Telecommunications fixed assets survey

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Telecommunications fixed assets survey

Telecoms companies worldwide are under enormous pressure to deliver new, data-rich products to customers while meeting shareholder demands for profitability.

The global financial turmoil has driven down the confidence of investors, businesses and consumers alike. Although the telecoms market has proven fairly resilient to recessionary impacts, it has not been immune. In an environment where financing opportunities are limited and household income restrained, maximizing returns on capital expenditure (CAPEX) programs has never been more important.

With fixed assets comprising the bulk of a telecoms company’s capital base, operators must capitalize on them to drive competitive advantage. Yet the near universal global compliance with IFRS is creating a standardized approach to fixed assets management, leaving little room for differentiation.

To find out how organizations are responding to these challenges, we conducted our fifth online global study into the impact of global reporting and regulatory frameworks on a telecoms company’s ability to manage its assets. The findings were combined with secondary research and our own insights and analysis.

This report discusses the accounting practices, capitalization policies and strategies and risk management approaches being taken across the industry — as well as the implications for operators.

Survey objective

Telecommunications is a very capital-intensive industry, with the fixed assets of network infrastructure forming a large part of a telecoms company’s balance sheet whether it is a fixed line, mobile or fiber network, backbone or last mile. Given the constant evolution and emergence of new technologies, managing fixed assets has become extremely complex also from an accounting perspective. Moreover, the global move to IFRS is leaving less room for differentiation.

To determine how the industry is responding to these issues, telecoms companies were asked detailed questions about their network rollout plans and physical assets management, as well as the impact of regulatory requirements, specifically:

  • The importance of fixed assets accounting
  • Their current fixed assets practices, policies, procedures and systems
  • The impact, if any, that transition to IFRS has had on their fixed assets accounting
  • Their current treatment of specific asset categories

Methodology and how to use this report

This report summarizes the findings of our biennial online survey about how telecoms companies are responding to the current challenges of fixed assets management. Full benchmarking results are only available to survey participants. The survey was available for companies to participate between June and October 2013.

Of the 16 responding telecoms companies, 50% are returning participants from the 2011 survey, representing a mix of global and smaller players. Over 80% prepare their financial statements in accordance with International Financial Reporting Standards (IFRS).

Telecommunications fixed assets survey

For more in-depth information and a closer look at findings from the survey, download the full summary version as a PDF.