Telecom companies are expected to spend US$2 trillion on capital projects between 2014 and 20191, as they face up to the challenge of technology change, an insatiable demand for data, and intense competition from existing and new players.
This will drive considerable investment into next generation technologies, new markets, innovative products and services, strategic alliances and fresh business models. Capital management in this environment requires the right mix of investments to maximize long-term shareholder value, by ensuring that expenditures are aligned to strategy and market demand.
In this survey, KPMG:
KPMG’s 2015 survey of leading practices and emerging trends
KPMG surveyed some of the world’s leading telecom companies from Europe, Middle East and Africa, Asia Pacific and Americas to determine how effectively they are managing capital investments. These findings are assessed against current perceptions of leading practice in capital management, and are augmented by the informed views of KPMG sector specialists and academic experts.
Although we found that governance and capital planning were generally strong and CFO-led, and capital was generally prioritized for strategically important investments, there were a number of areas for improvement:
Capital Management Framework
Our survey assesses leading practices and emerging trends across the six key areas of capital management:
1Communications Service Provider Revenue & Capex Forecast: 2014‒19, Ovum, 2014.
How can telecom companies determine the benefits of different capital investment options?