In the unstable economy, many design firms are receiving mixed messages from the marketplace as sectors such as telecommunications appear poised for a rebound while the manufacturing sector offers little hope on the horizon.
After nearly three years in the doldrums, firms in the telecommunications market are eyeing a possible uptick as wireless companies look to speed up their networks and gain an edge on their competition. Following a series of consolidations that cooled off the wireless market, companies are moving forward with plans to add new cell towers and update existing sites with more bandwidth.
Photo: Black and Veatch
“This is our best year of the last three,” says Martin Travers, president of the telecommunications division of Black & Veatch, Overland Park, Kan., which has added nearly 200 people to its telecommunications division since August. “We’re not back to the glory days of 10 years ago, but things are moving in the right direction.”
In May, one of Black & Veatch’s clients, AT&T, announced it would begin network upgrades to boost its 3G network beginning late this year, with completion expected in 2011. The company will upgrade to High-Speed Packet Access 7.2 technology, which it claims will double its peak network speed. The company will begin trials of its 4G Long Term Evolution [LTE] technology in 2010, with deployment in 2011. As part of the plan, the company will add 2,100 new cell towers across the country while adding fiber-optic connectivity and additional capacity to thousands of existing cell sites. The company already has 3G mobile networks in nearly 350 U.S. metropolitan areas and plans to add 20 more this year.
The AT&T rollout is likely to impact several firms in the market. Terry Neimeyer, CEO and chairman of KCI, Sparks, Md., says his company was brought in by Bechtel earlier this year to rework sites for AT&T. “They had been quiet for eight or nine months [last year], but now the work is moving again,” he says.
Neimeyer is hopeful, despite a down economy, that consumer demand will push wireless companies to speed up service. “It used to be about getting cell service and e-mail, but now video is really driving bandwidth demand,” he adds. “There was concern for a while that devices like iPhones could be a fad, but it seems to be a true trend.”
Once a major wireless provider like AT&T pushes its speed, others are likely to follow. Verizon is planning to test its 4G technology in up to 30 markets starting next year.
Still, some design firms aren’t ready to bank on the promise of 4G projects. Michael Walsh, group president of Pasadena, Calif.-based Parsons, says its telecommunications business remains flat, but he is hopeful that business will ramp up by the end of the year.
“We see companies advertising 4G, but we don’t see a lot of [work] happening yet,” Walsh says. “Telecom companies are experts at managing business through cash flow. If people aren’t using their phones, they respond quickly. Projects can start and stop almost immediately in this business. If companies start to see response to their 4G efforts, things will move ahead. Otherwise, they will pull back until demand is there.”
Although major carriers are driving much of the work, new entrants continue to push forward despite the recession. Black & Veatch is working with high-speed wireless Internet technology company Clearwire, which is already deploying 4G in several markets. The company in January launched 4G Clear WiMAX wireless broadband service in Portland, Ore., and followed up in June with 4G service in Las Vegas. The company plans to cover 80 markets by the end of 2010. Clearwire has been in discussions with Sprint since last year to partner on a nationwide 4G network rollout.
Some near-term projects could result from the Obama administration’s stimulus package under the American Recovery and Reinvestment Act. The Dept. of Agriculture received $2.5 billion toward grants for rural broadband...