Thursday, June 7, 2012

BTOP and Waiver Puts a Lull on the Market

With the freeze on BTOP grants to the States, and the hold on all waivers for the Public Safety Broadband Network, it has put a big damper on the plans of many. With the state of employment at its current levels it is forcing organizations to rethink there manning of potential bids. Do they go ahead and hire now and then wait? Will they have enough budgets to carry the load until the projects really start to move – if they win? Even though the mandate to get the FirstNet Board online by August…is it too far down the road before actual RFPs are let and awarded? Do the main players take the chance to hold off on hiring the key and essential players currently on the market in the hopes that no one will hire them before time runs out?

From my interpretation it’s a lot like the stock market. Given the fact that we are sitting at all time lows in the employment picture (high unemployment); given the state of financial budgets have been locked down for the last two-years (if not more) due to uncertainties in the market; observing the amount of time we have been sitting at the bottom of the curve; has forced a lot of people to believe in the “doom theory”. Where doom looms I see opportunity. I believe it is time to put our stake on the market and start to view this as a “buy low” opportunity (a bullish view). All the stocks are at their lowest in a decade. It’s time to start buying the market back. In this case it happens to be one of the biggest looming telecommunications booms in over a decade. The commercial carriers have already committed the course.

The success of the coming year will a plethora of RFPs setting the pace for a new market of broadband wireless for both Public and Private ventures. Given the time frame since the last boom in the telecommunication space; and the fact that there has been a brain drain on the employment within this sector for the last 5-10 years; plus the movement of other key technical expertise having moved to “other” industry segments; possibly demonstrates a looming war of available talent for this next telecom boom. These same talents that will be fought for have also grown weary of the telecom space through its volatility and insecurity. They have also become much smarter as to what the ideal company they want to work for should look like. 

Current funding by the Obama Administration was at $7 Billion of which, realistically, only $2 Billion will be delivered. The other portion has to come from the sale of other frequencies. It may be just me, but the current roadmap of installed assets for a given national carrier runs around $20-30 Billion dollars. Not including the capital expenditures required to actually build the solutions. Those same carriers penetrate, roughly, 96% of the population mass. The PSBN will have to cover, roughly, 98% of “geographic mass”. That is a totally different scenario! Plus the fact that the hardening requirements for the PSBN are, roughly, three times that of a commercial carrier, puts a realistic budget of an installed asset base for the PSBN around $70-$100 Billion dollars (conservatively). We should expect that the operational budget (includes operations and maintenance) would be roughly 10% of the total installed asset base, in essence $7-$10 Billion a year. The capital required to build the solution is a whole other task.

Given the size of the market opportunity, and the inherent bridge between commercially available technologies, commercial (private) funding investment opportunities, and the backing of State and National Government entities, it should be clear that we face a great opportunity to deliver many jobs for many years to come.

Everyone is just sitting at the gates like prancing racehorses ready to be put into their race stalls. But it will be hard to put those racehorses in the stalls, let alone have them prepped for a strong race, if you don’t have the expertise to make it happen before it happens. Those that commit today will be best positioned to win the race when it does start…6 months is not that long before the race starts. 

No comments:


Words to Live By: “Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… The ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… They push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.” (Steve Jobs)