TR233 Network Asset Management Survey Report R14.5.1

In 2014 it is expected that net global capital expenditures attributable to network investments and growth will exceed $354 Billion. This number is up 4% from the previous year ($340B). While this growth is driven by massive expansion in LTE rollouts and network transformations, what is alarming to operator finance teams around the world is the lack of growth in revenues. In 2013, for example, revenues grew by a mere 1.4% ($1.97T)1, and overall service revenue growth between 2013 and 2018 is only expected to be 1.7% CAGR2.

Under the backdrop of increasing capital expenditures (Capex) and revenue growth that is failing to keep pace, operators are now faced with a critical, immediate need to rationalize Capex practices. A recent PriceWaterhouse Coopers study revealed that 20% of assets were not returning the cost of capital; additionally it is estimated that between 5%-15% of network assets are stranded, and thus not producing any revenues for the business. These findings, coupled with an expected 57% drop in EBITDA worldwide in the next 5 years, have operators carefully reviewing budgeting and Capex allocations, and even more importantly, validating returns on Capex investments.

With this history in mind, The Asset Management project team within the TM Forum met with dozens of operators, and ultimately commissioned an industry survey to study Network Asset Management programs and practices within operators today. The survey has a specific focus on understanding the magnitude of the Capex challenge, and the returns on existing network investment that operators are experiencing. The results of the survey are highlighted within this report, along with subsequent analysis of the findings.