AT&T Wireless Services Inc. is getting ready to award a large tower buildout contract and it appears incumbent service provider Bechtel Communications may have to share the contract it once solely held.
Competition is the name of the game, said Bechtel President George Conniff. Earlier this year, San Francisco-based Bechtel inked a deal with AT&T Wireless to add a number of greenfield, or new-build, sites to supplement the carrier’s GSM overlay. The greenfield project, which covers 53 markets, is under way today. A total of 2,158 sites are set to be completed by the end of this year, Conniff said, with “several thousand more” expected to be built out during 2003 and 2004.
Conniff expects Bechtel and two other contractors to carry out the rest of the AT&T Wireless contract, which he expects to be awarded in the next few months. General Dynamics Network Systems is often mentioned as a lead contender for a large piece of the contract. General Dynamics would not comment for this article.
AT&T Wireless is re-bidding the contract because of tight market conditions, Bechtel’s Conniff said. “It’s prudent and smart of them to test the market,” said Conniff. “There is no room for compassion in this marketplace.”
More tower-site-construction companies are hungry for work as carriers and tower companies have scaled back on new builds and next-generation enhancements, and those companies often are willing to work for less because less is better than nothing.
In today’s tough economic environment, carriers are striving to cut infrastructure-related costs. T-Mobile USA Inc.’s Neville Ray, vice president of engineering and operations, reminded attendees at this month’s Shorecliff Communications Tower Summit & Trade Show that carriers want to work with companies focused on the carriers’ immediate goals, which include reducing rent on tower sites. “I don’t know why that’s so absurd,” he said of the tower industry’s refusal to budge on pricing. “Without us, there is no business,” he reminded the audience.
AT&T Wireless declined to comment for this story.
Bechtel has a long history with AT&T Wireless, which began when the 100-plus-year-old engineering and construction firm spent one year helping AT&T Wireless finish its TDMA network. During the TDMA installation, AT&T Wireless asked Bechtel to form a separate team to install its GSM overlay, which AT&T Wireless has said should be complete by the end of this year. The greenfield project was a supplement to the GSM overlay.
So following three critical “one neck, one noose” (as Conniff said AT&T Wireless explained them) contracts, an industry rumor that AT&T Wireless is bidding off the work associated with the already-contracted greenfield project is raising eyebrows. Conniff said Bechtel is unshaken, noting it has been unusually lucky to have been the sole recipient of several recent major contracts.
In the mid-1990s, the company took over buildout of Sprint’s PCS network. More recently, Cingular Wireless L.L.C. entrusted Bechtel with its nationwide GSM overlay, in a contract that requires Bechtel to build out 16,000 cell sites in three years, with an option to extend to 23,000 total cell sites in five total years.
