Telecom Network Operators: 2Q23 Market Review

Telecom Network Operators: 2Q23 Market Review

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 2Q23. In the annualized 2Q23 period, telcos represented $1.76 trillion (T) in revenues (-5.1% YoY), $252.2 billion (B) in labor costs (-4.0% YoY), and $325.0B in capex (-2.0% YoY). They employed approximately 4.56 million people as of June 2023, down 1.2% from the prior year.

Capex declined again in the latest single quarter after managing a recovery of sorts in 1Q23. Telcos in the US, China, and Europe are moving past peak 5G capital investment levels and are looking to bolster their finances amid declining top-line, macro pressures, and slowdown concerns. Capex declined by 5.8% on a YoY basis – the steepest fall since 2Q20 – to post $76.0B in 2Q23. The sharp decline in the latest quarter also knocked down the annualized capex, falling by 2.0% YoY to post $324.9B in 2Q23. This decline impacted annualized capital intensity which came off the highs from 18.7% in 1Q23 to total 18.5% in 2Q23; this ratio is still among the highest ever for the industry, however. Increased fiber roll-out and upgrade activities to support fixed broadband and to connect all the new radio infra (including small cells) needed for 5G, coupled with continued expansion of 5G in major markets like India, have aided annualized capital intensity to hover near record high levels.

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