Join Carrie Charles as she engages in an in-depth discussion with Dan Hays, Principal at PwC, to explore the dynamic world of telecom. In this episode, they investigate prominent opportunities for growth and how PwC collaborates with companies to capitalize on them. Prepare to uncover Dan’s perceptive insights on current trends and pressing topics in the telecom sector, such as narrowing the digital divide within the economy.
Stay informed with valuable updates on the current state of the telecom industry, with a particular emphasis on the successful integration of the CBRS technology spectrum. As their conversation unfolds, they also analyze the pivotal role of China in the telecom supply chain and the potential risks faced by the industry. Brace yourself for a deep dive into the latest telecom trends and gain a comprehensive understanding of this ever-evolving landscape.
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Key Telecom Trends to Watch with Dan Hays of PwC
I am so excited to have Dan Hays with me. Dan is a Principal with PwC and leads the firm’s enterprise strategy consulting practice for the technology, media, and telecommunications sector. Dan, thanks for joining me.
Thanks so much, Carrie. I am excited to be here.
I’d love to hear a little bit more about how you got into this role or the seat that you’re in and also how you developed your expertise in the telecom sector.
It feels like it’s been a long and winding road, but I’ll try and keep it short. I’m a self-proclaimed recovering engineer. I did my college studies at Georgia Tech. While I was there, I was part of a co-op program and worked in the tech industry for a computer company. I decided that I really loved it, especially loved the business side of the tech industry. After I graduated and went to work in the semiconductor side of computing, I left to go get an MBA.
While I was doing that, I was exploring what I would do in the next phase of my life and wound up deciding to experiment with management consulting. I took a role with a management consulting firm that specialized in working with very technically oriented industries. I loved the work and the people. I’ve effectively been working with the same group of people for the past years. Several years ago, we became part of PwC. We’re now part of PwC strategy consulting arm. Along the way, my tech background morphed into the telecom world.
I was very fortunate. I got exposed to some of the very early days of smartphones and wireless data while I was working in the semiconductor industry. I decided that that was a great growth opportunity from a career perspective. I started focusing on that when I got into consulting and have never looked back. Over the years, I’ve had the great pleasure of working not only on the technology side but also on the telecom services side in both wireless and wireline and satellites. It has been a great ride.
Can you go a little deeper into your role at PwC and also the services that your team provides?
At PwC, I lead our enterprise strategy consulting team. What that means, in simple languages, is we work with companies to help them identify opportunities and execute on opportunities for growth to grow their businesses, or we help them as well with restructuring their costs so that they can free up money in order to support growth. We call that fit for growth. We also work in some other areas, including one that’s exciting these days, which we call regulatory and policy strategy.
There was never a dull moment with regulators in the tech and telecom world. We’re finding that increasingly creating value for companies in this space requires you to engage with, understand, and respond appropriately to the legislative and regulatory environment around the world. We’re doing a lot of work in that space as well. It’s about helping companies with their strategies and helping them to grow and be profitable now and in the future.
I hope you don’t mind. We’re going to jump around a bit because I really would love your perspective on a lot of different subjects. The first one is the subsidy for broadband deployment, the BEAD funding, etc. What are the latest updates in bridging the digital divide?
This is a hot topic in the telecom world in the United States in particular. We are still in the early days of this latest wave of subsidy funding for Telcos. It’s interesting. If you look back even post-2008 recession, when we had all of these recovery programs that were going on as part of the American Recovery and Reinvestment Act, you could argue that many of them ultimately failed to achieve the opportunities that they had realized. A lot of them focused on middle-mile fiber deployment. They never expanded access in the ways that were hoped.
With this latest round, what we’re seeing is a lot more focus on the last mile and on bringing broadband in the post-pandemic era to more Americans, to more homes, and to more small businesses in unserved and underserved areas of the United States. Where we are now is some of the states have started to make awards. We’ve seen the first wave of them trickling out over the past couple of months. There’s a whole long list of them queued up behind that.
What’s interesting this time is how those awards are being put forward and the types of companies that are receiving them. In our view, we see that these awards are much more targeted at the last mile. They tend to heavily emphasize fiber-to-the-home or fiber-to-the-premises type of deployments and not focus on some of the more exotic, perhaps, technologies that are out there. We can debate whether that’s a good thing or a bad thing. Satellite and even fixed wireless seem to be getting much less focus these days.
We’re also now seeing this start to have some impacts on the market. For example, we’re hearing lots of reports from Telco that we work with that it’s getting harder and harder for them to secure fiber crews to go and do trenching, boring, and go and do poll work to deploy fiber because the skilled resources that are available for are limited. Law of Supply and Demand, we’re seeing prices starting to go up for that. It’s actually a great opportunity for people looking to enter the workforce and get into that space, which I think is part of the goal of the government in providing these subsidies. It’s not just about the broadband. It’s also about the jobs that are created.
I want to talk about another hot topic, which is CBRS. Where does CBRS stand nowadays? Also, how can companies take advantage of this new paradigm?
CBRS is another great topic that lives at this intersection of regulation and business. For those that aren’t familiar with CBRS, it’s a set of unlicensed and/or partially licensed spectrums that the US government freed up as a little bit of an experiment in order to enable spectrum sharing between the US military and commercial users.
CBRS now is several years into its evolution. It’s out there. It’s in commercial usage. There are hundreds of thousands of endpoints that have been activated. By some accounts, it’s been successful that the spectrum sharing technology has proven that it works. Devices have become available. Network infrastructure has become available that’s compatible with the band. That’s been a great success.
At the same time, there are many people that would argue that CBRS has not yet lived up to its potential. The biggest indicator of that has been the relative lack of deployment of private wireless networks, whether they’re using 4G or 5G technology in commercial settings. We see lots of private wireless networks in public venues, things like football stadiums and basketball arenas and such. The number of private venues that have embraced private wireless and taken it to the next level to transform their operations and their employee and customer experiences is still pretty limited and it’s still early days.
In that sense, I would say the jury is out on CBRS. Other countries have been watching the United States quite closely to see if this grand experiment that we’ve put forward with a large amount of spectrum, 150 megahertz of spectrum in the CBRS band, really plays out in the way that it was intended. Now we’re starting to see regulators look beyond CBRS to other spectrum bands. There are matters before the FCC nowadays, looking at several other bands that may have CBRS-like type of sharing paradigms implemented for them. A lot of the progress for those is dependent upon the adoption of CBRS and the adoption of private wireless networks that utilize it.
CBRS aside, do you see any other opportunities or future spectrum demands and auctions in our future?
The US spectrum pipeline now is probably about as thin as it’s been in quite a while. Oftentimes, the FCC has 3 or 4 bands queued up actively to be readied for auction. We don’t see any significant spectrum auctions on the horizon at the moment. One would argue that this is a pretty rational moment to take a pause where we’re effectively in between generations. 5G in the United States has been rolled out over the last few years. We’re probably still another 5 or 6 years before we start getting inundated with messaging around 6G, although some of it is starting to trickle out already.
The pull for spectrum now is more limited. Add to that, growth in the US wireless industry has been placing significant financial pressures on all of the wireless operators, particularly our three large national operators. It’s a good time for them not to be having to think about spending $10, $20, or $30 billion at a spectrum auction during a time when they’re focused on economizing and managing the profitability of their businesses, as well as wrapping up the deployment of 5G and, in some cases, turning their attention more towards the expansion of their fiber networks. It is not a lot ahead for us when it comes to spectrum auctions, but there are several bands that are being debated now.
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One big challenge for all companies has been supply chain issues. What is the role of China in the telecom supply chain, and where are telecom companies at risk here?
This is a hot topic now. While the supply chain became the center of attention over the past few years as we dealt with pandemic-related shortages and shifts in the supply chain, I’d say that the actions from the war in Ukraine to some of our tariff challenges and even some of our regulatory actions that have been taken by the United States and multiple other nations, all have put supply chain back in the forefront of the attention within the tech and telecom world. We see a couple of things happening now.
Recent actions have put the supply chain back at the forefront of attention within the tech and telecom world.
The first one is that there is a great deal of focus on protecting American, and even, one would argue, Western interests in the supply chain, particularly when it comes to technology and even more specifically around semiconductor content. We’ve seen lots of shortages of semiconductors over the past few years, which have raised the consciousness about where the chips that make virtually everything work these days, from your car to your computer. Those chips are critical for everything that we’re doing.
We’re becoming conscious of where they come from. Even if they’re designed in the US, Canada, Germany, or the UK, oftentimes, they’re being manufactured in China, Taiwan, or other nations with lower cost-labor resources. That’s exposing a lot of the weaknesses in the global supply chain when we do have shortages.
What we see happening is what we think of as a multipolar world. We see this multipolar world emerging, where essentially groups of nations are banding together to create systems of supply that might be shared. Most importantly, you certainly see countries like Russia, China, and some of their allies starting to band together. You then start to see the United States, much of Western Europe, and certain other countries banding together as well. That’s causing some reorientation. If you look at the Chips Act, for example, that was passed in the United States, it throws a bunch of money at continuing to develop more independent supply chains for semiconductor content for chips. We see this evolving.
A multipolar world is emerging, where groups of nations are banding together to create systems of supply that might be shared.
Most importantly, and lastly, what we’re seeing is our clients that we work with, whether they’re service providers or whether they’re manufacturers, are starting to take a hard and detailed look at their supply chains to gain a deeper understanding of where they live. Meaning, not just their primary supplier and where is their headquarters office, but where are the suppliers? Where are the manufacturing facilities? Where are they sourcing components and even materials from?
A great example of this is when war broke out in Ukraine. Before that, no one in the world thought about the fact that more than 80% of the world’s supply of helium, a critical element used in semiconductor manufacturing, was coming from Ukraine. That immediately became a critical link in the global supply chain that was suddenly broken. There’s an opportunity for companies to understand this and to start to develop contingencies and supplier plans that acknowledge some of the restraints and constraints that they may have to deal with in the future.
Another resource that is in very short supply is our workforce people. You said it earlier. We are struggling, especially in this industry, to find skilled labor or even unskilled labor. I’d like to know, Dan. Where do you see certain workforce trends or opportunities that we can say, “Here’s a potential solution,” or, “Let’s take advantage of this and help us to expand our workforce in this way. We need solutions, and we’re just struggling to find them here.”
This is a huge concern from an economic development standpoint, from a societal standpoint, and just an economic standpoint. Here at PwC, we tend to think about this whole notion of workforce development in terms of upskilling. The releases of some of the artificial intelligence tools, generative AI have cast a big light on this. You’re hearing people talk yet again about how this will impact jobs and how this will impact workforce.
Our perspective is that it’s an opportunity to upskill people and prepare and arm them for the next generation of work, which is going to require people to understand how to interact with, use, and develop automation, how to use digital tools to help them do their jobs better and more efficiently. That generative AI and other things coming out, like low-code automation are not threats to the workforce, but they’re opportunities for better jobs that are out there. You could say the same thing about some of the infrastructure deployment opportunities that we spoke of earlier.
When you think about the growth of private wireless or you think about the expansion of fiber optic networks, those require increasingly highly skilled jobs for everything from tower climbing and safety jobs to fiber splicing, which is a high-skilled role. Those are roles that require training, employee development, and upskilling, just as much as teaching someone who’s an accountant to utilize automation and bots to help accelerate closing the books. Those are great opportunities. Our view is that companies should be embracing those. There are wonderful tools and programs out there to do that. It’s also opportunities for us to take certain segments of the population and utilize them for these types of roles.
One of my favorite examples from the telecom industry is, a few years ago, some friends of mine started an organization to take people who were leaving jobs in the US military, some of our bravest and hardest working people out there in society, and to upskill them to become tower climbers in the cellular industry. These are people who were already used to dangerous jobs, following procedures, and being accountable for safety. They’re perhaps some of the greatest resources working in that space nowadays. It was a great opportunity to upskill them and prepare them for careers in the industry.
Upskilling, training, development, everything you’ve just said that is a big solution to the challenge we’re facing. Let me ask you something. There are smaller companies that we deal with, small, medium, and large companies in staffing every day. Some of the smaller companies don’t necessarily have the resources to train and develop. They’re struggling with that piece. When consulting with companies, how do you suggest that they go about that when they have all this work and all these projects, and they’re pushing to complete and don’t have enough time or people, but now they have to think about training and developing as well?
There are several levers for that. One of them is you don’t have to go it alone. You can band together with other companies in your industry, with industry associations, with cooperatives in some cases, that have resources effectively to collectively support the upskilling of the workforce. Those are great opportunities and great ways to not have to make the investment on your own but to be able to do it as a group.
The other thing is just to look back to technology as well. For example, within PwC, we’ve developed an application that we license to people that has thousands of online, on-demand training assets available. If you want your staff to be able to learn about, “How do I use bots to go and automate processes within my company?” that could be operational, financial, or human resources. Those things are much more accessible now through online self-guided teaching than they ever have been. The barriers are quite low. The best thing people can do is experiment.
That was well said. I know so many people are outsourcing their training and development these days, and we do have a lot of folks on the show that have companies in telecom that provide the training and development. I thought that was spot on. Dan, thank you for coming to the show. This has just been enlightening. I enjoyed it. How can we reach you and/or your team and learn more about your services?
Carrie, thanks so much for having me. It’s been a pleasure. People can certainly feel free to reach out to me. My email address is Dan.Hays@PwC.com. You can check us out online at PwC.com as well. I am happy to get people connected and to chat about any opportunities or needs that folks have.
Dan, thanks so much for coming to the show.
It is my pleasure.
You take care.
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About Dan Hays
As a senior member of PwC’s Strategy& consulting practice, Dan works with terrestrial and satellite communications and information service providers, network equipment and device manufacturers, distributors, software and internet platform companies, and their investors worldwide.
Based in Washington, D.C., Dan has worked with clients across the Americas, Europe, Asia, the Middle East, and Oceania, and focuses in the areas of growth strategy, regulatory and policy strategy, deals, innovation, product development, and operational strategy.
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