Mobile operators across the world’s largest economies have significantly reduced opex and capex levels to counter the effects of the global recession, according to a new Wireless Intelligence report. The new study – The Cellular Telecom Crunchonomics: One Year On – found that operating expenditure (opex) accounted for 60 percent of operator revenues in 3Q09, compared to 63 percent a year ago, while capital expenditure (capex) declined to 10 percent of revenues, compared to around 14 percent a year ago. Total revenues from mobile operators in the 30 OECD countries are forecast to decline from EUR411 billion to EUR408 billion between 2008 and 2009, the study says. However, the significant reduction in opex helped keep EBITDA stable at 33 percent of total revenues, while capex reductions meant that operating cash flows increased to 22 percent of total revenues, up from 20 percent a year ago.
The report warns that the trend towards operators preserving cash flow by reducing opex and capex could affect next-generation network rollout. “The industry is facing a dilemma as it must invest in 3G network expansion and service improvements to meet consumer expectation as well as generate substantial profits to offset falling voice revenues, yet at the same time it is cutting marketing budgets and squeezing capital expenditure,” commented Joss Gillet, Senior Analyst, Wireless Intelligence. “The financial crisis has just exacerbated already existing difficult market conditions.” The European mobile industry was deemed to be hardest hit by the economic downturn. Total operator revenues in Europe are forecast to fall by 4.3 percent this year to reach EUR36.5 billion, with declines of 5 percent expected in key markets such as the UK, Spain, Portugal, Ireland, Greece and Austria. By contrast, operator revenues in North America (USA/Canada) are proving resilient and are forecast to grow by 4.3 percent this year to reach EUR135 billion. View the full press release (including data tables) here.