Telecommunications Network Operators: 4Q23 Market Review European telcos and China Mobile steer revenue uptick, as capex downtrend persists; industry headcount drops to 4.5 million

Telecommunications Network Operators: 4Q23 Market Review European telcos and China Mobile steer revenue uptick, as capex downtrend persists; industry headcount drops to 4.5 million

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 4Q23. For the full-year 2023, telcos represented $1.77 trillion (T) in revenues (-0.7% YoY), $263.1 billion (B) in labor costs (3.0% YoY), and $315.1B in capex (-3.6% YoY). They employed approximately 4.50 million people as of December 2023, down 1.5% from the prior year.

Revenues: Telco topline posted a modest growth of 1.7% on a YoY basis to post $445.3 billion (B) in the latest single quarter ending 4Q23. Revenues for the full-year 2023 were $1,775.8B, down 0.7% YoY over the previous year.

Capex: Capex spending declined by 4.1% on a YoY basis to post $85.9B in the latest single quarter ending 4Q23. Capex for the full-year 2023 was $315.1B, down 3.6% YoY over the previous year. At the operator level, five of the top 20 best performing telcos by capex growth for the full-year 2023 include Airtel (34.3%), Comcast (25.5%), Charter Communications (18.5%), KDDI (13.1%), and Telefonica (9.9%).

Opex and labor costs: Total opex for the telecom industry in the year 2023 stood at $1,504.8B, a decrease of 1.5% over 2022. Excluding depreciation and amortization (D&A) costs, total opex declined by 1.1% on YoY basis to record $1,169.5B in the year 2023. One significant element of telco opex is labor costs, which include salaries, wages, bonuses, benefits, and retirement/severance costs. Labor costs grew by 3.0% YoY in 2023, pushing labor costs as a percentage of opex (excluding D&A) up from 21.6% in 2022 to 22.5% in 2023.

Profitability margins: Both EBITDA and EBIT margins witnessed a slight improvement in the year 2023 when compared to 2022

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