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Wednesday, August 4, 2021
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Digital Telcos: Capex, Profit and Invested Capital

Digital Telcos: Capex, Profit and Invested Capital

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In 2007, Apple launched its first iPhone. That took the world of consumer electronics by storm and popularized the notion of 3G. In the years that followed, Google, Samsung, Huawei and many other mobile phone manufacturers followed suit and brought about a whole new era of mobile communication – one that goes beyond traditional voice and text.

OTT services such as Skype, WhatsApp, WeChat, iMessage and many other applications followed, pushing global Teleco operators to evolve their business model. The composition of ARPUs (Average revenue per users) and ARPS (Average revenue per SIM) morphed over the years. Topics such as OTT cannibalization, data monetization, ARPU erosion started becoming top of mind for industry players and observers.

Despite that, Telcos operators embraced an era of exponential growth in mobile user penetration and data consumption. To meet demand and increasing expectations of consumers, operators invested heavily in cell towers, core-backbone fiberization and network densification. National governments did not want to miss the boat and have progressively sought to capture value through various extent of spectrum license price adjustments.

More recently, the talks of 5G network rollout and Network Feature Virtualization (“NFV”) have caught attention once again. This time round, Telcos are not just looking to benefit from an industry shift driven by consumer electronics. Investments are targeted (and staged) at maximizing potential from 5G.

Have these investments paid off for Telcos? What abo  ut 5G and capex investments in the last 3 years? Who has invested the most? 

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