The Longest Hangover
The mobile industry’s post-Dot Com hangover is still far from over. Coleago explains why telecoms has become a capital-heavy utility and why regulators must rethink their approach to restore sustainable returns.
More than two decades after the Dot Com crash, the mobile industry in developed markets continues to suffer from structurally weak returns, despite rising data demand and ongoing investment. This paper examines how mobile telecoms has evolved from a high-growth, high-return sector into a capital-intensive utility that has consistently failed to earn its cost of capital.
Using long-term evidence from the UK and other mature markets, the analysis shows how flat revenues, declining real ARPUs, rising capital intensity and repeated spectrum investments have combined to depress returns on capital employed. While operators continue to deliver more capacity, higher speeds and wider coverage, much of the economic value created has accrued to consumers and digital service providers rather than network operators themselves.
The paper argues that current regulatory and competition frameworks are misaligned with the economic realities of a utility-like mobile sector. Without changes that allow operators to reduce capital intensity, earn higher returns, or access new revenue sources, the industry risks ongoing underinvestment and financial decline. It concludes that governments and regulators must fundamentally rethink their approach if the mobile industry is to remain sustainable and capable of supporting future digital growth.
Other insights
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The European 5G Fairytale
For years, European policymakers and telecom operators have touted the impressive figure: “89% 5G coverage of populated areas.” On paper, this paints a picture of near-ubiquitous, high-speed connectivity. Scratch the surface however, and the reality looks quite different.
Maximising Shareholder Value in Spectrum Auctions
Spectrum auctions, while common in the telecom industry, are complex and high-risk events that can significantly influence a company’s long-term performance. Missteps, especially vague auction objectives and poor valuation discipline, can lead to substantial destruction of shareholder value.
Spectrum and Regulatory Challenges Related to eVTOLS
Electric Vertical Take-Off and Landing (eVTOL) aircraft are poised to revolutionise urban mobility, with commercial operations expected to begin as early as 2025 and significant growth anticipated by the 2030s.