Todd Schlekeway, executive director of the National Association of Tower Erectors (NATE), warned payment terms could become a sticking point in the race to 5G, as US operators ask infrastructure contractors to wait longer to get paid for their work.
Historically, Schlekeway told Mobile World Live it was common for operators to pay their infrastructure partners between 30 and 60 days after a job was completed. But now, he said operators are pushing those payment terms back, asking contractors to wait as long as 90 or, in some cases, 120 days to get paid for services rendered.
While some operators have given contractors the option to get paid sooner but at a reduced price, Schlekeway added many feel the extended terms are offered as a take it or leave it proposition.
Schlekeway said the shift is placing a “major strain” on the contractor base, made up primarily of small businesses, by essentially asking those companies to act as lending institutions.
“It’s multiple customers representing different layers of the industry that have continued to see how long their leash will be on this and they continue to push them [the payment terms] back.”
Schlekeway declined to speculate what may have prompted operators to make the changes, but said NATE would like to see them walked back. The first step, he said, is to meet with operators and see what can be done.
“It could handicap the collective industry as we’re in this race to 5G,” he warned. “If we’re asked to deploy and maintain first class networks, like we have every generation, and do it in a manner that’s leading globally, we don’t want contractual items like payment terms to get in the way of that. It could potentially if it continues down this trend line.”
Coming up short
The issue is one of two major problems infrastructure contractors face as the small cell densification workload increases ahead of US operators’ planned 5G launches. The other, Schlekeway said, is overcoming a massive workforce shortage.
Schlekeway estimated there are between 28,000-30,000 tower technicians, but said the industry could need as many as 15,000 more to meet operator demand.
The pool for construction candidates is limited, but Schlekeway said recruitment is even tougher for telecom because technicians need to be comfortable with both heights and extensive travel.
NATE and its members are trying to ferret them out. In addition to social media campaigns, Schlekeway noted NATE is recruiting through military and minority groups, as well as through career days at trade schools and apprenticeship programs. The group also backed pending legislation that would allocate funds to support technical training programs for the communications industry.
But he said the work is far from done: “The bottom line is there’s definitely a shortage and we need to continue to have a multifaceted strategy. It’s one of our most daunting challenges and a labour resources issue that the industry needs to collectively solve.”