Forecast on operator Capex, revenue and job growth: MTN Consulting

MTN Consulting’s latest report has revealed the forecast for telecom operators’ Capex, revenue and employee growth patterns during 2022-2027.
Telecom Capex during 2022-2027Telecom operators’ revenues in 2027 will be a bit more than $2 trillion as compared with $1,891 billion in 2021, according to a report prepared by MTN Consulting.

Capex in the global telecom sector has surged with costly 5G network upgrades, and fiber networks that are coming up in the US and Europe. Mobile network operators’ Capex touched about $330 billion in both 2022 and 2023, from an average of $307 billion for the prior 10 years. Software Capex will continue to grow as a percent of total Capex.

Capital intensity is currently at an all-time high, likely to end 2022 at 18 percent, but will drop to the 16-17 percent range by 2024. There is a lot of variation around this average; for instance, the US figure for 2027 is 13 percent, versus 22 percent for Indonesia.

The telecoms sector will see reductions in headcount, dropping an average of 2 percent per year from 2021 to 2027, ending the period at about 4.1 million. The average employee will get costlier due to labor market competition and the need for more expensive skills: labor cost per employee will hit $69.2K per year in 2027, from $57.8K in 2021.

Telecoms will grow revenue per employee from about $405K in 2021 to $492K as they learn how to do more with less, implementing automation across their operations.

Revenues from three segments – telecoms, webscale, and carrier-neutral – will grow to $5,755 billion by 2027 from $4,121 billion in 2021. Capex will reach $646 billion in 2027 from $536 billion in 2021 – driven by the growth in webscale. The share of Capex from webscale will reach 41 percent by 2027 from 33.2 percent in 2021 and less than 10 percent in 2011.

Telecoms capital intensity peaks in 2022 at 18 percent in 2022 and heads towards a bit more than 16 percent by 2027. Webscale capital intensity averages around 8 percent for the forecast period, with a big piece of the near-term upside coming from Meta/Facebook. Capital intensity is highest in carrier-neutral — well over 30 percent for the forecast period.

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