Falling revenue and profitability has forced the industry to steadily consolidate.
(PRWEB) December 12, 2014
The Wireless Tower Construction industry sharply contracted over the past five years as business infrastructure investments stagnated following the recession. Despite strong demand for mobile data and high-speed connections, the downstream telecommunications sector relied on older existing technology to reduce costs. High-speed, long-term evolution (LTE) mobile services and fiber-optics networks were rolled out very slowly. As a result, revenue declined in each of the past five years. Rising energy costs are also expected to slightly hamper energy-intensive construction projects.
Industry profitability has also declined due to high internal competition and low telecommunication infrastructure investments. According to IBISWorld Industry Analyst Sarah Kahn, “Contracts are often open to competitive bidding, and industry operators lowered rates to win contracts following the recession.” At the same time, industry operators had to retain skilled workers and engineers. As a result, wages' share of revenue is anticipated to increase from 2009 to 2014. Falling revenue and profitability has forced the industry to steadily consolidate.
Demand for telecommunication infrastructure construction is anticipated to steadily grow over the five years to 2019, however. “Over the period, private nonresidential construction investments are forecast to increase, and local and state government funding for telecommunications projects is also anticipated to slowly recover,” says Kahn. “Additionally, telecommunications service providers are expected to steadily expand their high-speed data services, while existing infrastructure will require considerable maintenance and repairs.”
For more information, visit IBISWorld’s Wireless Tower Construction in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry primarily engage in the construction of wireless communication structures, including transmission lines, towers, cables and other utility structures. The work performed may include new work, reconstruction, rehabilitation, and repairs. Industry enterprises include specialty contractors primarily engaged in activities related to the construction of communication lines and related structures.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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