Slowdown of Cellular Expansion

The broadband industry has always been cyclical. The industry has repeatedly gone through periods of booms and busts that have typically been exaggerated by the manufacturers of telecommunications equipment. We’re now seeing the beginnings of the end of the boom of the big cellular upgrades to 5G. One indicator that the boom is slowing is that Ericsson and Nokia both recently lowered expectations for future equipment sales, and the stock of both companies instantly dipped around 10%. Since 2019, the cellular industry has been in a boom as the big cellular carriers upgraded around 70% of their cell sites nationwide while also building new small cell sites. These upgrades meant huge sales for Ericsson and Nokia. It meant a big boom for tower climbers and crews who work on upgrading new cell sites. It has also meant a boom in fiber construction when carriers like Verizon and AT&T constructed fiber to replace costly leased transport for cell sites. However, a slow-down of 5G construction will have a lot of repercussions around the industry. It will most immediately negatively affect firms and crews who have been working on upgrading cell sites for the last several years. The ones most harmed by the busts are the smaller construction and support companies that gear up to meet a specific industry demand – and these are usually the first ones cut when that demand slows.