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Telecom operators and working capital management 2011 - Telecom operators and working capital management 2011 - EY - Global

Telecom operators and working capital management 2011

Telecom operators and working capital management 2011

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Operators in regions outside of Europe and North America still carry the lowest level of WC overall, reflecting the importance of revenues from mobile services and prepaid subscribers.

Learn how successful telecom operators have been at focusing on working capital (WC) to improve business results.

Telecommunications operators have been focusing on working capital management as a way to drive operational and financial efficiency, enhance customer service, and boost service and network differentiation.

Our report, Cash on the line, 2011 is the latest in a series of working capital management reports.

Take a closer look at the telecom industry results.

Key findings of Cash on the Line 2011

We’ve identified the following key findings of our report.

  • In 2010, telecommunications operators in Europe managed to both reverse the deterioration in working capital (WC) performance seen in 2009 and beat the previous record of 2008. North American operators reported further progress, with WC reaching its lowest levels since 2006. By contrast, there was a slight increase in levels of WC reported by operators in other regions.
  • In Europe, progress came entirely from payables, while receivables performance suffered from weak economic conditions in certain countries. In North America, performance was stronger for receivables and, to a lesser extent, for payables. In other regions, last year’s weak WC performance was due to higher levels of receivables and inventories. A common feature across all regions was a deterioration in inventory performance.
  • Operators in regions outside of Europe and North America still carry the lowest level of WC overall, reflecting the importance of revenues from mobile services and prepaid subscribers. In addition, capital expenditure requirements remain large. By comparison, North American operators exhibit the highest level of WC, with a much wider gap between days sales outstanding (DSO) and days payable outstanding (DPO) than their European counterparts.
  • Comparisons between operators within each region shows wide variations in WC performance. While part of this may be explained by variations in business models and payment practices, the level of disparity in performance between companies indicates fundamental differences in management focus on cash and process efficiency.


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