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The key metric for telecoms is ARPU - average revenue per user. Net profit is a pointless number. Ebitda margins are something like 36% for verizon from a recen

The key metric for telecoms is ARPU - average revenue per user. Net profit is a pointless number. Ebitda margins are something like 36% for verizon from a recent google search. From my time making telecom comparables - you want to be America. American ARPU numbers aresignificantly higher that the world average. America had something like $40 in 2006, to $35 in 2016. IN contrast, Germany has 14$ today, and Asia something around a $1 - $3. https://www.strategyand.pwc.com/media/file/An-industry-at-risk.pdf https://www.strategyand.pwc.com/media/file/An-industry-at-ri... Dont have access to any industry finance/research papers. America telecom is moribund, To argue otherwise is to mislead. Google failed to change the market. Despite dumping huge amounts of money into it, something no other firm can afford to do. Where it entered, incumbents magically were able to offer better services which they had avoided providing. THis HBR report reads like MBA speak, more a lesson on spin than actual fact. Remember when these firms hid zip code information in auctions so that they wouldnt cross bid? I read the history of American telecom with bemusement, the lessons highlighting the necessity to build good regulatory frameworks so that the economy can work efficiently. Finally - Building fibre is difficult, even in developing countries. The fact that you have regulation stopping people from tearing up the road, or just having wires crossing over houses willy nilly is the happy cost of being a civilized nation.

rayiner 8y ago
> The key metric for telecoms is ARPU - average revenue per user. Net profit is a pointless number. Ebitda margins are something like 36% for verizon from a recent google search. OP’s assertion was that because fiber service is much more expensive in the US than in Romania, American telecoms must be making huge profits on it. ARPU—which ignores costs—is useless for analyzing that assertion. EBITDA margin is also useless for looking at telecom profitability because it’s exclusive of depreciation and interest. Telcos spent tens of billions of dollars on fiber that’s sitting in the ground depreciating. EBITDA ignores that. If anything, looking at EBITDA shows you how dismal the economics of wireline really are. People have this idea that wireline networks are free money after paying for the initial build. In reality, 2/3 of every dollar you pay in service charges goes to ongoing expenses, even before you start accounting for the cost of building the network in thr first place.

rayiner 8y ago

> The key metric for telecoms is ARPU - average revenue per user. Net profit is a pointless number. Ebitda margins are something like 36% for verizon from a recent google search. OP’s assertion was that because fiber service is much more expensive in the US than in Romania, American telecoms must be making huge profits on it. ARPU—which ignores costs—is useless for analyzing that assertion. EBITDA margin is also useless for looking at telecom profitability because it’s exclusive of depreciation and interest. Telcos spent tens of billions of dollars on fiber that’s sitting in the ground depreciating. EBITDA ignores that. If anything, looking at EBITDA shows you how dismal the economics of wireline really are. People have this idea that wireline networks are free money after paying for the initial build. In reality, 2/3 of every dollar you pay in service charges goes to ongoing expenses, even before you start accounting for the cost of building the network in thr first place.