Global Telecommunications Network Operators Market Review: 1Q23 Financial Stats for 139 Telcos - Telco' Revenues Decline Continues but Slows

Dublin, Sept. 06, 2023 (GLOBE NEWSWIRE) -- The "Telecommunications Network Operators: 1Q23 Market Review" report has been added to * ResearchAndMarkets.com's* offering.

This report reviews the growth and development of the telecommunications network operator (TNO, or telco) market. The report tracks a wide range of financial stats for 139 telcos across the globe, from 1Q11 through 1Q23. In the annualized 1Q23 period, telcos represented $1.76 trillion (T) in revenues (-6.3% YoY), $253.8 billion (B) in labor costs (-5.4% YoY), and $322.6B in capex (-1.5% YoY). They employed approximately 4.55 million people as of March 2023, down 1.9% from the prior year.

*Telco Revenues in 1Q23: Decline Continues but Slows*

In the first quarter of 2023 (1Q23), the global telecommunications (telco) industry experienced its sixth consecutive year-on-year (YoY) decline in revenues, which decreased by 3.5% to reach $448.3 billion. While this decline marked the continuation of a trend, it also indicated a moderation in the rate of decline when compared to the previous three quarters, which saw YoY declines of 6%, 6%, and 9% in 2Q22, 3Q22, and 4Q22, respectively. Notably, the prominent Chinese telcos, including China Mobile, China Telecom, and China Unicom, reversed their topline declines from the previous quarter, contributing to the milder downturn.

*Downturn's Impact on Annualized Figures*

The persistent downward trajectory in the previous quarters, combined with 1Q23's contraction, significantly affected annualized figures. The revenues for the annualized period of 1Q23 totaled $1,763.4 billion, reflecting a YoY decrease of 6.3%. This decline was the most substantial contraction recorded over a 12-month period since at least 2011. Factors such as currency fluctuations, inflation pressures, and AT&T's spinoff of its WarnerMedia unit in April 2022 influenced the market's performance.

Additionally, a strong dollar had a particularly pronounced effect on regions like Japan, where the revenues of major companies such as Softbank, KDDI, and NTT plummeted by 13.7%, 13.5%, and 10.2% YoY, respectively. Inflation and energy crisis-related factors also contributed to revenue declines for companies like BT (-12.5%) and Vodafone (-10.2%).

*Mixed Performance Among Top Players*

Among the top 20 telcos based on annualized 1Q23 revenues, Airtel exhibited the strongest growth, posting a 10.4% increase. Notably, Airtel was the only company within this group to achieve double-digit growth during the annualized period. The growth can be attributed to rising average revenue per user (ARPU) and an expanding service subscriber base in the domestic market, driven by preparations for the transition to 5G.

Several other companies among the top 20 also reported revenue growth during the annualized 1Q23 period, including Saudi Telecom (6%), Charter Communications (4%), and Chinese giants China Mobile (2.9%), China Telecom (2.1%), and China Unicom (1.7%), along with Verizon (1.4%). Notably, the growth seen by the Chinese companies was primarily due to increased revenues from their "emerging businesses," encompassing areas like cloud computing, big data, internet data centers, and the Internet of Things (IoT).

*Capital Intensity and Investment Trends*

Capital expenditures (capex) experienced a modest recovery in 1Q23, growing by 0.8% YoY to reach $77.7 billion. Despite this growth, the overall annualized capex for the same period declined by 1.5% YoY to total $322.6 billion.

This decline did not prevent the annualized capital intensity from reaching a new peak at 18.3%, reflecting a record high. Contributing factors included increased investments in fiber deployment, fixed broadband, and the expansion of 5G networks, particularly in markets like India.

*Digital Transformation for Profitability*

Despite the revenue decline, telcos have maintained a level of profitability by effectively managing costs, resulting in steady earnings before interest and taxes (EBIT) and EBITDA margins. Even amid macro pressures, investments, and revenue stagnation, the EBIT margin stood at 15.2%, while the EBITDA margin was 34.5% in the annualized 1Q23 period. Efforts to optimize cost structures through digital transformation, automation, and collaboration with technology providers are expected to be the path to sustainable profitability in the industry.

*Labor Cost Trends and Workforce Evolution*

With a focus on efficiency, telcos have been reducing their headcounts while investing in training programs for their workforce. The industry headcount was reduced to 4.55 million in 1Q23, from 4.65 million the previous year, with further reductions anticipated. Despite these efforts, per-employee labor costs have risen slightly from $57.3K in the annualized 1Q22 period to $55.3K in the corresponding period of 1Q23.

This trend is influenced by factors such as exchange rate volatility, which may lead to upward pressure on labor costs. Despite headcount reductions, telcos recognize the importance of a skilled workforce for their future success, leading to investments in training and development programs.

*Regional Revenues and Capex Dynamics*

The Americas region, which had been the largest revenue generator for several quarters, ceded that position to Asia in 1Q23. On the other hand, the Americas region continued to outspend Asia in capex, driven by the growth of cable companies and telcos. While most regions, excluding the Middle East and Africa, experienced revenue declines in 1Q23, the Americas and the Middle East and Africa witnessed an increase in annualized capital intensity. This trend is driven by factors such as 5G network expansion and fiber deployment activities, contributing to the overall landscape of the global telco industry.

*Companies Mentioned*

· A1 Telekom Austria
· Advanced Info Service (AIS)
· Airtel
· Altice Europe
· Altice USA
· America Movil
· AT&T
· Axiata
· Axtel
· Batelco
· BCE
· Bezeq Israel
· Bouygues Telecom
· BSNL
· BT
· Cable ONE, Inc.
· Cablevision
· Cell C
· Cellcom Israel
· CenturyLink
· Cequel Communications
· Charter Communications
· China Broadcasting Network
· China Mobile
· China Telecom
· China Unicom
· Chunghwa Telecom
· Cincinatti Bell
· CK Hutchison
· Clearwire
· Cogeco
· Com Hem Holding AB
· Comcast
· Consolidated Communications
· Cyfrowy Polsat
· DEN Networks Limited
· Deutsche Telekom
· Digi Communications
· DirecTV
· Dish Network
· Dish TV India Limited
· DNA Ltd.
· Du
· EE
· Elisa
· Entel
· Etisalat
· Fairpoint Communications
· Far EasTone Telecommunications Co., Ltd.
· Frontier Communications
· Globe Telecom
· Grupo Clarin
· Grupo Televisa
· Hathway Cable & Datacom Limited
· Idea Cellular Limited
· Iliad SA
· KDDI
· KPN
· KT
· Leap Wireless
· LG Uplus
· Liberty Global
· M1
· Manitoba Telecom Services
· Maroc Telecom
· Maxis Berhad
· Megafon
· MetroPCS Communications
· Millicom
· Mobile Telesystems
· MTN Group
· MTNL
· NTT
· Oi
· Omantel
· Ono
· Ooredoo
· Orange
· PCCW
· PLDT
· Proximus
· Quebecor Telecommunications
· Rakuten
· Reliance Communications Limited
· Reliance Jio
· Rogers
· Rostelecom
· Safaricom Limited
· Sasktel
· Shaw
· Singtel
· SITI Networks Limited
· SK Telecom
· Sky plc
· SmarTone
· SoftBank
· Spark New Zealand Limited
· Sprint
· StarHub
· STC (Saudi Telecom)
· SureWest Communications
· Swisscom
· Taiwan Mobile
· Tata Communications
· Tata Teleservices
· TDC
· TDS
· Tele2 AB
· Telecom Argentina
· Telecom Egypt
· Telecom Italia
· Telefonica
· Telekom Malaysia Berhad
· Telenor
· Telia
· Telkom Indonesia
· Telkom SA
· Telstra
· Telus
· Thaicom
· Time Warner
· Time Warner Cable
· TPG Telecom Limited
· True Corp
· Turk Telekom
· Turkcell
· Veon
· Verizon
· Virgin Media
· Vivendi
· Vodafone
· Vodafone Idea Limited
· VodafoneZiggo
· Wind Tre
· Windstream
· Zain
· Zain KSA
· Ziggo
· Masmovil

For more information about this report visit https://www.researchandmarkets.com/r/ktucpt

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