Michael Mitchell 2016-12-09 07:17:44
The heavy influence of mobile network operators was felt in the Wireless Recession of 2015-2016, with all wireless carriers but Verizon cutting back. 5G cellular network plans hold promise for future growth. I don’t know about you, but I’m happy to see 2016 fall away in my rearview mirror. How does one really capture what most small business owners went through in the last 12 to 24 months? In short, we were in a wireless recession, not nearly as bad as the Great Recession of the late 2000s and early 2010s, but it was pretty bad. What makes the 2015-2016 Wireless Recession different from the rest? We know that, unlike the other recent recessions, the 2015-2016 recession was pretty selective and didn’t affect everyone. For example, the auto industry was less affected, thanks in part to low fuel prices coupled with low interest rates. And if your business was an approved Verizon vendor, your wireless business was less affected. Wall Street saw growth, but was it really growth or was it something else? Often, Wall Street is smoke and mirrors. I believe those modern- day thieves simply came up with yet another scam to make money. In this case, they probably borrowed cheap money to buy back their own stock so their balance sheets showed increased margins, but did they really grow their businesses? In most cases, probably not. I’m betting that at some point when interest rates rise and those companies begin paying back those cheap-money loans — ka-boom. Wall Street should never be taken as an indication of economic health. Some small businesses were busy. Verizon did a nice build out, but the other carriers basically did nothing in comparison. Although my company wasn’t involved, we saw a lot of activity installing backhaul, but, again, most of that was for Verizon. We were involved with pockets of activity, one with a rural carrier and others based on special events. In the second and third quarters of 2016, we saw some things start to heat up: T-Mobile kicked off a few things and Sprint held a weird reverse auction for micro-mini sites. All in all, most wireless businesses will have a good fourth quarter. Human minds can think up some amazing designs and applications, but consumer products couldd take years to design and manufacture. But again, why did wireless die in 2015 and the first part of 2016, and what does this mean for the future? Here are several reasons: Companies didn't have plans in place. Companies didn’t have money to invest in their networks. Carriers focused on rate-plan, buy-out programs that killed their incomes. Carriers are way out in front and are planning for 5G. History teaches us that all markets eventually stabilize and then rebound, generally becoming a little more valuable than they were before a financial crisis. You cannot cut your way to profitability, and, at some point, company executives become tired of not making money. The only good thing about Wall Street is the pressure it exerts to grow. We saw this happen in the second week of September when all four major carriers’ stock prices rose, some by as much as 34 percent. History will probably be kind to FCC Chairman Tom Wheeler regarding his direction toward 5G cellular technology. If you haven’t seen the speech he made at the National Press Club posted on YouTube and on the FCC website, you should. I’m sure everyone is excited because 5G should bring the next big build out of wireless infrastructure for all those who are prepared. But when will it start? Most of the 5G build out will be directed toward user devices, as will the carrier build outs. Human minds can think up some amazing devices and applications, but consumer products could take years to design and manufacture. Until the Big 4 have a consumer product to serve with their networks, it’ll be a little while longer until we see them go into full-throttle build mode. Nevertheless, we can predict how the network will look. Antenna positions will be lowered dramatically, and antenna site placement will be much more dense. We are already seeing signs of the future with distributed antenna system (DAS) networks and small cells, but they are expensive. Some experts say every carrier is going to need hundreds of sites to cover small urban populations. If that is the case, then DAS networks and small cells will be much too expensive to maintain, let alone build. How will all this play out? It’s too soon to tell. In the meantime, some small internet- of-things (IoT) carriers are trying to build out, but will they be able to compete when the Big 4 decide to enter the race? The more competition, the better, but being first to create a market is usually a good position to be in. The entire IoT marketplace potential is so vast, trying to predict this future is too difficult, although I’m sure the IoT will make our lives much easier and faster. Andy Hester In September 2015, the wireless industry lost a good soul. Raymond “Andy” Hester, or as I called him, “RayRay.” Hester started his career in the Marine Corps, where he learned electronics and communications. He started in the two-way radio industry, and then went on to paging, LoJack and EMF Telecom. RayRay worked for us for six years and made lasting impressions on his coworkers and me. I miss you every day, RayRay. Michael Mitchell is president and CEO of EMF Telecom, a construction company with headquarters in Nashville, Tennessee. Mitchell has run a small to medium-sized company for the past 11 years and has more than 20 years of managerial experience with large wireless companies. His email address is email@example.com.
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