Some Small Contractors Turn to Utilities for Faster Payment

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UPDATE As we hear from more readers experiencing late payment terms affecting smaller contractors asked to do tower and network work, a new theme is emerging — diversification. As a way to buffer their cash flow against late payment from some in the telecom industry, certain readers tells us they’re taking work from other types of industries to keep their businesses afloat.

One contractor in the southeast told Inside Towers in an interview: “For three years, I have experienced the dreaded year-end non-payment issue with the same carrier. We have to make contingency plans with our financial institution, assuming we may not receive any payments during the latter half of the fourth quarter. It all gets paid in mid-January.”

He has begun taking different types of work because, “Somebody dragging out $300,000 over 90 to 120 days can be death. You lose vendors and employees” that way, he said. 

The late payment situation led him to seek work with power utilities, installing fiber or cable, as well as wireless infrastructure installations. Asked if the utilities pay in a more timely way, he said: “Oh, God, yes. It’s more complicated” initially, “but once you get used to their system it’s easy.” He sought this work noting that in the 5G world, lots of small cells will need to be installed on utility poles. He certified his company to complete work in both the power and wireless space.

Ironically, another contractor in the Midwest said he’s now looking to utilities as another source of work — think electric, solar, wind and even coal. “They all use towers in some way,” he said in an interview. He characterizes these newer customers as both profitable, and “more fair and reasonable.”

By Leslie Stimson, Inside Towers Washington Bureau Chief

August 13, 2018

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