Lease or Licence? Clarifying the Legal Status of Telecoms Agreements

The Court of Appeal has recently clarified a long-standing legal question in the telecommunications sector: do telecoms site agreements create tenancies or merely licences? In AP Wireless II (UK) Ltd v On Tower (UK) Ltd [2025] EWCA Civ 971, the Court confirmed that agreements with an uncertain duration do not create valid tenancies—an important ruling with far-reaching implications for both operators and landowners.

Background

The dispute involved a 1997 agreement for the installation of a telecoms mast on farmland in Cheshire. The agreement provided for an initial 10-year term, after which either party could terminate it with 12 months’ notice.

The landowner, AP Wireless, argued that the arrangement created a tenancy protected under the Landlord and Tenant Act 1954, which would entitle them to higher rents and statutory protections. In contrast, the operator, On Tower, maintained that the agreement constituted a contractual licence governed by the more favourable Electronic Communications Code (ECC).

Key Issues Considered

The Court was asked to determine:

  • Whether the agreement created a tenancy with a certain term,
  • Whether a periodic tenancy should be inferred,
  • Whether the agreement should be treated as a contractual licence.

The Court’s Decision

  1. No valid tenancy:

The Court held that the term of the agreement was uncertain due to the open-ended termination provision. Since a tenancy must have a certain maximum duration from the outset, the agreement could not qualify as a valid tenancy.

  1. No periodic tenancy:

Although the operator paid rent and had exclusive possession, the Court rejected the inference of a periodic tenancy. The express terms of the agreement contradicted any such implication.

  1. Contractual licence:

Applying an objective analysis, the Court concluded that the parties’ intention and the substance of the agreement aligned more closely with a contractual licence.

Implications for the Telecoms Sector

The Court’s ruling is likely to encourage telecoms operators to pursue renewals under the ECC, which typically results in:

  • Lower rents than those payable under the 1954 Act,
  • Longer notice periods (18 months under the ECC versus as little as 6 months under the 1954 Act),
  • Stronger statutory protections for continued occupation.

For site providers, this decision weakens their negotiating leverage—especially where agreements are not clearly structured as tenancies.

Next Steps for Landowners

Landowners should proactively review their existing telecoms agreements. Where the term is uncertain, the agreement is now likely to be treated as a licence, not a tenancy. This will affect both renewal strategy and rent expectations.

This Court of Appeal decision reinforces the importance of careful drafting in telecoms site agreements. While rooted in established legal doctrine, it provides welcome clarity and is likely to influence how such agreements are structured, interpreted, and renewed going forward.

How KTS Legal Can Help

At KTS Legal, we regularly advise landowners, telecoms operators, and commercial landlords on the drafting, renewal, and termination of telecommunications site agreements. This includes complex questions around whether an agreement constitutes a tenancy or a licence and the strategic implications under the Electronic Communications Code and the Landlord and Tenant Act 1954.

We can assist with:

  • Reviewing existing site agreements to determine their legal status and potential vulnerabilities.
  • Drafting and negotiating new agreements to ensure clarity of terms and compliance with evolving legal standards.
  • Advising on renewals and rent negotiations, particularly where ECC or 1954 Act rights are engaged.
  • Responding to termination notices and advising on enforcement or resistance strategies.
  • Litigating or resolving disputes arising from site access, removal of equipment, or disagreement over renewal terms.
  • Whether you are a landowner seeking to protect your property interests or an operator managing network infrastructure, our team can provide clear, commercial advice tailored to your objectives.