiber optic cables are to the network, the rental fees developers pay to landowners can vary greatly.

For some landowners, rental payments from a fiber optic lease can pay upwards of a hundred thousand dollars per year, whereas other agreements may be significantly lower.

The value of a fiber optic lease is almost always determined by the location of the property and whether or not the developer has any viable alternatives for installation. If there are no other options in the area, then the property owner is likely to get a higher value for their land.

fiber lease
If the property is in a location where it makes financial sense for the developers to route the fiber optic cables, and the property is in close proximity to important data centers, it is likely that the landowner will receive a more valuable fiber optic lease agreement.

However, it is highly likely that there will be an alternative solution, or some cases, several local landowners offering competition, which will ultimately drive the value of a fiber optic lease down.

Understanding the Lease

Before entering into a lease agreement with a developer, it’s important that the landowner understand what kinds of rights the lease grants the developer.

Typically, by signing an easement, the developer will also retain the right to perform certain kinds of maintenance in order to ensure the integrity of the new network.

This maintenance could entail actions such as digging up your backyard in order to make repairs, or even laying an entirely new fiber optic installation, which may or may not be preceded by a warning notice. After repairs are complete, the developer will ensure that the condition of the property is restored, but it’s important for you to understand the fine print as there’s a great deal of variability in how this part of the lease gets structured.

Other kinds of maintenance you may need to offer potential developers could involve technicians entering your property to ensure that equipment used for data servers or to light fiber optic cables are working at full capacity. In most cases, this means that technicians from the internet company will need 24/7 access to your property.

This sort of dynamic could pose a serious inconvenience to the landowner, especially if the backyard was intended to be the site of a family event or if the landowner is uncomfortable with strangers entering their estate while they’re away or sleeping at night.

Thus, before signing the lease agreement, it’s important that you read the lease carefully or hire a professional advisor to help you go over the fine the print.

How LDC Infrastructure can Help

If you are currently receiving rental payments for a fiber optic easement, LDC Infrastructure may be able to offer you a large, lump sum payment in the form of a fiber optic lease buyout.

Instead of receiving incremental payments over the length of the lease, LDC Infrastructure can offer you a fair value for the entire value of your lease today. These funds can be greatly beneficial to landowners looking to pay off debt, invest in a new business venture, or even retire early.

This sort of lease buyout also offers landowners some peace of mind, as most ground leases are typically structured in such a way that allows them to be terminated at any time.

This means that if you’re a property owner who has become dependent on monthly rental fees from a fiber optics easement, you could potentially be putting yourself at great financial risk if the internet service provider were to suddenly end the agreement.

Contact Us Today

Even if you don’t wish to sell your fiber optic lease, wouldn’t you still like to know the true value of your fiber optics lease? If you site meets certain criteria, we can offer you no obligation, free-of-charge valuation of your property.

Call us today at 1300 149 499, or click here to submit your information online so that we may contact you.