I was reading a wonderful article at fellow blogger (I learned few points from his blog on investments) on Telefonica and then it made me curious to see what is the EBITDA for the TELCO's around the world. Ok, let me confess I have not spend a lot of time finding the data but basically I checked the annual reports of major Telco's I know from emerging markets as well as developed world (with the exception of US). You'd be surprised to see the margins.
Below is the graph showing the margins. The top 3 from emerging markets are,
* Telkomsel - Indonedia (66%)
* Djezzy - Algeria (57.1%)
* Globe - Philippines (54%)
In the above markets one common item is relatively high revenue from "voice" & "sms" or basic services. Moving forward it'll be interesting to see whether these operations can maintain their high ebitda when they move to data business or the data revenue % increases. My belief is the margins will erode when the % of data revenue increases. Which means indirectly smart phones coupled with dongles affecting telco margins.
The table showing the details is given as well. I excluded US and south america completely as I am not very familiar with the region.
However in the emerging markets, the cost of operations and annual capital expenditure will be relatively high as the focus is on growth. In the developed/matured markets the costs will be relatively low.
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