Building valuable connections

Building valuable connections

Capital management in the global telecommunications sector.

Capital management in the global telecommunications sector.

Telecommunication companies are expected to spend US$2 trillion on capital projects by 20191, as they respond to the challenge of technology change, an insatiable demand for data, and intense competition from existing and new players.

This investment will drive the take-up of next generation technologies, new markets, innovative products and services, strategic alliances and fresh business models. Capital management in this environment requires discipline ensuring that expenditures are aligned to strategy, market demand and customer expectations.

 

Key insights

  • Governance is strong, but executive rewards are rarely aligned with capital management objectives. 
  • There is potential for releasing funds from ‘business-as-usual’ investments to more strategic projects.
  • Many companies lack investment agility and fail to build contingency into their capital programs.
  • More frequent and in-depth reviews could increase capital recycling potential.

 

Footnote:

1Communications Service Provider Revenue & Capex Forecast: 2014‒19, Ovum, 2014.

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