New Brattle Report Highlights Market Failures in Wireless Communications Infrastructure Service Industry
Prepared for NATE
In a recent report prepared for NATE: The Communications Infrastructure Contractors Association, Brattle experts examine market failures in the US’s wireless communications infrastructure service industry, particularly the tower climbing and construction sector.
Based on their analyses and a survey of NATE members, the authors find that the current monopsony market structure – where three national mobile network operators (MNOs) dominate a market of hundreds of small infrastructure contractors – is undermining the development and retention of the skilled workforce needed to build and maintain critical wireless infrastructure. This shortfall poses increased long-term threats to national security, public safety, and the future of wireless innovation.
Key findings from the report include:
- 80% of contractors report that MNO pricing is insufficient to cover their costs, and 84% have experienced declining gross profit margins over the last three years
- 98% of contractors are required to pay for third-party compliance programs, and the vast majority of them do not receive compensation for such costs from MNOs
- 54% of contractors have decreased employee counts in the last three years
The authors emphasize that without corrective action – whether in the form of regulations, policy, or industry reform – and the adoption of more sustainable labor practices, the US will face costly and difficult-to-reverse vulnerabilities in its communications infrastructure.
“Market Failure in the Wireless Communications Infrastructure Service Industry” was authored by Principals Dr. Paroma Sanyal and Dr. Coleman Bazelon, Senior Associate Dr. Yong Paek, and Associate Dr. Angela Gunn. The full report is available on NATE’s website.
