You probably use a cell phone every day to keep your business running smoothly, but one electrical contractor has dialed into even bigger benefits. Hatfield Reynolds Electric Inc., Scottsdale, Ariz., is cashing in on the wireless industry's PCS growth by constructing and maintaining wireless sites.
Earlier this year the Federal Communications Commission (FCC ) held auctions on the last three of six blocks of the PCS spectrum, completing the sale of licenses. The rush is on to get the systems in place quickly to capitalize on expected growth in demand for wireless communication services.
Hatfield Reynolds got its first taste of the wireless industry's potential about five years ago when a general contractor building cellular sites asked them to bid on some electrical work. "We got a call from a guy who looked us up in the phone book and asked if we could come do some real basic electrical work," said Jon Sanders, telecommunications division manager at Hatfield Reynolds. "Of course, it wasn't real profitable right up front because we didn't have any experience with that kind of work. But we decided to stick with it because we saw a real opportunity."
Since then they've moved from doing basic grounding work as a subcontractor to actually setting towers, running the coax lines, and testing-as the general contractor. "We went from doing one or two sites a month to as many as 10, 15, or 20 sites a month," said Sanders. "Right now we average five to 10 sites a month, but now we're doing the whole site and not just the electrical part of it." Today, Hatfield Reynolds' telecommunication division comprises roughly 20% of the company's annual revenue.
The company's telecommunication division saw its biggest growth when PCS carriers came into the Phoenix area a couple of years ago. "The carriers got major financing and built out these horrendously big builds," said Sanders. "They'll come into a market and build 200 or 300 sites."
Although the Phoenix area has already seen big wireless growth, other parts of the country are just now seeing the boom. According to Robert B. Barnhill Jr., president of TESSCO Technologies, an international supplier of products and services for the cellular, paging, PCS, and two-way radio markets, an estimated 16,000 new sites will drive demand for product and construction services in 1998. Those 16,000 sites will make up 25% of all sites; there were nearly 40,000 sites built by 1997. "In addition, many existing sites will be rebuilt and/or enhanced," said Barnhill in his keynote speech at the National Association of Tower Erectors (NATE) conference earlier this year. "Mechanical and electrical certification must be accomplished and long-term general maintenance performed. There will be much opportunity for equipment and services."
As a subsidiary of IES (Integrated Electrical Services), the recent rollup of 16 contractors nationally, Hatfield Electric is looking at taking their telecommunications division to more of a national level. But for contractors trying to break into the wireless market, Sanders suggests working as a subcontractor. "Team up with a good tower contractor that
already has experience and already has good relationships," he said. Hatfield Reynolds worked for Bechtel, one of the biggest breakout contractors nationally, as a subcontractor, and now they're getting involved with Bechtel as a general contractor.
Wireless work is diverse
Work on wireless sites is varied. There are monopole sites, trailer sites, and padmounted sites, to name a few. When a carrier comes into an area, they have a "footprint" of the sites needed to provide coverage over the market area. A map of where they need sites is made. Usually the carrier will buy the sites or lease the spaces and then build on them. The carriers often have engineers on staff (or they can subout), so by the time an electrical contractor starts work on a site, there's a set of blue prints that says, "Here's your job."
But when working as a general contractor, Hatfield Reynolds takes it from beginning to end-going through the permitting process, getting the sites laid out, and doing the complete builds.
For tower sites, a base has to be dug in the ground that is anywhere from 20 ft to 30 ft deep. Concrete and rebar in the ground form the pole base. "We'll set the tower with a crane, run the communications coaxial transmission lines up the tower, put the antennas on top of the tower, and hook the antennas up," says Sanders. Then they do a line-sweep test, which makes sure the lines themselves are transmitting correctly.
Wireless challenges
"Speed to construction, flexibility in dealing with last minute changes, and complete dedication to quality and safety will be the expectation of the day," said Barnhill.
Site location is also a major challenge. Cities and municipalities are putting moratoriums on how many towers can be put in, so Hatfield Reynolds got creative. "We manufacture top hats, which are like an antenna ray that goes on top of a utility pole," said Sanders. "We put antennas in church crosses and in chimneys-it looks like a chimney is coming up from the top of a building, but it's actually an antenna."
Mergers and acquisitions are yet another challenge. Barnhill says you have to be able to quickly track and build relationships with the new "influencers," decision-makers, and owners, but Sanders isn't too worried. He says that if a contracting company does good work, the business will follow.