I am sure most of you have read about the telecom slowdown and pullback in the US telecom market. To me, it was no surprise.

The carriers have built out their networks, probably to 70% capacity of where they want to be. That means the last 30% is going to be less of a drive.

They also have 5G nearly everywhere. Sure, they have to decide on SA and NSA in their networks and they have to deploy VoNR everywhere, but that is already happening. Anyone on the front lines saw this 6 months ago. We wanted our leadership back then but apparently, it fell on deaf ears that believed that the power of positive thinking would win in the end. I want to say to them that we told you so but that doesn’t help anyone. Now they know it and the reality is setting in. The good news is I am still positive, just curbing my enthusiasm to where it can make a difference.

So, what does this mean for our industry? Well, it depends on where you are in the industry.

What about the OEMs? 

As you probably heard Nokia and Ericsson are already paying the price in their stocks tumbling. That’s OK, they are seasoned veterans, and they will bounce back. It’s going to be a revenue shift. They have been pushing software and upgrades that have been ongoing. Smart people run them and they already made smart moves that will move them ahead as 5G services mature and grow. Then there is 6G, which once defined they can start moving towards it, maybe in 3 or 4 years. 

What about the Carrier’s teams?

Well, here is where I believe we’ll see a noticeable shift. The carriers have to downsize at some point. The carriers will want their networks to start to pay for all the investment they put into the network over the past 4 years. 

Carriers to their networks, “Hello, it’s payback time.”

All the carrier’s teams that were in deployment, unfortunately, will start to downsize. I think many of them already see the writing on the wall. For some reason, the press seems to be missing the disappearing act. If you’re in the industry you already see it and hear the rumblings of a larger downsizing. That’s OK, we all knew it was coming but it still hurts when it happens.

Specifically, what does that mean? Usually, construction managers (CMs) and project managers (PMs) are the first to downsize. Then some of the engineering staff. Then the NOC staff. Support staff will dwindle but that all depends on how the carrier prioritizes support. 

Sorry teams.

What about the tower crews?

OK friends, this is tough to take but as the deployments wind down the first ones we see downsizing are the tower crews and their staff.

Climbers will start to consolidate into smaller crews. Don’t worry, the prices probably won’t drop, but the demand will, gradually, over the next year or so.

Luckily, DISH will continue to build. Crews working for DISH that have agreed to their pricing model should be able to increase headcount, unless DISH pulls back.

Sorry climbers, but in construction (like war), usually the front line gets hit first. Climbers are the front line. Climbers do the physical work and risk the most. Literally risk the most by climbing and working with heavy equipment in the air. They probably spend the most time away from their families, traveling for work, and have the most health issues. That’s why the industry is always changing players.

Also, they are probably the lowest paid. 

What about the tower companies?

Companies like Crown Castle, American Tower, and SBA are going to do just fine. I think the stock market may punish them a bit for not growing, but they already have the leases locked in with everyone. 

In my eyes, the towercos are in the best position to lock in their customers for a very long time. Sure, they have expenses, but the reality is that if they would stay in their lanes, they could maximize their profit. 

With the slowdown, they may be able to downsize a bit. It makes sense because they’ve expanded into construction and project management. They also had to ramp up their leasing and support services. I would think now they can start to see those departments get smaller.

I think they are going to be just fine moving ahead, just slower growth. Lucky for them upgrades will continue over the 4 years or so. Why does that matter to them? Because lease modifications are a way for them to suck just a little more out of those carriers. 

What about NOCs?

I think that most NOCs for network support will be doing well. I think that deployment support NOCs may have to shift to network support. While this nuance may get lost on you, it is a big deal to the support teams.

FYI: NOC = Network Operations Center. (Don’t mean to insult you, but someone new to the industry may not be clear.)

We may also see the support split between offshore and onshore. This will become a hotter topic with the rise of hacking, see how Nexius and Huawei allowed hacks to happen to carriers because the offshore NOCs allow employees to gain access directly inside of the carrier’s network using a Virtual Private network (VPN) connection. Behind all firewalls!!

For those of you that don’t understand this concept of NOC offshoring, let me explain briefly. When you have an onshore NOC, it usually means it’s in the same country as the carrier, in this case, the United States. That is considered more secure and expensive. Whether you agree or disagree, I don’t care. 

Offshoring is when you take the NOC to another country that is very cheap. These countries are generally India, Pakistan, Romania, Philippines, Viet Nam, or another country that has cheaper labor than the USA. 

When you get those annoying telemarketing or tax scam calls, chances are good they’re coming from Pakistan.

To sum it up:

• Onshore is more secure but also more expensive.
• Offshore is cheaper but less secure.

The rise of the onshore NOC may happen again due to these issues. It may or may not help since the Chinese hackers will continue to hack.

The NOC is becoming more and more relevant. The beauty and pain of automation, self-learning networks, and AI is that we will rely less on human interaction. Sorry silly humans, but AI is helping to improve networks, not just create the next Terminator.

What about Labs?

Labs will continue but they will move away from 5G once SA and slicing get resolved, and then move into 6G. While it is very early for 6G, they want to test a lot of theories to see how to define 6G. 

Lab staff may have to figure something out.

If you work in a mechanical lab, things may get tough but the carriers are always adding equipment to sites, so thermal testing is still critical. Will carriers lay the responsibility on the OEMs, suppliers, or their own staff?

What about Test Equipment?

And then we have test equipment. Believe it or not, there is a need to find 2 things, interference and PIM. For some reason, these 2 things are still required in this industry. 

FYI: PIM = Passive InterModulation. 

The broader the spectrum use the more likely the network experiences PIM. Broadband channels are opening up to 100MHz which means interference of all kinds will sneak in and cause headaches for the carriers. The end user may or may not notice, but for the NOCs and network engineers, it will keep them up at night. To be blunt, PIM sucks and it can’t always be resolved. If it isn’t an installation problem, it may be out of your control. 

Let’s say it all together now, “We hate PIM! PIM is bad!” Unfortunately, sometimes we have to live with it. Think of that cousin, uncle, or brother-in-law you have to deal with at every family get-together. Yup, like that. 

The rest of the testing still exists and will be used, but the need for dedicated test equipment will wane as software and crowdsourcing grow. 

The good news is we still have test jigs for the devices. This isn’t going to change and as most devices have more spectrum and additional features to smart devices and IOT devices, we will need to keep them compliant. 

I would guess as 6G gets defined lab equipment will start to rise again. Even labs will slow for the next 2 or 3 years but they will do limited testing.

Summary

Hey, the next few years might get tough. Why?

• We are all waiting to see if DISH can build a network like they said they could. Charlie Ergen finally has to put up or shut up. Whether you’re a fan of his or not, I would bet that all of you are secretly rooting for his success. The industry needs this fourth player. I would like to see DISH find a partner that will help them grow, like Charter or Comcast but I don’t think that will happen anytime soon.
• We see T-Mobile appears to have the best network and the largest growth of all the carriers. I believe they want to start building revenue without all the expenses of expansion, upgrades, and mergers. I am assuming the merger is officially over. We expect them to downsize the company to increase profits. They appear to be pushing towards #1, but they have work to do. So far, TMUS has not been a disappointment. 
• Verizon appears to be in decline. For the last 5 years Verizon has been a disappointment. They dropped out of first place in nearly every category. The stock price has continued to decline. The spectrum shortages are shining through. The transition to 5G has been brutal. Luckily, they have a loyal following. Visible has helped. The partnership with Comcast has been favorable to them, at least it appears that way. I don’t know if that’s enough to keep them at #2.
• AT&T hangs on, but again, see Verizon above. T-Mobile is pressuring them to be more profitable and improve network performance. However, they appear to be #1 in revenue, but for how long? They have a lot of spectrum, but are they using it wisely?
• Comcast is a player, since they appear to be pushing into the telecom realm with all the services they offer. I wonder how long the Verizon partnership will hold up? It appears to be solid and the CBRS deployments aren’t exactly happening at lightning speed for Comcast.
• Charter is another cable company that is making the push into a top telecom company. In my opinion, they have the best potential to see massive growth.