Editor’s Note: An anonymous contractor argues that the tower contracting industry, once thriving, is now in a critical decline due to unsustainable pricing models, increasing bureaucratic demands, inflated compliance costs, and unfair client practices. While once a profitable and competitive sector, contractors now face shrinking margins driven by unit pricing mandates and delayed payments, compounded by rising costs of safety certifications, inflation, and labor retention. The letter laments the erosion of contractor autonomy and sustainability, highlighting how carriers and turf vendors exploit contractors’ lack of leverage, ultimately threatening the workforce that builds and maintains essential wireless networks. The writer calls for collective action to address these systemic issues and restore the industry’s health and fairness. Promoting this letter on social media is important for continued dialogue and informing clients of the industry’s perilous situation — one that they’ve created. One that they can fix.
To the Editor:
Is the industry of contractors who build towers and upgrade and maintain wireless networks dying? In the opinion of this contractor and others we have spoken with, the answer is yes, and unless something changes very shortly, the support infrastructure for all wireless carriers, tower owners, and smaller operators will not have the support it needs as networks mature.
The heyday of tower contractors was the late 80s, 90s, and 2000s. Cellular A & B 824-896mhz license networks were being built out. Lots of variety in the type of site builds, but it was not uncommon to build long new access roads, to erect tall self-support towers or monopoles with deep caissons or a big mat spread foundations, to set ~70,000lb prefabricated concrete shelters on perimeter beam foundations that crews built, and to sometimes install generators and propane tanks on corresponding installed pads, to install and test grounds rings and lay tons of fabric and top rock in large fenced compounds.
The FCC then released four new 1800-1900mhz PCS licenses per market, and contractors were in even greater demand for work. The entire industry was thriving; carriers were making money, quickly getting their sites on air, and recouping construction costs through substantial daily revenue.
The free market was working well, as carriers and their management companies were all awarded work by a competitive bid process of pre-qualified contractors.
A tower contractor had a very limited potential customer base, given there were only so many carriers, tower owners, management companies, and various small telecommunication company potential clients to work for. Still, it worked well, and they could control their size and growth by how much work they pursued and won in competitive bids and if they wanted to expand geographically.
There were exceptions, as there was a short time in the 2000s when a carrier conducted reverse auctions. You would go bid walk a site, work up your bid, and then they would have an online reverse auction.
Early on, you would see a starting price above your bid. You would bid downward until you won or could not go any lower. Later on, as online auctions continued, sometimes the starting prices were lower than your absolute bottom, and you would wonder if bidders were naïve to their costs or desperate to keep workers busy. Some days, we would watch these online auction prices go down below the actual hard costs of everything needed to do the project! There were even rumors that the carrier’s employees were participating in the bid process by bidding against those participating! That was never confirmed, but the reverse auctions eventually stopped after little success, and contractors did not embrace the process.
A significant shift occurred in the 2000s when carriers laid off most of their employees (I was one), and they all landed at tower owners, development companies, big management companies, and those of us who started our own companies. The big management companies would offer to finance the wireless carriers’ network for a huge premium, to the benefit of carriers, by delaying their cash outlay until the management companies handed completed sites over to the carrier.
At some point in the late 2000s and early 2010s, we contractors started seeing the bombardment of matrixes and requests for unit pricing. This made no sense to us as no tower contractor goes out to a site and says, “Oh, that site will require 6 antennas and 180’-0” of cabling, and I know we do antennas at $xxx each, and that cable costs $x.xx per linear foot to install”.
No…contractors look at a site based upon tower type, routing, heights, ease, type, and other things and say something like “that entire job will take a three-man crew xx days to complete” OR “that task will take three crew members x hours to complete”. Contractors assess jobs based on site conditions and crew requirements, not standard units.
The unit pricing format also did not work for mobilization as a site four hours away with crew members on per diem would cost more to get to, more time to get back, and potentially more time each day to get to a mountaintop site than an in-town site. It also didn’t work when you were directed to work overtime.
When contractors brought this up, the direction always came back to use a blended rate that worked for all scenarios (which is impossible) as the rate that works for all scenarios is the rate that works for the worst-case scenario, which no company wants to accept.
Soon, these unit prices were no longer sent out where you were asked to work up your pricing. They were just sent out pre-populated. You’d then accept what you could and try to negotiate on the unacceptable and hopefully get close to what you need.
The next evolution was unit prices would just be sent to you by a current or potential client, and they were 30-40% (or more) LESS than they needed to be for a contractor to be healthy, and the message was “you have to accept it if you want to work for us”. We have even seen prices in recent months that were for one-half of a carrier’s national maintenance contract, which literally cannot be done by any contractor that is compliant with insurance and certifications and pays a competitive wage and benefits to quality employees.
I believe that most contractors were initially angry at Turf Vendors for the unit pricing they kept pushing down to contractors with no leverage other than to simply say no to the work offered, which most would not because of their need to keep their employees working.
Over time, I slowly changed my perspective that carriers are putting out their builds in a competitive bid to the Turf Vendors knowing they all will slash each other’s throats in order to win big contracts, and these Turf Vendors then adopt a mindset that if they win a big contract, that they can simply cut out their 35-40% margin they need, and know that enough unsavvy or desperate contractors will accept the mandated unit pricing. During the past 15 years, it has been a perfect storm of items that have made it nearly impossible to be a healthy and sustainable industry for tower contractors.
Below is a summary of the many items that were added to the contractors’ plate that increased internal costs, made jobs take longer, and have slowly eroded business health:
SAFETY:
The message in the industry always centers around how important tower contractors are and the safety of the industry and employees is paramount, but the pay to contractors keeps getting cut while the number of certifications for field employees has tripled and quadrupled. Each one of those certifications requires not only fees per each employee’s cert but also requires the employer to pay the employee for the time to take the cert MINUS the time the employee could be out in the field generating revenue.
Add to these requirements, clients have been implementing 3rd party tools (Compli & others) which also require the contractor to pay to demonstrate their compliance to the client! Oftentimes, when you have taken substantial time to be fully compliant on their platform, the client will call you and ask for documentation. You respond by saying that the items in question are uploaded in their platform and they will still ask you to submit it directly right then!
Why even have the platform and make contractors pay to use it? These are systems that the client should pay for as they are the ones mandating them, and the contractor has already had to accept unit pricing dictated to them with no recourse for these mandated costs or other site variables like travel distance to the site.
BUREAUCRACY:
Turf Vendors especially added more compliance, more certs, more meetings (sometimes daily hour-long calls), onsite safety review that would stop or slow site progress by hours each day, regular Quality Assurance calls with reviewers in other countries who were not industry trained, oftentimes difficult to communicate with, and at times would interject site standards that your local contacts never communicated, compliance mentioned below, and repetitive onboarding duplication between mandated platforms.
COMPLIANCE:
Some time ago, many clients implemented the onboarding and vendor approval process by platforms like Avetta. This can take up to 50 hours at annual renewal and many hours each month to stay compliant on. Then you find the actual client sends you a request for items that are in your Avetta approval and are now duplicated! Ironically, clients make the contractor PAY FOR the membership in Avetta, and the more clients you have attached, the more you must pay!
This was brilliant by carriers, tower owners, and turf vendors to not only make their contractor comply with what you require but to pay a membership for the express privilege of being qualified. These are systems that the client should pay for as they are the ones mandating them and the contractor has already had to accept unit pricing dictated to them with no recourse for these mandated costs or other site variables like travel distance to the site.
In addition, in just the past year, two major carriers and one Turf Vendor have initiated new annual comprehensive compliance initiatives that required anywhere from 10 to 80 hours each where tower contractors are asked to provide standards documents for their Diversity, Equity, and Inclusion initiatives, as well as high-level I.T. security protocols that did not even apply to tower contractors who simply receive materials and go out and build sites.
CLOSEOUTS:
The majority of Turf Vendors require crew compliance and attendance of virtual site audits (not to be confused with site safety audits) that will occur several times a week, if not daily, to monitor the progress of a build. In addition to this, there is usually a final call that takes place to audit the entire site, and you, as the contractor, are then given a punch list of items to correct.
You correct those items, submit them, and now you can take all your final photos to submit in your closeout; your closeout which has requirements that have increased in complexity massively and continue to increase to this day. Complexity aside, clients are now requiring formal submittal of closeouts much quicker than previously but it is almost always initially rejected, sometimes multiple times. These rejections require re-mobilizations of crews to correct “deficiencies” and take pictures; sometimes requiring the redelivery and rental of manlifts with no additional compensation.
In many cases, the “site acceptance or virtual acceptance” was completed, so you return your aerial equipment as to not incur additional cost, only to later have your closeout rejected for some arbitrary standard, and then have to re-incur rental charges.
TROUBLESHOOTING:
In the first 15 to 20 years of site builds, the contractor was just that… a contractor who would build a site or upgrade it, handing off the site to the carrier who would use a radio installer, a separate integration team, or their in-house technicians to bring the site on air. In recent years, the integration, turn-up, and troubleshooting of sites have been added to the contractor.
These additional responsibilities can often take days and sometimes weeks, and there is no additional “unit price” for ongoing crew labor or additional aerial lift costs on such troubleshooting.
DELAYED & DEDUCTED PAYMENT:
As time passes, these same clients have slowed payments via various means. Contract payment terms have moved from what once was net 30, to 45 being favorable, 60 being common, and recently I have seen net 90 offered by a television station. Combine this with the delay of closeouts, the additional troubleshooting, both of which massively increase costs, and the delay of closeout approval to submit final invoices, put a huge cash flow burden on the contractor to pay their employee payroll every two weeks with clients paying you 60 days after you manage to get your site approved.
Add in massive recent inflation, and you are borrowing against a credit line or an owner’s finances at 9-10%, further eroding the ability to make a sustainable income. To compound all of this, many clients have implemented a 3rd payment platform (Ariba, Paymode-X) that the contractor HAS TO pay either for a membership-based upon the volume they use the processor OR a flat fee of around 1.5% additional to process through the platform!!! These are systems that the client should pay for as they are the ones mandating them and the contractor has already had to accept unit pricing dictated to them with no recourse for these mandated costs or other site variables like travel distance to site.
INFLATION:
All of the above collide into a perfect storm as prices offered continue to be cut, while safety, compliance, and bureaucracy requirements have increased time to comply while also slowing project work. Combine this with the cost of trying to retain experienced field people and retain them against moving to other more steady work trades has risen exponentially, all the while the costs of employee benefits go up ~20% per year, workman’s compensation and insurance rates going up every year, fuel costs go up, fleet maintenance costs go up, and general inflation and bank interest rates have all been at recent decade highs.
This 20+ year company with field offices in multiple states has lost about $4.5m in the past two years. I spoke to another competitor last week who does greater volume who confirmed a similar loss over the same time period.
Last month, a competitor of ours had their Monday morning staff meeting, and when everyone showed up, the management told their crews to clean out their trucks, get their personal belongings, and turn in company assets, as they were closing THAT DAY with no notice to clients or employees!
I love this industry. I love our employees. This is not sustainable. The changes being made by the clients in our industry are killing contractors, pushing employees to other trades, and making contractors choose between inevitably going out of business or cutting costs in a field where safety is paramount and preached by all those cutting offered pricing! If this industry is unsustainable, then we contractors continuing without protest or change are only enabling an industry that is taking advantage of important resources that build, maintain, and upgrade the networks that almost every consumer uses on a regular basis!
With no leverage other than to say no, what is the answer for things to change other than my fellow tower contractors saying no when offered pricing doesn’t make sense? Is it a collective voice that negotiates on behalf of all the industry contractors? I don’t have the answers, but I do know that today’s tower business climate is not sustainable and the trajectory we are all on is only getting worse.
I have been a lifelong supporter of the free market and a merit system, as I believe companies should be successful via competition and individuals should be rewarded via merit. That being said, all of us tower contractors have no leverage nor any collective voice to stand behind ALL of us to get tower contractors and field workers properly paid and supported in a supercritical and safety-dependent environment. My 15-year-old self would marvel that I could even say this now, but our industry is broken.
For those interested in strategizing solutions, please share your thoughts at deathoftowercontracting@gmail.com. Also, you can send them to info@wirelessestimator.com. I hope we can all work toward a better future for tower and wireless contractors.
An anonymous long-term tower & wireless contractor
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