Power Line & Telecommunications Infrastructure Construction Contractors
Description
Companies in this industry construct power lines and towers, power plants, and radio, TV, and telecommunications towers. Major companies include Dycom Industries, Henkels & McCoy, MasTec, and SBA Communications (all based in the US), as well as Nippon COMSYS (Japan), Sirti (Italy), and TKH Group (the Netherlands).
Worldwide, demand for electric power is increasing. Renewable energy sources are expected to be the primary energy mix which will have the most growth rates by 2050, according to Statista. Further, fossil fuels are still expected to remain dominant. Countries with long-established power transmission and distribution networks are working to modernize and expand them. Developing nations with improving living standards may leap ahead to new smart power grids.
The US power line and telecommunications infrastructure construction contractors industry includes about 6,100 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $65 billion.
COMPETITIVE LANDSCAPE
Demand is driven by increased electrical transmission and distribution requirements, as well as the need for faster and more robust wireless and wired telecommunications services. The profitability of individual companies depends on their ability to win contracts and accurately bid on projects. Large companies have advantages in their ability handle multiple projects in various locations. Small companies can compete by specializing in services offered or by focusing on a specific geographic area.
The US industry is concentrated with the top 50 companies accounting for about 60% of the industry's revenue, and companies range from small, local independent firms to multibillion-dollar corporations that reach national and international markets. Companies also face competition from existing and potential clients that may have in-house personnel that can perform similar work. There are few barriers to entry.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include power and communication transmission line construction, which account for about 35% of the industry's revenue. Other services include power and cogeneration plant construction (about 15%); maintenance and repair of power and communications transmission line, cable, and towers (about 10%); and additions, renovations, and alterations (about 10%). Power generation facilities range from complex nuclear and fossil-fueled plants to alternative energy (wind, solar, geothermal) structures.
Operations focus on bidding for projects and managing project plans, labor, equipment, and construction materials. Results are affected by a company's ability to successfully win projects through a competitive bidding process and then manage costs effectively. Contract costs typically include materials, tools, and labor, along with payments to subcontractors whose work may be needed to complete a job. Some materials used for the work are supplied by the customer and are not included in the contract cost. Under certain contracts companies may agree to provide all or part of the materials. Project margins for these types of contracts are typically lower.
Much of the work in the industry is highly specialized and employees must be trained and possess technical skills. Low unemployment or labor shortages can impact a company's ability to hire qualified employees at affordable costs. At times companies may use subcontracted labor if in-house resources are not adequate. Subcontracted work often yields lower project margins than work companies perform themselves. Senior management regularly tracks and reviews key financial performance metrics and the status of operating activities. They also manage proposed investments in property and equipment.
Worldwide, demand for electric power is increasing. Renewable energy sources are expected to be the primary energy mix which will have the most growth rates by 2050, according to Statista. Further, fossil fuels are still expected to remain dominant. Countries with long-established power transmission and distribution networks are working to modernize and expand them. Developing nations with improving living standards may leap ahead to new smart power grids.
The US power line and telecommunications infrastructure construction contractors industry includes about 6,100 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $65 billion.
COMPETITIVE LANDSCAPE
Demand is driven by increased electrical transmission and distribution requirements, as well as the need for faster and more robust wireless and wired telecommunications services. The profitability of individual companies depends on their ability to win contracts and accurately bid on projects. Large companies have advantages in their ability handle multiple projects in various locations. Small companies can compete by specializing in services offered or by focusing on a specific geographic area.
The US industry is concentrated with the top 50 companies accounting for about 60% of the industry's revenue, and companies range from small, local independent firms to multibillion-dollar corporations that reach national and international markets. Companies also face competition from existing and potential clients that may have in-house personnel that can perform similar work. There are few barriers to entry.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include power and communication transmission line construction, which account for about 35% of the industry's revenue. Other services include power and cogeneration plant construction (about 15%); maintenance and repair of power and communications transmission line, cable, and towers (about 10%); and additions, renovations, and alterations (about 10%). Power generation facilities range from complex nuclear and fossil-fueled plants to alternative energy (wind, solar, geothermal) structures.
Operations focus on bidding for projects and managing project plans, labor, equipment, and construction materials. Results are affected by a company's ability to successfully win projects through a competitive bidding process and then manage costs effectively. Contract costs typically include materials, tools, and labor, along with payments to subcontractors whose work may be needed to complete a job. Some materials used for the work are supplied by the customer and are not included in the contract cost. Under certain contracts companies may agree to provide all or part of the materials. Project margins for these types of contracts are typically lower.
Much of the work in the industry is highly specialized and employees must be trained and possess technical skills. Low unemployment or labor shortages can impact a company's ability to hire qualified employees at affordable costs. At times companies may use subcontracted labor if in-house resources are not adequate. Subcontracted work often yields lower project margins than work companies perform themselves. Senior management regularly tracks and reviews key financial performance metrics and the status of operating activities. They also manage proposed investments in property and equipment.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
Pricing
Currency Rates
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