A Vendor Who Closed His Company Due to Late Payments Talks to IT

This is a letter to Inside Towers regarding our recent stories on the late payment issue between carriers, major towercos and small contractors. The writer agreed to tell our Washington Bureau Chief Leslie Stimson anonymously about why he closed his company.

IT: What happened to your company? Are you now working in a different industry?  

“I shut down my company some time ago, in 2010. I am still in the same industry, wireless, working with many of the same people, which is why I am careful in what I am telling you. I now work on the carrier side or for the equipment manufacturers that manage the builds and only on a bi-weekly compensation basis.”    

IT: What do you think should be done to make the carriers stop these types of actions?

“Your next question is incredibly complicated and is different from a carrier versus vendor point of view.  I am not sure the carriers have a reason to stop these actions.  Build outs are controlled by stock prices and funding and in the end so are payments to vendors.  If there is money budgeted payments can be made, otherwise things get complicated.”    

(anonymous source continued) “From my experience, the people working for the carriers who make these decisions to delay pay, lower pay, stop payments, are not terrible people; more likely they don’t understand and sometimes take a callous view of payments to vendors.  Their goals are bound by spreadsheets, dates, bonus schedules, budgets and quarterly stock calls.  Many times there may be two or three layers from the vendor in the field that is dependent on a payment to keep their business going.  The carrier does not see or understand that by not paying on a timely basis they are delaying their own build out.  At that point it may not matter to the carrier.  Sometimes if the vendor is delayed, the carrier has the vendor fired then starts again with a more expensive process and a longer build. This takes the old negative performance off the books and a new project starts.  From what I have seen, there simply is not a lot of benefit for the carriers to change the current system, unless it is important to understand the true cost of time and money they have been wasting from delayed, no and low payments to vendors.

For the vendors, I think speaking out is a first step.  As long as the vendors keep the billing issues to themselves for fear of losing out on business, carriers can continue the practice of late, slow, low or no payments.  After my company’s experience with Verizon, people in the industry would approach me and tell me stories of this happening to other companies. We did not hide what happened and did talk about why the company closed as a warning for others to be careful.  However I have found people in the industry do not want to talk about things that have happened to them, as that might hurt their chance of obtaining additional business.  They know the carriers do not hire vendors who “cause trouble.”   Your articles and others are a big help to get the word out nationwide that this is not a regional or one company thing.  It is not something one small company needs to blame themselves for – which I think most companies do. This is a nationwide industry practice that negatively impacts small businesses, timely build-outs and getting good wireless service throughout the United States.

The second step is to get some type of support for vendors without harming their ability to continue their business with the carriers.  The wireless associations support the carriers or tower companies, not the small businesses. It would be great if the vendors, who pay dues into many of these associations, had an association of their own without the fear of offending the carriers.  They need a third party with influence to help negotiate when they are not receiving payments.  Vendors could use the help of an ombudsperson or a person/people to assist with non-payments or when being repeatedly told the billing process changed again or new steps are added. 

A third thought is there should be some type of certification for the work people are doing.  Right now the carrier will continue to seek lower and lower prices because a company always comes in with lower paid and untrained staff and bids work at bargain basement prices.   This company will do first 10 to 15 percent of the work, take the money and stop.  To compete, the next trained crew somehow believes they have to lower their prices to survive.  It is possible certification, from zoning work to tower work,  would at least limit the staff that the day before worked at Starbucks.   And yes, I have worked with that staff.

Fourth thought for now:  Should there be a website where vendors rate how different carrier offices pay? i.e. Typical contract 60 day pay – average actual reported is 89. What about a range for the general pay-points in different parts of the country for carrier work? We now have websites sharing general information on hourly wages and salaries for many jobs and careers and information on all sorts of company performance.  Knowing how a competing carrier pays could create a sense of fairness competition but the range of pay points could backfire and carriers could choose the lowest amount.”

Comments? Contact [email protected] or [email protected]

September 7, 2018

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