Capital investment improves network performance, giving better returns
A new study commissioned by Ericsson shows that increased level of investments in network quality and performance create sustainable competitive advantages and improved financial returns for network operators. The study, carried out by Dr. Raul Katz, President of Telecom Advisory Services, and Director of Business Strategy Research, Columbia Business School, explored the relationship between capital investments in mobile telecom networks and the technical, commercial and financial performance of operators. Dr. Katz performed extensive statistical analysis, across a large set of metrics, on three years of quarterly data from three different markets -- Brazil, Mexico and the United States.
The study found that a 10 percent increase in capital expenditure for a Brazilian operator resulted in increased market share, a significant boost to ARPU and reduced churn. Given this enhanced commercial performance, the operator should experience a 5.5 percent increase in service revenues.
Full report is available at following link.