Delayed Contractor Payments May Inhibit 5G Deployment In The US

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Delayed contractor payments that an increasing number of wireless carriers in the United States are now insisting on may inhibit 5G deployment efforts in the country, warned Todd Schlekeway, Executive Director of the National Association of Tower Erectors. “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,” Mr. Schlekeway told Mobile World Live, suggesting the U.S. could hence lose the global 5G race over a technicality.

The delays that some network operators are now pushing for are significant; whereas previous infrastructure buildouts saw the telecom industry pay contractors between one and two months after completing any such project, mobile service providers are now looking to extend that waiting period to between three and four months after the contractors have completed their work. The change has the potential to disrupt the flow of business of tower erectors who operate under the assumption that they’ll be able to bill their services within two months of providing them in their entirety. As many tower erectors are small businesses, Mr. Schlekeway believes the wireless industry is bullying them into becoming lenders. In some instances, wireless carriers are giving contractors the option of being paid sooner at a reduced rate, further reinforcing the notion that they’re forcing the companies into changing their business models while waiting for their clients to reinvest the money they were meant to be paid. according to the NATE executive.

Besides delayed payments, the LTE densification wave that’s presently ongoing across the country in preparation for 5G buildouts is also being slowed down due to a massive workforce shortage as fewer people are willing to become tower climbers every year. Mr. Schlekeway estimates there are presently no more than 30,000 tower technicians in the U.S., which is about two-thirds of what’s needed to meet the current demand for infrastructure buildouts. Coupled with delayed payments, the efforts pushing toward the next generation of wireless connectivity in the country may end up facing new obstacles in the near future. All four major carriers previously pledged to offer national 5G connectivity by 2020, with large-scale deployment being planned to begin next year.