A boom in construction of wireless communications towers brings with it sales opportunities for electrical distributors.
The rapid growth of the world's wireless telecommunications systems is generating demand for some electrical products, especially among manufacturers actively pursuing that market. The rush seems likely to accelerate before it subsides.
Cellular telephone, and the more recently introduced personal communication services (PCS) systems, operate through wireless stations that relay their signals worldwide. These sites use a variety of electrical products, from cable and cable ties to specialized enclosures, connectors, surge suppressors and uninterruptible power systems. Demand for wireless communication has surged in recent years and by all projections will continue to grow for several years. As it does so, the number of wireless transmission sites must grow with it, meaning rapid sales growth for companies that target this market.
The U.S. Federal Communication Commission (FCC) earlier this year held auctions on the last of six blocks of the PCS spectrum, completing the sale of licenses. The rush is now on to get the systems in place as quickly as possible to capitalize on the expected growth in demand for wireless communication services. One wireless-industry publication said carriers were on track to provide PCS services to 170 million people in the U.S. alone by the end of 1997. Aside from the desire to get their services up and functioning, wireless carriers are also being forced to move quickly by the realities of geography and local politics-there are only so many sites that provide good reception and also please local zoning and planning boards.
To meet the carriers' demanding rollout schedule, the timetable for constructing the sites has been extremely tight, says John Burns, senior vice president for sales and marketing at Burndy/FCI Electrical, Manchester, N.Y. "There's been a land rush to invest in PCS, and that brought a rush to get sites in place and mesh them into the U.S. phone system."
Most of the construction is handled by fewer than a dozen large contractors that are hired by carriers such as AT&T Wireless or Sprint PCS to manage the entire project, from site selection and zoning clearance to construction, leasing and maintenance. Some have been erecting as many as seven to 10 sites per month, averaging three to four days to erect each site, a schedule that allows no flexibility for delivery problems, says Burns. For this reason, Burndy/FCI is pulling its distributors into the fray.
Burndy/FCI has been pushing its distributors to go after the PCS market, and providing them with tools for the job, such as lists of specific suggested inventory and customer target lists. The company also has assembled a package of grounding and connection products and installation tools needed to complete a typical cellular or PCS site. Factory specialists support the distributors, calling on specifiers at service providers and equipment manufacturers, while Burndy/FCI's standard electrical construction and maintenance sales force drives sales from the contractor level, Burns says. Some distributors have warmed to the idea, drawn by the fact that each wireless tower represents about $1,000 to $1,500 in connectors alone.
Because site construction is dominated by so few companies, manufacturers must find a way to capture the attention of those contractors and get their products specified in the plans, says Steve Meyers, director of marketing for the telecommunications division of Thomas & Betts Corp. (T&B), Memphis, Tenn. It's still important to call on the carriers such as Lucent and Sprint to build brand awareness, he says, but most of the division's sales force concentrates on the site contractors. Meyers' group mainly sells poles for the sites, though he says T&B is gearing up to offer more of a package on the electrical side.
The enclosures for equipment on the wireless site is a major focus for Rittal, which has developed a line designed to telecommunications industry specifications, building on experience the company gained supplying the European telecommunications market. The company works both the construction side and the original equipment manufacturing (OEM) side of the equation. Stan Craver, marketing manager for Rittal's telecommunications division, says while major manufacturers have been dominating with complete systems, there is a growing market among independent systems integrators, who cherry-pick the best components from several manufacturers to build their systems.
The rush is on in North America, and some players, including Meyers of T&B, expect demand to peak around mid-year 1998 but continue strong through 1999. Burns of Burndy/FCI expects demand to remain robust for the next three to five years. The rest of the world holds enormous long-term promise. Particularly in developing countries without an established hard-wired telecommunications infrastructure, wireless presents an attractive alternative when building the system from scratch. For electrical companies that can tailor their offerings for this market, there's plenty of work to be done.