The new Electronic Communications Code (ECC) has caused stagnation in the UK telecoms property market but there is still opportunity for landlords to generate revenue through the hosting of telecoms equipment, according to new research from Lambert Smith Hampton (LSH). As LSH reports in its first UK telecoms research piece Mobile Futures, the Code – which governs the relationship between telecoms operators and landlords – was brought in to support digital connectivity and speed up the roll-out of 5G infrastructure by making it easier for network operators to install communications equipment. But where rents were previously decided on an individual basis by private consensual agreements, the report argues that the new Code’s ‘no scheme’ valuation, which disregards the potential value of a site to an operator, has given network operators a golden opportunity to drive down site costs.  Since the Code came into force in 2017, rents have dropped in certain cases by up to 90%, according to Mobile Futures. As a result, an impasse has been created in the market, it says, with landowners disincentivised from engaging with operators, deals drying up and no discernible improvement in mobile connectivity, particularly in rural areas. LSH national head of telecoms Mark Walters commented: “Increasingly high demands for connectivity and capacity mean that masts and antennas now need to be considered more as essential utilities rather than simply a commercial opportunity for landowners.  Unfortunately, the new ECC has complicated rather than improved matters by imposing a pseudo-compulsory purchase form of valuation which has been abused by operators and, consequently, strongly resisted by landowners.” Far from accelerating the widespread roll-out of telecoms infrastructure, the Code has failed to deliver connectivity in areas of poor coverage and roll-out remains focused on large urban areas, Walters adds.   “5G is a cornerstone of the government’s digital strategy, promising to deliver a quantum leap in the speed and reliability of mobile connections, but questions remain over the ECC’s role in the realisation of this ambition.” While the full implications of the new ECC will only become clear once a larger body of case law has developed, higher rental values have remained possible in certain circumstances through consensual agreements for key sites, Walters points out. “Higher rents can also be achieved if a landowner provides the infrastructure or mast upon which equipment is to be installed – as the landowner is classified as a wholesale infrastructure provider, the new valuation methodology does not apply,” he said. “For landlords and operators generally, a more consensual approach is slowly emerging for new sites at least.  It is likely to take a further 12-18 months to allow a substantive body of case law to emerge and market values to settle to the point where normal service can be resumed.”