Telecommunications services provide a vital thread that keeps communities connected, enabling the near-instantaneous transmission of calls and messages. It is so effortless to pick up a phone and start a video conference with partners on opposite sides of the planet that it is easy to forget the scale of operations that make such a feat possible.
Telecommunications: an expensive business powered by people
Operating and maintaining telecommunications infrastructure and services is a mammoth task requiring significant expenditure. Vodafone’s capital expenditure in Europe alone reached 6.03 billion euros in 2022, showing the scale of spending required in the industry.
The average revenue per user (ARPU) among mobile subscribers varies greatly around the world. In France, telecommunications companies generate a mobile ARPU of 22 U.S. dollars. In neighboring Germany, this falls to just 13 U.S. dollars. Canada stands out as one of the most expensive countries, with an ARPU of 37 U.S. dollars.
Postpaid subscribers can also bring in more than double the ARPU of a prepaid subscriber. Telefónica, for example, generates an ARPU of 7.5 euros per prepaid user in the United Kingdom (UK), rising to 22.1 euros for postpaid subscribers.
5G to set the tone in the coming years
While meeting the challenges the industry currently faces, telcos still need to look at keeping up with improving technologies and the greater data demands of customers. Going live in 2019, 5G has emerged as the next major technology that will transform how telcos provide a service. Global shipments of 5G handsets are on the rise. Companies offering affordable 5G handsets, such as Vivo and Xiaomi, have shown impressive growth in this area. Demand is expected to increase three-fold between now and 2025.
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Research Lead covering technology and telecommunications