MTN Consulting is focused on network operators & their technology supply chains, tracking the economics of the network operator business and assessing the big shifts that impact technology spending trends. Our coverage includes:

3 major network operator markets

  • Telecom Network Operator (TNO)
  • Webscale Network Operator (WNO)
  • Carrier-Neutral Network Operator (CNNO)

190+ operators

Across the three major network operator markets in all key regions

40+ time series

10+ years’ market- and operator-wise data across quarters and years starting 2011

~50 reports published per year

  • Market data and insight reports spanning –
  • quarterly market reviews
  • operator and vendor deep dives
  • benchmarking and strategic assessments
  • forecast/outlook analysis
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Latest report

Telco Opex Analyzer, 2016-20

MTN Consulting’s Telco Opex Analyzer analyzes the opex trends of a subset of key telcos in the telecommunications sector. The report’s dashboard allows a user to dig into overall spending levels, network’s contribution to opex, network-related capex, and profitability for a group of 21 individual operators. The report is designed to help vendors understand and plan for the needs of their customers and help network operators deploy their technology budgets wisely. The report's format is Excel. ABSTRACT Telcos have faced flat revenues for many years. After adjusting for exchange rate fluctuations and COVID-19, top-line growth has been in the 1-3% per year range, for many years. That compares to double digit growth rates in the webscale sector. As a consequence, telcos have been focused on their cost base in search of profitability growth. Costs include both capital expenditures (capex) and operating expenses (opex). Many MTN Consulting reports analyze capex. That's in line with the traditional focus of most vendors, who historically sell more into capex budgets than opex. Opex is rising in importance to vendors, though, and as a cost category it is several times the size of capex. Further, for telcos seeking success, understanding and effectively managing opex is crucial. Telco earnings reports make this obvious, as they highlight things like opex transformation programs, careful opex management, cost optimization initiatives, network efficiencies, and process automation. Peeling the opex onion The problem is that opex is a bit of a mystery - it's hard to understand across companies, countries, and over time. Reporting categories, definitions, and accounting standards vary widely. This report solves the problem. We have created a taxonomy of opex categories, examined a broad cross-section of telcos, and calculated a detailed opex profile for both the individual companies and the overall telecommunications industry. Key findings include: (1) The sum total of all network-related opex - including network operations, netinfra (leasing, interconnection, and spectrum fees), utilities (90%), and depreciation (85%) - amounts to a whopping 51% of total opex, on average. The network-related opex share can get as high as 70% (Veon) or 80% (Airtel) for some companies. For telcos, the network is their factory. (2) Network operations opex alone accounted for an average 17.6% of total opex for telcos in the 2016-20 timeframe, and there is upwards pressure on this figure. Further, network operations opex can vary dramatically across companies, exceeding 20% of total opex for many companies, and over 30% for at least one telco in our study (Telkom Indonesia) (3) Netinfra opex fell dramatically in 2019 due to implementation of a new accounting standard (IFRS 16), but increased depreciation and amortization expenses offset this decline. (4) Utilities, content, and R&D opex average to 4%, 6%, and 1% of total opex, with lots of variation around these averages: Airtel spends about 11% of opex on utilities, content accounts for over 35% of total opex for Comcast, and BT is a big spender on innovation with R&D accounting for over 3.5% of total opex. (5) Cost of devices, including both mobile and fixed CPE, averages to over 10% of total opex but surpasses 20% for some operators, mostly mobile-focused companies. Disentangling the revenues recorded from these devices from their costs, in order to calculate loss or gain, is nearly impossible due to telco reporting practices. (6) Sales & Marketing (including non-network customer support) and G&A averaged to 16% and 12% of total opex, respectively, for 2016-20. The sales & marketing category, though, exceeds 20% of total opex for many companies, especially during new services rollouts. SK Telecom, for instance, spent approximately 37% of total opex on sales & marketing in 2020, as 5G was scaling. G&A has less variation, but can also exceed 20%; one factor is the degree to which companies rely on third-parties for core corporate functions, as well as the cost of insurance, HQ facilities, non-income taxes, and other factors. (7) Depreciation and amortization (D&A), while a non-cash expense, is the single largest opex category, amounting to an average of 21.4% of total opex across 2016-20. The ratio grew from 20.6% in 2018 to 22.8% in 2020, due mainly to IFRS 16 implementation. (8) Labor costs are a significant contributor to a telcos' total opex (>18%), and they stretch across multiple categories of spending: network operations, sales & marketing, and G&A. Telcos are reshaping their workforces right now, cutting headcount, retraining existing employees, and hiring new ones with skills more attuned to the "software is eating the world" era. Variations in the average cost of an employee are one important factor in gauging the pace of automation within a telco. Implications Many of the above results will not be surprising to those who track telcos closely. However, putting a credible number on a "gut feel" is a leap forward from the status quo. Vendors need to be able to position themselves effectively to customers. Telcos and analysts tracking them need to have an apples to apples comparison of how their costs compare to peers. As far as public reporting goes, this study alone may not impact telcos' opacity and inconsistency around opex. These practices have historic roots, in some cases, and old habits can be hard to break. But observers should recognize that the practices are often self-serving, and just because a company says an initiative saved money, doesn't mean it really did. Company execs in every industry tend to dress up their financial results to look as attractive as possible, and telecom is no different. Next steps in our research This study is based on a deep dive into the financials of 21 significant telcos*: their size, region, business model, cost structure and other factors vary, allowing us to generalize based on their  results. However, we will be expanding the size of the sample in early 2022, and also updating the timeframe to include 2021 results. ___ *Companies included: Airtel, Batelco, BT, China Mobile, Chunghwa Telecom, Comcast, Du, Etisalat, Globe Telecom, KDDI, Megafon, MTN Group, Oi, Orange, Singtel, SK Telecom, StarHub, Swisscom, Telkom Indonesia, Telus, and Veon

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MTN Consulting is focused on network operators & their technology supply chains, tracking the economics of the network operator business and assessing the big shifts that impact technology spending trends. Our coverage includes:

  • 3 major network operator markets
  • 190+ operators
  • 40+ time series
  • 50 reports published per year

Latest report

Telco Opex Analyzer, 2016-20

MTN Consulting’s Telco Opex Analyzer analyzes the opex trends of a subset of key telcos in the telecommunications sector. The report’s dashboard allows a user to dig into overall spending levels, network’s contribution to opex, network-related capex, and profitability for a group of 21 individual operators. The report is designed to help vendors understand and plan for the needs of their customers and help network operators deploy their technology budgets wisely. The report's format is Excel. ABSTRACT Telcos have faced flat revenues for many years. After adjusting for exchange rate fluctuations and COVID-19, top-line growth has been in the 1-3% per year range, for many years. That compares to double digit growth rates in the webscale sector. As a consequence, telcos have been focused on their cost base in search of profitability growth. Costs include both capital expenditures (capex) and operating expenses (opex). Many MTN Consulting reports analyze capex. That's in line with the traditional focus of most vendors, who historically sell more into capex budgets than opex. Opex is rising in importance to vendors, though, and as a cost category it is several times the size of capex. Further, for telcos seeking success, understanding and effectively managing opex is crucial. Telco earnings reports make this obvious, as they highlight things like opex transformation programs, careful opex management, cost optimization initiatives, network efficiencies, and process automation. Peeling the opex onion The problem is that opex is a bit of a mystery - it's hard to understand across companies, countries, and over time. Reporting categories, definitions, and accounting standards vary widely. This report solves the problem. We have created a taxonomy of opex categories, examined a broad cross-section of telcos, and calculated a detailed opex profile for both the individual companies and the overall telecommunications industry. Key findings include: (1) The sum total of all network-related opex - including network operations, netinfra (leasing, interconnection, and spectrum fees), utilities (90%), and depreciation (85%) - amounts to a whopping 51% of total opex, on average. The network-related opex share can get as high as 70% (Veon) or 80% (Airtel) for some companies. For telcos, the network is their factory. (2) Network operations opex alone accounted for an average 17.6% of total opex for telcos in the 2016-20 timeframe, and there is upwards pressure on this figure. Further, network operations opex can vary dramatically across companies, exceeding 20% of total opex for many companies, and over 30% for at least one telco in our study (Telkom Indonesia) (3) Netinfra opex fell dramatically in 2019 due to implementation of a new accounting standard (IFRS 16), but increased depreciation and amortization expenses offset this decline. (4) Utilities, content, and R&D opex average to 4%, 6%, and 1% of total opex, with lots of variation around these averages: Airtel spends about 11% of opex on utilities, content accounts for over 35% of total opex for Comcast, and BT is a big spender on innovation with R&D accounting for over 3.5% of total opex. (5) Cost of devices, including both mobile and fixed CPE, averages to over 10% of total opex but surpasses 20% for some operators, mostly mobile-focused companies. Disentangling the revenues recorded from these devices from their costs, in order to calculate loss or gain, is nearly impossible due to telco reporting practices. (6) Sales & Marketing (including non-network customer support) and G&A averaged to 16% and 12% of total opex, respectively, for 2016-20. The sales & marketing category, though, exceeds 20% of total opex for many companies, especially during new services rollouts. SK Telecom, for instance, spent approximately 37% of total opex on sales & marketing in 2020, as 5G was scaling. G&A has less variation, but can also exceed 20%; one factor is the degree to which companies rely on third-parties for core corporate functions, as well as the cost of insurance, HQ facilities, non-income taxes, and other factors. (7) Depreciation and amortization (D&A), while a non-cash expense, is the single largest opex category, amounting to an average of 21.4% of total opex across 2016-20. The ratio grew from 20.6% in 2018 to 22.8% in 2020, due mainly to IFRS 16 implementation. (8) Labor costs are a significant contributor to a telcos' total opex (>18%), and they stretch across multiple categories of spending: network operations, sales & marketing, and G&A. Telcos are reshaping their workforces right now, cutting headcount, retraining existing employees, and hiring new ones with skills more attuned to the "software is eating the world" era. Variations in the average cost of an employee are one important factor in gauging the pace of automation within a telco. Implications Many of the above results will not be surprising to those who track telcos closely. However, putting a credible number on a "gut feel" is a leap forward from the status quo. Vendors need to be able to position themselves effectively to customers. Telcos and analysts tracking them need to have an apples to apples comparison of how their costs compare to peers. As far as public reporting goes, this study alone may not impact telcos' opacity and inconsistency around opex. These practices have historic roots, in some cases, and old habits can be hard to break. But observers should recognize that the practices are often self-serving, and just because a company says an initiative saved money, doesn't mean it really did. Company execs in every industry tend to dress up their financial results to look as attractive as possible, and telecom is no different. Next steps in our research This study is based on a deep dive into the financials of 21 significant telcos*: their size, region, business model, cost structure and other factors vary, allowing us to generalize based on their  results. However, we will be expanding the size of the sample in early 2022, and also updating the timeframe to include 2021 results. ___ *Companies included: Airtel, Batelco, BT, China Mobile, Chunghwa Telecom, Comcast, Du, Etisalat, Globe Telecom, KDDI, Megafon, MTN Group, Oi, Orange, Singtel, SK Telecom, StarHub, Swisscom, Telkom Indonesia, Telus, and Veon

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Research

MTNC’s research is focused on communications network infrastructure, a market attracting $3.5 trillion in annual operator revenues. Our goal is to provide credible, holistic assessments of where the NI market currently stands and where it is headed. Reports address market and technology trends, key players, and country dynamics.

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MTNC bundles its research into an annual subscription service called “Global Network Infrastructure”. GNI provides clients with an end-to-end view of the network operator business, assessing the big shifts that impact technology spending trends. GNI clients include technology vendors (chips, network equipment and software, IT services), operators, regulators, and investors.

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What Can President Biden Do to End the Disinformation Age?...
Posted by: Melvin Bankhead III on 25/01/2021

On Jan. 6, 2020, something extraordinarily dangerous occurred. During Congress’ certification of the Electoral College votes from the 2020 election, armed protesters stormed the Capitol Building, overwhelming police officer

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On the digital front, what can President Biden do to enhance our secur...
Posted by: Melvin Bankhead III on 28/12/2020

After Joseph R. Biden Jr. takes the oath of office on Jan. 20, 2021, the newly inaugurated president of the United States will need to contend with an America in turmoil. Naturally, the scourge of COVID-19, and its devasta

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Post-pandemic chip M&A splurge targets the data center market; ro...
Posted by: Arun Menon on 22/11/2020

After a prolonged hiatus, M&A activity in the semiconductor landscape ramped up significantly this year, nearing the record levels of 2015. The consolidation surge was particularly notable during the second half of 2020.

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THE RISE OF DIGITAL ADVERTISING AND THE DEATH OF OBJECTIVE JOURNALISM...
Posted by: Melvin Bankhead III on 09/07/2020

In the beginning, the people of Earth told their truths, voiced their opinions, and advertised their wares and services in print media such as newspapers and magazines. And the people of Earth looked upon their works, and

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DIGITAL PRIVACY, PART TWO: WHAT CAN WE DO ABOUT OUR DATA’S PRIVACY?...
Posted by: Melvin Bankhead III on 29/06/2020

As I indicated in Part One of these reports on digital privacy, digital tools such as facial recognition are used for many beneficial purposes. However, as I demonstrated, those tools are also extremely easy to abuse, particu

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DIGITAL PRIVACY, PART ONE: THE DANGERS OF FACIAL RECOGNITION...
Posted by: Melvin Bankhead III on 23/06/2020

There’s been a lot of talk in recent weeks regarding facial recognition technology. Much of the conversation has centered on privacy concerns. Other aspects concern the technical flaws in the software, which impacts the tec

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Our Research Bundles

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MTN Consulting’s Market Data bundle is designed for clients who need to understand all three types of network operators we track – telecom, webscale, and carrier-neutral. The bundle includes all of our Excel-based Market Review reports tracking these individual operator segments.
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MTN Consulting’s Telecom Network Operator (TNO) bundle provides clients with a deep dive into the telecommunications segment of network operators. The bundle’s products help clients understand how telcos are growing and transforming their operations.
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MTN Consulting’s Webscale Network Operator (WNO) bundle provides a deep look at the webscale segment of network operators – how it’s growing, how individual WNOs are building out their networks, and which suppliers are benefiting.

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To best support client inquiries and sales opportunities, we work with a small number of channel partners, as follows:
Clients based in Europe can first contact our Head of Business Development for that region, Waseem Haider, who is based in Berlin. In addition, any client can always contact Matt directly to discuss business opportunities.

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