Nokia acquisition highlights pressure to 'self-perform'

Having shed its mobile device unit, Nokia is putting some of its cash to work here in the United States. Yesterday the company said it had closed on its purchase of SAC Wireless, an Illinois-based provider of wireless infrastructure services. SAC contracts with wireless carriers to provide site acquisition services, permitting and network deployment, including distributed antenna systems.
Nokia already offered wireless infrastructure services in the United States, but the company has relied on subcontractors to perform a number of services. Ricky Corker, executive VP of North America for Nokia Networks, said that Nokia wanted to acquire a high-quality provider that could “self-perform” much of the work that Nokia has previously subcontracted.
“We’re seeing a trend in which operators are moving away from sub-contracting their network implementation services and opting instead for a direct service provider or ‘self-perform’ model,” said Corker. “SAC Wireless does this very well.”
Scale versus local expertise
Working with smaller firms can give carriers a leg up with local regulatory officials and construction firms, but it can also make it harder to control costs and quality. Now carriers are favoring larger contractors and leaving it to them to leverage the local resources.
“It’s kind of like the old trend of wide tie/skinny tie in men’s fashion,” said Jeff Lewis, CEO of Verticom. “Centralization versus decentralization. Right now the trend is more toward working with the bigger regional super companies. They [the carriers] want to work with one vendor and hold us accountable.”
“As new network densification technologies are introduced, we believe there will be a need for shortened deployment timelines and the ability to self-perform will become increasingly critical,” said Bill Koziel, president and CEO of SAC Wireless. SAC Wireless, which has about 500 employees, will operate as a wholly owned subsidiary of Nokia.
The pressure to self-perform is a driver of consolidation in the wireless infrastructure services space. Earlier this year Jacobs Engineering purchased FMHC, and MasTec acquired Dynis, the founder of Warriors 4 Wireless. This summer Nokia announced its purchase of SAC Wireless and BlueStream Professional Services bought Tempest Telecom’s DAS assets.
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