Board benefits: the value of private businesses adopting public company tools

When three Delaney brothers came together in 1975 to found the company that would become Delmec, they were focused on building a strong local business. At that stage, before the era of modern telecommunications, they probably wouldn’t have dreamed of operating across three continents.

And yet here we are, almost fifty years later, with offices all around the world. While our HQ remains in Carlow, Ireland, we now have teams in the Democratic Republic of Congo, Tanzania, South Africa, Poland, Pakistan, and the Philippines.

This has led to an interesting situation, in which we effectively straddle two worlds: we’re a family-based private business that operates on the scale of a global public company.

Private company structure

Many entrepreneurs dream about ‘going public’ with the company they’ve built — we’ve all seen movie characters ring the bell on the New York Stock Exchange trading floor. But keeping a company private is an increasingly popular option: in the US, the number of publicly listed companies dropped by 52% from the late 1990s to 2016.

Why? Well, control is usually a big reason why companies choose to stay private. Over the years, Delmec has faced many different challenges, from the economically bleak 1980s, to the global recession of 2008, all the way to the devastating pandemic of recent years.

We’ve weathered these storms by staying true to our core values: bravery, proactivity, teamwork, and smart, solution-based thinking. In every situation, our executive leadership makes the best decisions possible based on our commitment to our colleagues, our clients, and our customers — not external shareholders, equity-fund owners, or the vagaries of a tumultuous stock market. That sort of self-determination is invaluable to us, and not something we’re interested in giving up.

Public company tools

That said, there are benefits that come with taking a company public.  Chief among these is the injection of capital funds, of course, which allows for greater expansion, R&D, and myriad other progressions. Preparing to issue a prospectus for going public can be a challenging and costly process, but it’s also an opportunity to thoroughly interrogate what’s working within a company — and what isn’t. The market tends to have a quick and sometimes devastating reaction in the case of the latter, as seen in some well-known failed IPOs of recent years.

There is a complex framework of rules and regulations surrounding public companies, designed to protect the ordinary shareholder. This extra layer of oversight, while expensive to manage, usually results in a more tightly-organised structure to the business. Most legal systems also require public companies to appoint an independent board of directors. This can lead to friction, of course — not every outside board member will have the same understanding of the business as its founder, or key executives — but it also brings ‘fresh eyes’ and varied experiences to the table.

The best of both worlds

Here at Delmec, with our engineering backgrounds, we’re always looking to shape unique solutions to common challenges. That’s the kind of thinking that led to us choosing a hybrid approach to our company’s leadership: cherry-picking the best elements of a public and private company to ensure our continued success.

More than three years ago, we designed a multi-layered board structure based on groups of shareholders, management teams and appointed employees. Board members have varying responsibilities, from setting high level company OKRs to implementing strategy and tracking individual KPIs. We put together a charter that includes a list of requirements, and a framework for our quarterly meetings.

One of the most important decisions we made is to create a board of advisors, which includes industry stalwarts who bring exceptional knowledge, skills and expertise to Delmec, as well as key networking opportunities and guidance on governance and strategy. Above all, they lend valuable new perspectives — those ‘fresh eyes’ that usually benefit public companies.

Scaling new heights

Delmec is growing faster than ever before, with new opportunities emerging within the market for alternative networks. Taking this ‘best of both worlds’ approach allows us to continue to offer the uniquely personal service that comes with a private, tightly-knit organisation, while scaling at a level usually seen in public companies.

From three Irish brothers to a global workforce comprising more than 20 nationalities, Delmec has always believed that collaboration, partnership, and synergy is what drives success. Now, as we welcome to our boards some of the brightest and best minds in the industry, the sky’s the limit.


Global Telecoms Infrastructure in a Recession — What Might Happen?

Here at Delmec, we’re always looking to the future. The world of global telecommunications moves fast, and it’s important that we’re prepared for every eventuality. This week, our board has been focused on one big question: how will the predicted recession affect global telecoms infrastructure rollout and investment?

Continued Demand

It’ll come as no surprise to those of us in the field that the demand for network expansion remains strong. A recent Gartner report indicated that general investment in digital transformation will continue, particularly in the areas of cloud computing, artificial intelligence, automation, and the internet of things (IOT). Media headlines appear to confirm this stance, with CNBC reporting that “Despite recession fears, companies aren’t pulling back on technology investments” with tech leaders understanding “that technology is not a cost center (sic), but rather a business driver.”

Nokia and Ericsson seem to be on the same page, as they’ve budgeted to continue their 5G rollout. The push for network expansion and improvement comes not just from the public, but also from funders whose tech investments require more capacity. That said, the recession will likely result in less spend, which will mean a slowing-down of rollout.

Reduced Revenue

The development of sustainable projects, cloud-based networks and open RAN is expected to progress, with Omdia forecasting total telecoms revenue (including mobile and fixed broadband services), to grow “from $1.1tn in 2021 to $1.3tn in 2027 at a CAGR of 2.2%.” However, there may be an adjustment in store if the recession’s effects are felt sooner rather than later.

MNOs are likely to be affected more so than towercos because of pressure on ARPUs as consumers tighten their collective belts. For example, people will look to save money, Omdia analysts say, by “shifting to lower tariffs, sacrificing their mobile data allowance, and using Wi-Fi instead.” The knock-on effect, of course, will be a serious demand for more cost-effective networks.

Challenges Ahead

So what does this mean for businesses like Delmec? Well, there will be challenges for sure, particularly with reduced revenue levels and increased pressure for cost and carbon savings. Some of our clients will feel these changes more acutely than others, and the earlier they begin to prepare, the better. This is where our superior portfolio management services are of particular benefit, as are our data-collection and analysis skills. The old adage that information is power may become truer than ever as we all look to find new ways to curb costs while continuing to progress as an industry.

Commentators are expecting developing markets to be hit harder by this recession, but our instinct — based on decades of experience in these territories — is that their telecommunications sectors will be more resilient than predicted. With this in mind, we’re working closely with affected clients to make sure they’re in the strongest possible position going into these uncertain times.

Opportunities Persist

As always, there will be some silver linings ahead too. The ever-increasing focus on sustainable products and services is likely to bring market stimulation in the form of investment, innovation, and activity. The continued drive towards Open RAN technology is helping to break down barriers, making progress more affordable and accessible to the smaller players.

Funding and managing this in straitened circumstances may lead to new pressure to adopt more netco models, which Deloitte says are “regarded as low-risk businesses that will generate steady cash flows over long periods by leasing their infrastructure to service providers.”

Overall, we’re confident here in Delmec that there’ll still be plenty of potential to grow in this market. We’ll all just need to be more shrewd in what we choose to do. If we do enter a recessionary period as expected, it won’t be the first for our 50-year-old company. We’ll weather this storm too, by working together with our clients to make sure that synergy shapes success, no matter how tough the economic environment might get.