PCCA Journal 4th Quarter 2013 - page 17

PCCA Journal|4
th
Quarter 2013
17
remained flat or even declined. This trend is
unlikely to continue, meaning that future ex-
pansions will require additional monies from
ratepayers. Current accelerated infrastructure
replacement programs won’t be threatened,
but future programs are likely to be less
robust in scope and scale. We are ultimately
very bullish on the pipeline space over the next 20 years and
anticipate three waves of capital construction spending and
pipeline replacement. The first wave is coming to an end,
after which we anticipate the industry taking a “breather”
and preparing for a second wave of five
to nine years of spending growth.
Communication
Spending Forecast
The last peak in communications spend-
ing was 2007/2008 with only modest
recovery. The underlying demand for
data centers and wireless to wired
bandwidth expansion has continued to
support construction spending, but the
current wave of spending, particularly
around 4G infrastructure, is concluding.
Nationally, we forecast little improve-
ment in overall construction spending
until 2015/2016 (Exhibit 7).
The absence of any new revolutionary
technology, particularly in the mobile
network space, results in spending
growth driven by incremental
capacity improvements.
Communication
Abundance vs. Scarcity
Within the communication
construction segment, there
are areas of abundance in
juxtaposition versus scarcity.
The abundance of spend-
ing and rapid rollout of 4G
LTE networks is supporting
construction service provid-
ers operating in the wireless
space. Unfortunately, this
phase of the wireless revolu-
tion is coming to an end.
• Verizon’s rollout is essentially complete with 4G now cov-
ering 99 percent of its legacy 3G footprint.
11
• AT&T will complete its initial 4G efforts in late 2014,
Continued on page 18
Exhibit 7
Communications Construction Put in Place Historical Figures and Forecasts
Millions of current dollars
Abundance
Scarcity
• Proliferation of smart devices
• Clarity on technology and nature of 5G wave
• Data bandwidth demand
• Qualified construction technician and supervisory talent
• Rapid rollout of 4G technology
• Government and regulatory support
• Ability to apply telecom workforce into other utility
segments
• National or common operator qualification
requirements
Exhibit 8
Verizon 4G LTE coverage as of 10/30/13
1...,7,8,9,10,11,12,13,14,15,16 18,19,20,21,22,23,24,25,26,27,...68