Soaring metal prices are murdering builders’ margins

May 01, 2008 | 12:20 PM |

The good, the bad and the ugly—it's an apt description of the current state of the cellular tower industry and what it means for metals fabricators and other suppliers that service it.

On the bright side are strong market fundamentals driven by a variety of factors, including wireless services being used for more minutes both through traditional cellular phone handsets and wireless broadband access cards for laptop computers, Stan Catey, vice president of cable products and towers at the Andrews Wireless Solutions Group of CommScope Inc., Westchester, Ill., said.

Dimming the view is the margin squeeze being felt due to rising raw materials costs, which suppliers have found hard to pass along in a very competitive market.

Then there is the downright unsightly Despite strong cellular market growth, rocketing materials costs are likely to quash some plans for new tower construction.

Some regions are tougher than others, a spokesman for cellular tower manufacturer Fred A. Nudd Corp., Ontario, N.Y., said. There are some areas of this country, like New York, where the tower market is becoming saturated, resulting in soft tower demand, especially during an economic downturn. He added that he sees cell phones as a discretionary item and not absolutely necessary when you are financially strapped.....