A study commissioned by Ericsson indicates that 10 per cent increase in capex by a telecom operator in Brazil resulted into 5.5 per cent increase in service revenue and 6.4 per cent growth in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
Based on the findings of the study, the telecom vendor states that 1 percentage point decline in overall churn leads to a 6.86 per cent increase in service revenues. The study indicates that increased level of investments in network quality and performance leads to sustainable competitive advantages and improved financial returns for network operators.
Further, the findings of the study suggested that a 10 per cent increase in capex for the Brazil-based operator resulted in an increased market share, and provided significant boost to its average revenue per user. Given this enhanced commercial performance, the operator is expected to post 5.5 per cent growth in service revenues, 6.4 per cent increase in EBITDA margin, and 6.7 per cent increase in free cash flow from operations.
