FEATURE : TELECOM
The five-year performance in terms of total shareholder return and value creation for telecom players is below average , but an analysis and recommended action plan by BCG shows how they can generate new value and rise through global rankings , explains Kitso Lemo at BCG Johannesburg . by total shareholder return , secured places in last year ’ s top 20 rankings as well .
But before they break out the champagne , telcos should consider some critical context . From 2019 to 2023 , the S & P 1200 index of global stocks had an annualised total shareholder return of 13 %, meaning that the telecom industry performed below the market average . In fact , for the most recent five-year period , telcos ranked 31st among the 33 sectors BCG tracks .
This year ’ s Mobile World Congress , MWC clearly demonstrated how the industry has grown beyond its focus on all things mobile . It now incorporates a broad spectrum of technological disruption . In fact , 50 % of participants at this year ’ s event came from outside the telecom industry .
Two telcos operating in Africa rank in the list of Top 20 Telcos by five-year annualised total shareholder return . Topping the list is Bharti Airtel , which is strong in its home market of India but also operates in other parts of South Asia and in 14 African countries , primarily in East , West , and Central Africa as Airtel Africa .
Over the past five years , Bharti Airtel generated an annualised total shareholder return of 30 % – higher than any of the other 58 companies in BCG ’ s sample – driven by an annual 32-percentage-point boost to net income margin and an annual 13-percentage-point increase in sales .
This trend is captured in BCG ’ s 2024 Telecommunications Value Creators Report , A New Formula for Success , which shows the varied routes to success top ranked companies have adopted . Typically , they have defended their core business , invested wisely in network upgrades , tightly controlled costs , and begun harnessing the power of AI .
The report analyses 59 public companies in the global telecom sector and found that in the five years from 2019 to 2023 , telcos delivered a median annualised total shareholder return of 6 %. This is up from 3 % for the five-year annualised total shareholder return reported 12 months ago in BCG ’ s 2023 report .
Airtel Africa has 147.7 million voice and 59.8 million data customers and is expanding its network in both rural and semi-urban areas . It also offers digital services like live TV and sports , and mobile money services that reach 36.5 million customers .
The penetration of Airtel Africa ’ s mobile data and money services continues to rise and it recently began rolling out a 5G network in three countries , starting in Nigeria . The company also launched Nxtra , a new data centre business to meet the continent ’ s growing digital needs .
To unpack these results in more detail , the report divides the industry into four archetypes :
For the purposes of the report , total shareholder return is measured over five years to limit the impact of shortterm market moves and as such , changes in rankings are gradual ; 70 % of the top 20 companies , as ranked
# 1 Global telcos
These resilient firms saw their median annualised fiveyear total shareholder return rebound to 7 %, up from
How African telcos can generate new value and rise global ranks
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