If you want to actually skip to the end and see the ARPU chart, feel free.
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>mostly not true
Mostly not true is 1 for a binary yes and no scenario. The question at play was the comparability of telecom to other industries.
The fact of subsidies, spectrum, and right of way make this is a non comp, which make the chart being shown irrelevant.
If you truly believe that a simple industry ROIC comparison makes a difference, explain how that makes an iota of impact to AT&T or Comcast in terms of their Capex decisions.
Are they going to pull up their wires tomorrow and go all in and become Google?
Will they Not invest in capex at all? Or Seek money from the markets?
They will - and the markets will ask a known set of questions:
Are The revenue streams for pharma, or movies, or insurance of the same periodicity as telecom? What are the running costs, manpower costs?
How cyclical or not is telecom? What are the operating margins? What is net profit or EBITDA?
How much return on capital can they expect for the next 4 years, or 10 or 20? Or forever?
This is not an argument I am having with you. I am telling you, that industry comparisons are done within the same industry.
For the same reason that when buying microwaves, you don't look at refrigerators.
Each market has their own forms, issues, strengths and weaknesses.
ALL investors at the level where a capex influencing financial investment arises, are aware of this.
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As for the risk - its risk, not uncertainty.
Its pretty much a line item on multiple excel sheets all around wallstreet.
It will influence number of users by 10% over the next 15 years,
which will turn into an ARPU of X for these years.
This will in turn turn into revenue for that period, which will be then reduced down to an expected value of the firm today.
Hell, the expected rate of interest, could easily have a greater impact on the share price and risk of a telecom firm than cord cutters.
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Its very hard not to invest in such an industry which obviously has so many things going for it that it can persist in this manner.
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>mostly not true
Mostly not true is 1 for a binary yes and no scenario. The question at play was the comparability of telecom to other industries.
The fact of subsidies, spectrum, and right of way make this is a non comp, which make the chart being shown irrelevant.
If you truly believe that a simple industry ROIC comparison makes a difference, explain how that makes an iota of impact to AT&T or Comcast in terms of their Capex decisions.
Are they going to pull up their wires tomorrow and go all in and become Google?
Will they Not invest in capex at all? Or Seek money from the markets?
They will - and the markets will ask a known set of questions:
Are The revenue streams for pharma, or movies, or insurance of the same periodicity as telecom? What are the running costs, manpower costs?
How cyclical or not is telecom? What are the operating margins? What is net profit or EBITDA?
How much return on capital can they expect for the next 4 years, or 10 or 20? Or forever?
This is not an argument I am having with you. I am telling you, that industry comparisons are done within the same industry.
For the same reason that when buying microwaves, you don't look at refrigerators.
Each market has their own forms, issues, strengths and weaknesses.
ALL investors at the level where a capex influencing financial investment arises, are aware of this.
----
As for the risk - its risk, not uncertainty.
Its pretty much a line item on multiple excel sheets all around wallstreet.
It will influence number of users by 10% over the next 15 years,
which will turn into an ARPU of X for these years.
This will in turn turn into revenue for that period, which will be then reduced down to an expected value of the firm today.
Hell, the expected rate of interest, could easily have a greater impact on the share price and risk of a telecom firm than cord cutters.
---
Its very hard not to invest in such an industry which obviously has so many things going for it that it can persist in this manner.
Here this chart should help-
https://www.statista.com/statistics/203642/forecast-for-the-...
I'll see if I can find similar numbers for Wireline, but the pattern will be the same.
American Telecoms get huge ARPUs from their subscribers.
America has abysmmal internet for the nation that created the modern telecom firm, and created the internet.
The firms are massive rent seeking entities in many respects, and are now consolidating to reduce competition further.
When google fibre enters their territory, they manage to lay cable, despite delaying it for years otherwise.
So no, people will always invest or look to own American telecom, because American consumers are great at giving money out.