The Race to the Bottom: How Telecom Contractors Are Undermining Their Own Success
Part 2 of 3 in the “Telecom Contractor Survival Series”
Last week, we exposed how prime contractors squeeze their subs with unfair splits, vague directives, and payment delays. This week, we shift focus inward—on a problem contractors bring upon themselves: the race to the bottom on pricing.
The Unsustainable Bidding War
Telecom has become a pricing deathmatch. Subs undercut each other, hoping to land the next build. And while that might win short-term work, it's doing long-term damage—both to their businesses and to the integrity of the industry.
Telecom OSP work isn't commodity labor. It requires specialized crews, high-risk construction, traffic control compliance, complex permitting, and precise engineering. Trying to win projects by shaving margins to the bone turns skilled telecom operations into a volume game—and that’s a dangerous game to play when you're bearing all the construction risk.
Four Reasons This Race is Killing Contractor Viability
1. No Room for Real-World Risk
Fiber splicing delays, missed locates, last-minute reroutes, rock hits, ROW issues—these are everyday occurrences in the field. On a project bid too thin, one bore gone wrong or permit hang-up wipes out your profit. And most ISP's unit pricing doesn’t account for half the real-world contingencies (ESPECIALLY work done for CATV's).
2. It Tanks Quality—and Your Reputation
Low-bid contractors often compensate by:
Using non-industry approved materials
Hiring inexperienced labor
Skipping OTDR testing and documentation
Skimping on restoration or grounding compliance
That leads to callbacks, rejected redlines, and in some cases, lost pole attachment rights. When quality goes, the whole network suffers—and the contractor’s name takes a hit.
3. It Bleeds Your Workforce
Underpriced projects force you to push crews harder for longer with less. This leads to:
High turnover
Burnout
Safety violations
Sloppy workmanship
When experienced linemen, engineers, drillers/locators, and fiber techs walk, you’re left rebuilding with green labor and retraining at your own cost.
4. It Attracts Clients Who Only Care About Price
These clients often:
Demand 30–90 day payment terms
Change scope without change orders
Reject minor overages on unit invoices
Blame you for third-party delays
They're high-friction and low-value, and they view you as a vendor—not a partner.
It's Not Just a Subcontractor Problem
The biggest GCs in telecom are setting these floor-level pricing standards, knowing subs will race each other to the bottom to stay afloat. The result? Industry-wide erosion of standards, margins, and long-term sustainability.
This affects not just contractors—but network owners. When builds are rushed and under skilled, fiber plants degrade faster, drop rates rise, and long-term O&M costs explode.
How We Break the Cycle
1. Price Reality, Not Optimism Use accurate labor units when you bid, and factor in:
Traffic control costs
Environmental restoration
Utility locates
Field engineering variance
2. Educate the Client Don’t just present your number—justify it. Break out:
Material types (RUS spec vs. low-grade)
Labor hours per bore or pull
Restoration standards per DOT code
Equipment needed for HDD, trench, aerial, etc.
Make the client choose between a price and a process.
3. JUST SAY NO If you're talking to a prime, MSA holder, or even an ISP, and they demand you work off of a price sheet that can't truly make you money, just walk away. Remember, bad money is too expensive to say yes to! If everyone did this, they would be forced to raise their rates to more reasonable levels. Or even do like it use to be, and you bid on the job with your own price. Not work off some made up numbers by people in PE and VC firms who wouldn't know an OTDR from a twisted pair.
3. Stand Your Ground If a scope requires two vaults, a bore pit, and traffic control at a 4-lane intersection, price it accordingly. If the client balks—walk. Bad work at a bad price will always cost you more than no work.
4. Collaborate, Don’t Cannibalize Start aligning with peer contractors. Share rate sheets. Discuss pricing floors. Advocate for regional labor baselines with primes and carriers. A rising tide lifts all splicers.
Coming Next: Building a Sustainable Telecom Future
In part 3, we’ll cover:
How to structure a business around steady growth (not bid volume)
What to track to stay profitable (labor units, job costs, yield per crew)
How to negotiate from strength—not desperation
If this feels like your experience on the ground, you’re not alone—and you’re not powerless. Share this article with your team, your peers, or even that GC who still thinks fiber drops cost $15.
Stay tuned.
By: Mark Ramsey