McDonald’s has signed an agreement with KGI to market its restaurants as sites for cell towers. The agreement covers 11,500 locations nationwide that are owned by the iconic fast food franchise.
“McDonald’s places its restaurants in strategic areas where people live, work and shop,” Mike Kampen, principal, KGI Wireless, told AGL Bulletin. “Those are pretty good criteria for siting cell towers, as well.”
As a result of the agreement, KGI Wireless has established KGI Towers, which will serve as McDonald’s only source for construction and development. McDonald’s had previously promoted itself to carriers as a cell site location, but without too much success.
“The difference here is we are marketing to all the carriers, not just a few. We will build the towers with enough capacity for three or four carriers, which means more revenue for McDonald’s,” Kampen said. “We are simplifying the model. We are probably easier to do business with because they are in the burger business and we are in the cellular business. We know who to call.”
KGI had previously focused on marketing existing towers for companies such as Charter Communications, Verizon Wireless, Mediacom and Time Warner Cable. Although KGI does manage wireless sites for Kum & Go convenience stores.
“This is a divergence from our norm,” Kampen said. “This is the first time KGI has gotten into the ownership side. Previously, we were on the real estate services side. This is an attempt to diversify our organization and provide another revenue opportunity for growth.
KGI currently has agreements to build at six McDonald’s sites. It will build two to three sites in 2011.
“We think it will grow in time as we get deals done with major carriers. We will develop a healthy pipeline and hopefully do a lot of deals over time,” Kampen said. “We recognize there is a need out there. When we got into this business 10 years ago, the search rings were 4 to 5 miles in radius, now a search ring might have a radius of a quarter mile down to a few city blocks. As carriers try to strengthen their networks to provide throughput to handle 4G, their real estate options are limited. This is another viable option.”