Telecom operators’ revenues increased 7.3 percent to $473.2 billion during the first quarter of 2021, MTN Consulting report said.

This is the fastest growth in at least a decade.

Growth drivers

# the base period of 1Q20 was weak due to the initial spread of COVID-19
# 5G network penetration has grown
# Recorded device / equipment revenues
# Sizable drop in USD’s relative value in several key markets

For the four quarters ended March 2021, annualized capex amounted to 16.33 percent of revenues, from 16.43 percent in 4Q20. This is the seventh straight sequential decline.

Telcos are beginning to spend more on the cloud, with AWS, Microsoft Azure and GCP recording well over $1 billion (combined) in sales to this vertical in 2020.

Opex amounted to 66.1 percent of revenues for the 1Q21 annualized period, unchanged from 4Q20 but down significantly from its recent peak of 69.7 percent in 4Q17.

Telco profit margins improved throughout 2020, on an EBIT and EBITDA basis; in 1Q21, annualized EBITDA margin stayed flat at 33.9 percent but EBIT margin climbed to 14.8 percent, from 14.5 percent in 4Q20.

Industry headcount fell in 1Q21, down another 27K to 4.856 million. Telcos hope that fewer employees will lower Opex, especially when combined with investments in automation and digitization across the business.

Spending on employees, however, are climbing on a per-head basis and as a percentage of Opex. Labor cost per employee was $59.8K per year in 1Q21, up from $58.1K in the 1Q20 period.