COMMENTARY – The wireless infrastructure industry is in a state of emergency. For decades, tower contractors have been the backbone of the wireless network, building, upgrading, and maintaining the towers that connect the nation. But today, that backbone is buckling under the weight of unsustainable pricing, increasing compliance costs, and exploitative practices. Large and small contractors are bleeding out, and if mobile carriers do not take immediate action, the entire industry could collapse.
This is not a new problem. For years, contractors have raised concerns about “take-it-or-leave-it” pricing models dictated by turf vendors, who are awarded contracts by carriers to manage wireless broadband projects. Desperate to win contracts, these turf vendors accept the carrier’s contract to manage their build and pass the burden onto contractors. At the same time, they still take an unconscionable margin off the top. The result? Contractors are forced to operate at a loss, jeopardizing their businesses, workforce, and safety practices.
One long-term contractor, who has lost $4.5 million over the past two years, succinctly described the situation: “I love this industry. I love our employees. This is not sustainable.” And he’s not alone. Companies across the sector are closing their doors, unable to survive in an environment where pricing doesn’t cover basic costs, let alone provide room for growth.
Carriers must face their role
Despite the long-standing nature of these issues, carriers have historically rebuffed trade association efforts to address them. In the past, a significant association initiated a campaign to highlight contractors’ concerns, particularly around unsustainable pricing. However, that effort was shut down under pressure from carriers, with one carrier representative even petitioning others to force the association to abandon its initiative. This rejection of dialogue and collaboration has only deepened the divide between carriers and the contractors they depend on.
However, ignoring these concerns is no longer an option. The system’s cracks are widening, and a collapse of the contractor ecosystem would harm carriers just as much as the contractors themselves. To ensure the industry’s survival, carriers must set aside past business initiatives and take immediate action.
Reduced competition drives costs higher for carriers
If small and midsize contractors are forced out of business, the market will become dominated by a handful of more prominent players with significant bargaining power. With reduced competition, these larger contractors can quickly increase their prices, knowing that carriers have limited or no alternatives for critical infrastructure projects. This monopolistic dynamic not only inflates costs but also undermines the agility and innovation that smaller contractors bring to the industry, ultimately straining carriers’ budgets and potentially slowing the deployment of essential telecom services.
The path forward: Collaboration is key
The most effective way to address these challenges is to establish a work group composed of carriers, contractors, and industry stakeholders. This task force would identify the root causes of the industry’s fragility and develop actionable solutions to ensure its sustainability. Such a group must focus on creating fair pricing models, streamlining compliance requirements, and improving payment terms.
The success of this initiative hinges on leadership. Others are likely to follow if even one primary carrier takes the lead in organizing this effort. Collaboration is not just a moral imperative; it is a business necessity. A resilient and sustainable contractor workforce is essential for carriers to meet their deployment goals, maintain existing networks, and expand into emerging technologies like 5G and beyond.
What’s at stake?
Carriers may believe they are insulated from contractors’ struggles, but this couldn’t be further from the truth. Without contractors, networks will face delays, safety risks will rise, and carriers will be unable to keep pace with consumer demands. Moreover, public scrutiny over unsafe working conditions or contractor bankruptcies could lead to reputational damage and even legal consequences.
By taking the first step toward collaboration, carriers can safeguard their futures and build a stronger, safer, and more resilient industry. The alternative—a continuation of the current trajectory—risks a collapse reverberating across the entire communications ecosystem.
It’s time for carriers to acknowledge the gravity of the situation and act decisively. The wireless infrastructure industry’s survival depends on it.
Craig Lekutis
Editor, WirelessEstimator.com
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