Bharti Airtel Reports Remarkable Growth

Bharti Airtel reported a 18% year-on-year increase in revenues on an underlying basis for the quarter ending March 31. For the year to March 31, revenues were up almost 11% to 875 billion Indian rupees (11.56 billion US dollars). In India, mobile revenues rose 22% in the quarter led by an increase in the operator's 4G customer base coupled with improved tariffs. Airtel said that mobile ARPU for the quarter was 154 rupees (2.04 dollars) up from 123 rupees a year earlier, underlining that the disruptive price wars in India's telecoms sector are now over. Source: Airtel statements. 

Cash Cushion for U.S. Telcos

For the big four telcos in the U.S., net cash from operating activities has been on an upward march, thanks in part to tax reforms.  The operations of America’s top four telcos generated 101 billion dollars in 2019, up from 73 billion dollars in 2017 (after tax and interest payments). Although the COVID-19 crisis is hitting some revenue streams, such as roaming, these figures suggest the U.S. telecoms industry will weather the storm quite well.

Over the past four years, AT&T’s operations have generated by far the most cash of the four big telcos, consistently over 35 billion dollars each year, while Verizon has bounced back strongly on this metric after a weak 2016 and 2017.

Historically, T-Mobile US, which has just merged with Sprint, has struggled to generate large amounts of cash, primarily because it has used low prices to win market share gains. Still,  T-Mobile US generated almost 7 billion dollars from its operations in 2019, up from less than 4 billion dollars in 2018. In the first quarter of 2020, this metric was up 16% year-on-year to 1.6 billion dollars.

Pringle Media has just published a 50 page report tracking and comparing the key financial metrics of the four big U.S. telcos over the past five years: Screen shots of eight sample pages below.

If you would like to purchase a PDF copy of the report, priced at $100 for a company-wide license, please send an email to pringled@btinternet.com

U.S. Telcos Keep Capex in Check

America’s top four telcos are collectively investing significantly more in property, plant and equipment ($48 billion in 2019) than they were in 2010 ($42 billion). But the aggregate capital intensity (excluding spectrum licenses) of the big four is now hovering around 12.5% - much lower than in Europe where the big telcos invest about 17% of revenues.

Since 2017, the collective capital intensity of the U.S. telcos has been slipping, as AT&T has bet big on the entertainment sector. Verizon is now putting pressure on AT&T by upping its capital spending as it vies for supremacy in 5G.

During the past five years, Sprint (now part of T-Mobile US) has been the clear laggard, investing just $20 billion in capex. Even together, T-Mobile US and Sprint are investing just two-thirds of Verizon's capex budget.

Pringle Media has just published a 50 page report tracking and comparing the key financial metrics of the four big U.S. telcos over the past five years: Screen shots of eight sample pages below.

If you would like to purchase a PDF copy of the report, priced at $100 for a company-wide license, please send an email to pringled@btinternet.com

Germany Steps Up as U.S. Slows Down

Deutsche Telekom reported a 1.1% year-on-year rise in revenue to 19.9 billion euros for the first quarter, excluding the impact of changes in exchange rates. In the U.S., growth slowed to just 0.7% as T-Mobile US saw "declines in terminal equipment revenue as a result of the impact of the coronavirus pandemic." T-Mobile US has just completed a merger with rival Sprint.

In Germany, DT's revenue rose 0.9%, while in the rest of Europe growth was 0.4%. With 83,000 new broadband customers, DT said the first quarter marked its best result in two years in Germany.  It also attracted 60,000 new users to its MagentaTV service.

Still, DT expects the pandemic to have "limited impact on revenue, due to, for example, the closure of shops, lower roaming revenues, and companies postponing or canceling IT projects. On the other hand, voice telephony  revenue is increasing, for instance, and the mobile churn rate is falling." The Group confirmed its guidance for the current financial year.

In the first three months of 2020, DT added 208 new LTE cell sites to its network in Germany, while 534 cell sites have been upgraded with additional LTE antennas. It is aiming to bring 5G to at least 20 of the largest German cities by the end of 2020. DT also said that more than 200 million people in over 5,000 towns, cities, and municipalities across the United States are now reached by T‑Mobile's  5G network. Source: DT statements

Vodafone's Performance Picks Up

Vodafone reported a 1.6% year-on-year rise in service revenue for the quarter ending March 31 on an organic basis. A 0.4% decline in Europe, was more than offset by a 7.9% rise in the rest of the world. The group-wide performance was a marked improvement on the previous three quarters.

The company said: "The economic impact of the COVID-19 pandemic in our markets, whilst uncertain, is likely to be significant. Whilst our business model is more resilient than many others, we are not immune to the challenges. We are experiencing a direct impact on our roaming revenues from lower international travel and we also expect economic pressures to impact our customer revenues over time. However, we are also seeing significant increases in data volumes and further improvements in loyalty, as our customers place greater value on the quality, speed and reliability of our networks." Source: Vodafone statement

With the release of Vodafone's annual results, Pringle Media has been able to update the report on the performance of Europe's big five telcos over the past decade. More here.

Europe's Top Telcos Stage Recovery

Europe's telecoms industry staged something of a recovery in 2019. The collective net cash flow generated by the operating activities of the big five telcos leapt to 69 billion euros up from 59 billion euros in 2018.  Deutsche Telekom led the way, while Telefónica, Orange, Vodafone  and Telecom Italia also saw an upturn in cash generation.

The aggregate operating income, net profit and return on capital employed of the big five also rose, but the industry is likely to remain under financial pressure in 2020 as the COVID-19 crisis hits enterprise revenues and telcos vie for leadership in 5G.

Pringle Media has just published a 60 page report tracking and comparing the key financial metrics of these five major telcos over the past decade: Screen shots of eight sample pages below.

Note, the Vodafone figures for the fourth quarter of 2019 have now been updated, as the company has now reported on that period.

If you would like to purchase a PDF copy of the report, priced at 100 euros for a company-wide license, please send an email to pringled@btinternet.com

Orange Reports Robust Results Despite Crisis

Orange Group reported a 1% year-on-year rise in revenues for the first quarter to 10.4 billion euros on a like-for-like basis. Revenues in Africa and Middle East grew by 6.2%, and in France by 0.5%. Enterprise revenues grew by 0.8% and Europe by 0.3%. Spain revenues declined by 2.4%.

The Paris-based group said: "Based on currently available information, Orange does not expect a significant deviation from its financial objectives for the fiscal year 2020, but will closely monitor developments."

Stéphane Richard, CEO of the Orange Group, added: “The importance of telecoms in this crisis in ensuring the continued functioning of the economy and of our societies confirms the strategic nature of our activities and provides further confirmation for our strategy in very high-speed networks. Our fibre deployment continues to accelerate with close to 40 million households now connectable to the fibre optic network, underpinning our strong commercial performance. In this quarter the number of fibre customers reached 7.8 million, up 20%."  source: Orange statements