Building a Nimble Broadband Company

If it’s news that Broadband Construction is explosive, thanks mom for reading this. For the rest of you, a few stalls in our industry, stagnant economic conditions, and inflation may have you nervous where this market is headed. Every week though, new opportunities soften those doubts as we are reminded to capture lightning in a jar.

I propose, let’s have our fiber and install it too.

Below is a challenge for our hard-working, gritty telecom industry to challenge our preference to buy equipment outright and to conserve cash while keeping your company nimble for uncertain market conditions. Renting or leasing may be the strategy to scale during these explosive conditions, while protecting your company from a market not being pumped by government funds.

If you are looking to build a nimble business, these two relatable industries may have a lesson to teach us; renting and leasing. Commercial and Industrial Construction (C&I) and Electric Utilities are both heavy users of renting and leasing for their own reasons. Only 31% of equipment rented comes from outside these industries, while the number 1 industry sector for leasing is construction.

Electric Utilities and their contractors are mostly in a stable industry; however, when disaster strikes, scaling to restore power and capture lightning in a jar is critical. Fortunately for our great country, that work comes and goes seasonally. Purchasing that equipment may present a missed opportunity cost while one organization is shopping and acquiring, another is already on the jobsite restoring power and earning revenue with a rental. Once that work is done, is your organization carrying the extra overhead cost or spending time reselling the recent purchase? That other organization has already pivoted to another opportunity the day the rental was returned.

C&I Contractors seem to manage the risk of significant economic challenges every 3-4 years. The builders in that industry segment have become one of the most resilient and nimble industry segments to overcome economic challenges. A major factor contributing to their nimbleness and agility to economic conditions is their large reliance in rentals and leasing. Recent industry numbers indicate C&I Construction uses leases for 50% of their equipment and are the third largest segment for rental organizations.

Pre-Covid broadband construction was a fairly steady and predictable industry. Undeniable times are good within our industry; yet, challenge owners and fleet managers to build an organization that can remain nimble as these explosive times of growth are not a new norm or guarantee. As we are scaling our operations capturing lighting in a jar, how are you protecting your organization from an economic turn?

Author: Joe Valen