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Telecom Sector

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32 views17 pages

Telecom Sector

Uploaded by

220196.mba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tushar Kore

15 Financial Ratio for


Analyzing:
Telecom
Sector
Tushar Kore

1
Average Revenue
Per User (ARPU)
Shows how much revenue the company
makes per user. Higher ARPU means more
revenue per customer.

Formula:
Total Revenue
ARPU = Total Subscribers
Tushar Kore

2 Churn Rate
Measures how many customers leave the
service. A lower churn rate means better
customer retention.

Formula:

Churn Rate =
Lost Subscribers
Total Subscribers
x 100
Tushar Kore

3
Subscriber Acquisition
Cost (SAC)
Tells how much it costs to bring in a new
customer. Lower SAC means more efficient
customer acquisition.

Formula:
Total Cost to Acquire New Customers
SAC = Total New Subscribers
Tushar Kore

4
Lifetime Value (LTV)
of a Subscriber
Estimates the total revenue a company can
expect from each customer over their
relationship.
Formula:

LTV = Average Customer


ARPULifetime (Months)
Tushar Kore

5
Network
Utilization Ratio
Measures how well the company is using its
network. Higher utilization means better
efficiency.

Formula:
Data Traffic
Network Utilization Ratio = Network Capacity
Tushar Kore

6
CapEx-to-
Subscriber Ratio
Shows how much is being invested per
subscriber. High CapEx per subscriber
indicates heavy infrastructure investment.

Formula:
Capital Expenditure
CapEx to Subscriber Ratio = Total Subscribers
Tushar Kore

7
Data Traffic
Growth Rate
Tracks how fast data usage is growing,
signaling increasing demand for telecom
services.

Formula:
Data Traffic Ending Data Traffic - Beginning Data Traffic
Growth Rate = Beginning Data Traffic
Tushar Kore

8
Revenue Per Cell
Site
Shows how much revenue each cell site
generates, indicating the efficiency of the
company’s infrastructure.

Formula:
Total Revenue
Revenue Per Cell Site = Number of Cell Sites
Tushar Kore

9
Subscriber
Penetration Rate
Measures how much of the market the
company serves. Higher rates indicate strong
market penetration.

Formula:
Total Subscribers
Subscriber
=
Penetration Rate Population
x 100
Tushar Kore

10 Tower Utilization
Ratio
Measures how effectively the company uses
its towers. More tenants per tower mean
better asset utilization.
Formula:
Number of Tenants per Tower
Tower Utilization Ratio = Total Towers
Tushar Kore

11
Spectrum
Efficiency Ratio
Indicates how efficiently the company uses
its spectrum licenses to deliver services.
Higher efficiency is better.

Formula:
Data Traffic
Spectrum Efficiency Ratio = Spectrum Allocated
Tushar Kore

12
Operating Cash
Flow Per Subscriber
Shows how much cash flow each subscriber
generates. Higher numbers indicate more
cash generation per customer.

Formula:
Operating Cash Flow Operating Cash Flow
Per Subscriber = Total Subscribers
Tushar Kore

13
Network Maintenance
Cost-to-Revenue
Tells how much of the revenue is spent on
maintaining the network. Lower ratios are
better for profitability.

Formula:
Network Maintenance Network Maintenance Cost
Cost to Revenue
= Total Revenue
Tushar Kore

14
Price-to-
Subscriber Ratio
Shows how much the market values each
subscriber. A lower ratio may suggest
undervaluation or inefficiency.
Formula:
Price to Subscriber Market Capitalization
Ratio
= Total Subscribers
Tushar Kore

15
Mobile Data
Penetration Rate
Measures what percentage of customers are
using mobile data, a key metric for gauging
future growth potential.

Formula:
Mobile Data
=
Penetration Rate
Mobile Data Subscribers
Total Subscribers
x 100
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