Ericsson: Capital Investment in Mobile Network Leads To Better Performance


Subscriber loyalty is mainly influenced by network performance and this has been confirmed by a report from Ericsson. The study shows that increased capital investment in network quality and performance creates improved financial returns for telecom operators. The research was based on data from 3 markets – Brazil, Mexico and US. 3 years of quarterly data was analyzed showing a robust connection between targetted capital investment and financial returns to mobile operators. It was noted that a 10% investment increase in a Brazilian operator drove up the market share and the ARPU. This saw a 6.7% increase in free cash flow and 5.5% increase in service revenues. The same observation was made in the other 2 markets.