Skip navigation
Skip navigation
You are using an outdated browser. Please upgrade your browser.

* Focus, scale and capital utilization are critical strategic value drivers
in the telecoms market

* Lessons must be learned and operator strategies must be credible and avoid
overexposure to market risks

* Operators should use key performance indicator (KPI) benchmarks to assess
performance versus competitors

* Report includes range of KPI benchmarks to assist mobile operators,
ISPs and alternative operators

CAMBRIDGE, UK, May 17, 2002 - Generating sustainable enterprise value is a
must for telecoms operators and Internet service providers under intense
pressure from equity shareholders and debt funders to demonstrate a clear
path to positive cashflow and longer-term profitability, says a new study
from Analysys, the global adviser on telecoms and new media

The new report entitled Benchmarks and Key Performance Indicators: lessons
from the European telecoms market states that operators are reassessing
their strategies in an attempt to meet funders' expectations of return on
investment. To do so, says Analysys, they should consider their options with
regard to three principal strategic value drivers - focus, scale and capital

"Telecoms companies are no longer valued against size of customer base,
network reach or future growth potential," says Ross Pow, managing director
of Analysys Research and author of the report. "In the now maturing market,
performance measurement is almost solely focused on the efficient use of
capital to generate sustainable returns."

To draw out some of the lessons in the aftermath of the enormous turbulence
which has impacted the European telecoms market, the report examines and
summarizes the performance issues of 16 companies that no longer exist in
their original form, including firms such as Atlantic Telecom and RSL COM.

"Operators must learn from the recent market turmoil and avoid strategies
which are overexposed to market risks," says Pow, "especially in terms of
their reliance on new technology, rapid growth in customer demand and
favorable regulatory determinations."

To build enterprise value, according to Analysys, it is vital that operators
use key performance indicator (KPI) benchmarks to estimate their overall
score against each of the key strategic drivers - focus, scale and capital
utilization - and compare this with their principal competitors.

"These strategic drivers have always underpinned the telecoms industry,"
continues Pow, "but in the last few years we have seen a high level of
unfocused expansion, questionable acquisitions and poorly controlled capex."

The report provides benchmarks for a number of KPIs which can be used to
monitor the performance of mobile operators, ISPs and alternative fixed-line

"Benchmarking is increasingly taking place across the industry," says Pow,
"a good example being INBENCH, a multi-play benchmarking initiative for
major fixed operators.

"It looks like there is still a wide variation in the relative performance
of operators in being able to build and sustain enterprise value," adds Pow.
"Those with a clearly focused strategy, in terms of their service portfolio,
target customers and geographic spread, will take best advantage of the
current conditions to grow market share and will also be the ones that
receive most investor support for expansion once the market begins to improve."

Benchmarks and Key Performance Indicators: lessons from the European
telecoms market is designed to help telecoms operators, ISPs, investment
banks and equipment manufacturers navigate the current turmoil by learning
from recent market experiences. Available in pdf and PowerPoint formats,
pricing starts from EUR1100. For more information, telephone Analysys
Research on +44 (0) 1223 460600 or email .

What is enterprise value?

Enterprise value is increasingly the most used measure of telecoms operator
valuation as it takes into account the return required to all funders. It is
calculated as a company's stock market capitalization plus preferred stock
(if not quoted) plus the market value of its net debt (current and long-term
liabilities, including quoted bonds, less cash and cash equivalents).
Theoretically, enterprise value should equal the present value of its future
free cashflow.

About Analysys (

Analysys, the global advisor in telecoms, IT and new media, works at the
forefront of the communications revolution, delivering advice and insight to
established and new entrant players. From offices in Cambridge, London,
Glasgow, Madrid, Milan, Paris, San Francisco and Washington DC, Analysys
staff provide strategy and systems consultancy, conferences, information
services and start-up support to the companies that are creating the
networked economy. Analysys Research reports and database services provide
authoritative coverage of this convergent industry, based on an unrivalled
ability to fuse real-world experience, rigorous research and forward-looking

Recent reports include:

* The Reality of GPRS in Europe: subscribers and revenue (April 2002)

* Western European Mobile Forecasts and Analysis 2002-2007 (March 2002)

* Session Initiation Protocol: SIP-related European revenue forecasts
2002-2007 (February 2002)

* Public Wireless LAN Access: US Market Forecasts 2002-2007 (January 2002)

* Video Streaming for Enterprises: forecast revenues for service providers
(December 2001)

* GPRS Roaming: technical options and strategic implications (December 2001)

* Storage Area Networks: New Revenues for Optical Carriers? (November 2001)

* Public Wireless LAN Access: Market Forecasts (November 2001)

* Pricing GPRS Services (October 2001)

* FRIACO: how capacity-based interconnection strengthens the Internet market
(October 2001)

* Meeting the Challenges of GPRS Billing (September 2001)

* The Bandwidth Exchange: Herald of a New Carrier Age (August 2001)

* Public Wireless LAN Access: A Threat to Mobile Operators? (August 2001)

* Controlling the 3G Value Chain (July 2001)

* Successfully Marketing Mobile Data Services to SMEs (July 2001)

* Gigabit Ethernet: the solution to the MAN bandwidth bottleneck? (July 2001)

* Market Realities of IP-VPNs (July 2001)

Media contacts (for author photography, executive summaries and interviews)

Martin Brooke
Martin Brooke Associates
Tel: +44 (0)1223 264050

This press release was distributed by ResponseSource Press Release Wire on behalf of Martin Brooke Associates in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit