The top 19 telcos achieved an aggregate revenue growth rate of 3.3 percent compared to Q1 2022    

Indian telcos lead with EBITDA margins of over 50 percent, according to Twimbit’s recent benchmark of the top 19 global telcos (Exhibit 1).  

Exhibit 1: EBITDA performance, Q1 2023

Fully realized tariff hikes drive Indian telcos’ growth momentum

Bharti Airtel’s tariff increase of 20 percent in December 2021 and 15 percent in October 2022 played a significant role in its revenue growth. Similarly, Reliance Jio’s revenue increased due to the telco’s substantial price increase of 25 percent in its prepaid category.

The tariff hikes benefitted both telcos until Q1 2023, realizing their YOY (Year over Year) revenue growth rate of 14 percent and 12 percent, respectively (Exhibit 2). Moving forward, the revenue growth rates are likely to be lower than these telcos have experienced in much of 2022 and Q1 of 2023.  

Exhibit 2: Revenue YOY growth, Q1 2023

“The full impact of the tariff hikes in India had already been realized, which will likely result in a slowdown in revenue growth and ARPU for these prominent telcos in upcoming quarters,” Siddhant Ranjan explained.

Industrial digitalization pressures telecom leaders to approach investments differently

The average CAPEX spend for the 19 telcos has declined to 16.7 percent in Q1 2023. This is because 5G penetration has reached peak maturity in markets such as the USA, China, Japan and South Korea.

“While Bharti Airtel increased its CAPEX spend by 91 percent in Q1 2023 with a focus on 5G deployment, the same cannot be said for the other telcos worldwide as they have completed their nationwide rollout.” Siddhant Ranjan explained. “The telcos in the developed markets such as China Telecom and AT&T have shifted their investment focus towards industrial digitalization and fibre penetration.”

China Telecom recently allocated a significant portion of its CAPEX spend (56 percent) towards digitalizing its industrial initiatives, with further intentions to increase its spending by 40 percent by the end of 2023.

Twimbit clients can read more in “Benchmarking the performance of the Top 19 Global Telcos in Q1 2023”

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