Q3, 2018 Telecom Network Operators Market Review Featuring 125+ Vendors – ResearchAndMarkets.com

Network Operators: 3Q18 Market Review”
report has been added to ResearchAndMarkets.com’s

This market review provides a comprehensive assessment of the global
telecommunications industry based on financial results through September
2018 (3Q18). The report tracks revenue, capex and employee for 130
individual telecommunications network operators (TNOs). For a sub-group
of 41 large TNOs, the report also includes labor costs, opex and
operating profit. Our coverage timeframe spans 1Q11-3Q18 (31 quarters).

The telecom industry has changed drastically over the last decade, as
demand for data continues to surge due to smartphone proliferation and
expanding mobile infrastructure. During this period, TNOs have
diversified their service offerings and overhauled their operations to
meet the rising data demand. They have invested heavily in their
networks, employees, and acquisitions. Yet, operating margins have
fallen recently as labor cost pressures have cropped up.

Top-line revenues for the sector remain challenged, and TNO capex
requirements will continue to be high: even as networks become more
software-based, vendors have figured out how to charge for software (and
a range of related services). There are also late-2018 concerns of a
looming recession. Telcos face an uncertain future.

Key findings include:

  • Telco revenues fell by 0.7% YoY in 3Q18, to $452B. Revenues declined
    by an average annual rate of 0.5% from 2011-17 though, so this is
    consistent with past trends. Going forward, TNO top-line growth rates
    will more typically be in the 0-2% range.
  • On a revenue per employee basis, the telco sector has been stagnant
    since 2011: the figure was $360K that year, and averaging $355K for
    the last four quarters. Labor costs per employee grew 2% in 2017 to
  • Telcos employed 5.2M in Sep 2018, just up 1% YoY. We expect employee
    totals to begin declining in the next 1-2 years. India alone may cut
    up to 100K employees in that timeframe, due to Jio’s consolidation &
    BSNL reforms.
  • Capex for the 12 months ended Sept. 2018 was 16.5% of revenues, in
    line with the 16.6% recorded for 4Q16-3Q17. The highest it has been
    since 2011 was 17.8% in 1Q16 (annualized), when 4G buildouts were
    still important; there is opportunity for growth.
  • There are signs of a modest global capex surge, as capex has grown an
    average of 3% per quarter so far this year; early 5G buildouts are a
    factor. However, carriers are eager to cut heads, and most are
    evaluating options. Higher capital costs are often acceptable to TNOs
    if they allow for layoffs. Very often, layoffs are made out of
    urgency, and networks adjust after the fact.
  • The M&A climate remains strong for the sector. Noteworthy deals
    include the merger of T-Mobile and Sprint, merger of Vodafone India
    and Idea Cellular; and Vodafone’s $18 B acquisition of Liberty
    Global’s Germany and Eastern Europe cable and broadband assets.
    Annualized operating margins have fallen for four straight quarters.
    In 3Q18, the average TNO operating margin dropped 1% to 12.67%. Labor
    costs are one drive: annualized labor costs per employee have been
    rising, up 4.6% in 3Q18 to $55.7K (from $53.3K in 3Q17). As 5G
    approaches, TNOs will keep up the pressure on their staff spending.
    They will also continue to look for ways to reduce customer
    acquisition & retention costs, through both technology investments &
    business partnerships.

Key Topics Covered:

1. Abstract

2. Analysis

3. Key stats through 3Q18

4. Operator rankings

5. Rev, capex and headcount

6. Deep dive cost analysis

7. Subs & traffic

8. Exchange rates

9. About (including methodology)

Companies Mentioned

  • A1 Telekom Austria
  • Advanced Info Service (AIS)
  • AT&T
  • Axiata
  • Axtel
  • Batelco
  • Cellcom Israel
  • CenturyLink
  • CK Hutchison
  • Clearwire
  • Cogeco
  • Com Hem Holding AB
  • Comcast
  • Consolidated Communications
  • Cyfrowy Polsat
  • Elisa
  • Entel
  • Etisalat
  • Fairpoint Communications
  • Far EasTone Telecommunications Co. Ltd.
  • Frontier Communications
  • Maroc Telecom
  • Maxis Berhad
  • Megafon
  • Ooredoo
  • Orange
  • PCCW
  • PLDT
  • Sasktel
  • Shaw Communications
  • Singtel
  • SITI Networks Limited
  • SK Telecom
  • SureWest Communications
  • Swisscom
  • TDS
  • Tele2 AB
  • Telecom Argentina
  • Telecom Egypt
  • Telkom SA
  • Telstra
  • Telus
  • Thaicom
  • Time Warner
  • Vodafone
  • Vodafone Idea Limited
  • Wind Tre
  • Windstream
  • Zain KSA

For more information about this report visit https://www.researchandmarkets.com/research/5w3ct8/q3_2018_telecom?w=4


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Topics: Telecommunications
and Networks