Rethinking Fiber Deployments: Why Providers Are Moving Beyond Turnkey Services
Nov 12, 2024
Raj Tank
As fiber-to-the-home (FTTH) deployments accelerate worldwide, telecom leaders are grappling with a crucial question: is the traditional turnkey model the best approach going forward? Many small and large fiber companies are indeed moving away from turnkey providers that handle every project aspect, opting instead for direct sourcing of specialized vendors.
This shift reveals an important trend in the industry. So what's driving fiber providers to reevaluate turnkey services? And what advantages are they finding in direct sourcing models? Let's explore the key reasons behind this strategic change.
Greater Control Over Quality and Customization For many fiber providers, the appeal of direct sourcing lies in the increased control over each stage of the deployment. Turnkey solutions package every project component—planning, engineering, project management, and construction—under a single provider's oversight. While this structure centralizes management, it also limits your control over individual project phases and their unique requirements.
In contrast, direct sourcing enables you to select specialized vendors for each part of the project, ensuring that each phase is handled by an expert who can provide the specific level of customization your deployment needs. For instance, you might choose:
An engineering firm with deep experience in local jurisdictions for navigating the permitting process efficiently
A construction team with a proven track record in high-quality fiber builds
A project management firm that excels at field oversight and dynamic scheduling
This approach allows for more detailed oversight, giving providers the flexibility to adjust plans, timelines, and priorities as the project progresses.
This approach allows for more detailed oversight, giving providers the flexibility to adjust plans, timelines, and priorities as the project progresses.
Stronger Accountability Through Checks and Balances
One of the most significant drawbacks of turnkey services is the reduced accountability across project phases. A single turnkey provider is responsible for the entire process, creating a "black box" effect where all decisions, quality checks, and standards are internal. This lack of transparency can make it difficult for providers to hold turnkey vendors accountable or verify quality throughout the deployment.
Direct sourcing naturally fosters a system of checks and balances. With separate vendors overseeing different phases, each one indirectly evaluates the others:
Crucially, this includes rigorous field verification to ensure the labor, equipment, and unit pricing reported aligns with what is actually being delivered on-site. This "checks and balances" approach prevents general contractors from potentially abusing pricing or using substandard materials to boost their own profits.
Aligning Interests of Provider and Customer
Another key benefit of direct sourcing is that it empowers the customer (fiber provider) to have full visibility and control over each phase of the deployment. There are no informational barriers, allowing the customer to actively monitor timelines, costs, and quality to ensure the project is being executed in their best interests - not just optimizing for the general contractor's bottom line. This ownership over the process is critical when the interests of the GC and customer may not be fully aligned.
Cost Savings Through Competitive Vendor Selection
Turnkey providers often add a premium to their services to account for bundling, coordination, and project management responsibilities. For many fiber companies, especially those with tight budgets or aggressive ROI targets, this premium can strain the project's financial viability. With direct sourcing, companies gain the flexibility to negotiate individually with each vendor, securing competitive rates without added administrative costs from a central provider.
Direct sourcing also enables providers to allocate resources more precisely:
Benefits of Direct Sourcing for Cost Savings:
Negotiate competitive rates with individual vendors
Invest resources where most needed, rather than paying for bundled services
Achieve high-quality builds without inflating project expenses
Enhanced Transparency and Flexibility
Transparency is another critical reason why fiber providers are moving away from turnkey services. With turnkey solutions, it's common for costs and decisions to be bundled, making it difficult to understand the breakdown of each service. This can lead to frustration, as it obscures inefficiencies and limits a provider's ability to optimize resources and justify expenses.
Direct sourcing offers the benefit of full transparency at every stage of the deployment. Each vendor provides:
Itemized costs
Detailed project timelines
Specific deliverables
This level of insight is particularly valuable when managing complex deployments, as it enables providers to identify potential cost savings and eliminate redundancies. Additionally, with direct sourcing, replacing an underperforming vendor is much easier, helping ensure the project stays on track.
Leveraging Specialized Expertise
FTTH deployments require specialized knowledge across planning, engineering, field project management, and construction. A turnkey provider may not always bring deep expertise in each area, instead relying on generalists or subcontractors who may lack experience with complex fiber projects. This can impact the quality of the build, especially in challenging environments.
Direct sourcing enables providers to select best-in-class experts for each component, such as:
An engineering firm with extensive regulatory compliance knowledge
A construction team with proven fiber installation expertise
Project management specialists excelling in field oversight
This approach ensures that each phase is handled by industry veterans who bring valuable insights, raising the overall quality and reliability of the deployment.
Building In-House Capabilities
With turnkey projects, fiber companies may be left with limited knowledge transfer at the end of the deployment, as the turnkey provider often manages all documentation and processes. This can be a disadvantage for companies that want to build internal capabilities, as they lack the operational insights needed to maintain, troubleshoot, or expand the network after the turnkey provider exits.
Direct sourcing, by contrast, fosters closer relationships with each vendor, allowing internal teams to learn throughout the project. This hands-on knowledge can be leveraged for future network management, including:
Maintenance and troubleshooting
Network expansion and upgrades
Improving operational efficiency
A Clear Industry Shift
The advantages of direct sourcing are becoming increasingly evident as fiber providers seek more control, transparency, and flexibility. By strategically sourcing specialized vendors, companies can create high-quality, cost-effective networks tailored to their unique needs and priorities. As FTTH deployments continue to surge, this shift away from turnkey services is likely to shape the industry for years to come, helping telecom leaders meet the rising demand for high-speed internet and lay the groundwork for a connected future.
