As the carriers reduced capex coming into 2023, the pause created an immediate impact on many wireless infrastructure companies. Depending on who you talk to, the current wireless deployment slowdown is taking a different toll. One thing is for sure, the business climate of 2023 has shone a light on the importance of diversification.
“When [some carrier] upgrades came to a screeching halt in January of this year, that had a tremendous impact on organizations that didn’t have that diversity of customers or service lines. And they’re now trying to diversify services,” said Michael Falsetti, President and CEO, Verita Telecommunications.
Larger, more diversified companies are faring the best, moving their employees around to other work, possibly laying fiber or cutting the grass at cell sites. While smaller companies are looking to diversify their work and their customer mix.
Micrin Towers LLC, was less than two years old when it was hit by the slowdown last year. A carrier stopped building and the tower company that Micrin Towers subcontracted for stopped work. Since losing its main client, the provider of construction and telecom solutions has seen its seven crews dwindle to two or three. The company covers the Midwest and the South.
Michael Ingram, President and CEO of Micrin Towers, is hoping to maintain a certain level of work for his crews in decommissioning equipment or building small cells, to keep them on board at his company.
“We have a strong family. That’s the core of how we built this company,” Ingram said. “I express the importance of family. Family breeds loyalty. So, I don’t demand loyalty before I provide a family.”
Ingram has found new customers, onboarding with Crown Castle and CMS Wireless, which is part of Ontivity. And he is looking to onboard with Ericsson and a few others.
“My goal now is to not be in a situation again where we have only one customer in the future. We want to have more diversified supply coming through to us,” Ingram said. “We will just keep working for as many of them as we can. If one should slow down, the others will hopefully carry us.”
Subcarrier Communications has seen a pronounced slowdown with the carrier installation and the services side of the business that began in the early spring. It has the advantage of constructing, owning, and managing tower assets, as well as marketing, managing and maintaining tower assets in 42 states across the country.
“We’re not laying anybody off. Right now, we’re shifting employees to more productive sectors. We’re keeping everybody employed as most of our employees have been with the company for over a decade now. But we remain cautious since we’re not sure how much longer this slow down will last,” said John Paleski, President, Subcarrier.
During times like this, Subcarrier transitions its tower teams to tower inspections and general tower maintenance. Being a tower owner, Subcarrier has the flexibility to move technicians into tower modification work and even basic tasks such as clearing tower compounds and road excavation.
The good news is carrier build outs and modifications are expected to pick up during the fourth quarter as the FCC is set to release the second tranche of the C-band frequency allocation as the satellites clear that part of the spectrum. Another driver of renewed activity will be AT&T when it receives the delivery of a dual-band radio, which will allow it to build out the 3.45 GHz band and the C-band simultaneously.
“On the bright side, our broadcast leasing and servicing sectors remain robust and are moving significantly ahead of projections, as are our government service and solutions sectors,” Paleski said. “One of our leading carriers has stated that they are preparing to begin their second C-band modification during the next few quarters. So the present slowdown should begin to move forward again during the fourth quarter of this year.”
By J. Sharpe Smith, Inside Towers Technology Editor