Investment in telecommunications grew in 2015

Published 15.08.2016

In 2015, investments in telecommunications operations amounted to EUR 680 million at a growth rate of 12 per cent. These numbers include the tangible and intangible investments of telecom operators with activities in Finland, as well as invested broadband aid.

In 2015, gross investment in telecommunications by telecom operators with activities in Finland amounted to around EUR 790 million of which 82% were tangible investments. Investments in actual telecommunications operations, which mean fixed and mobile networks as well as TV and radio operations, totalled EUR 680 million at an annual growth rate of no less than 12%. Tangible investments accounted for roughly 84% of the investments in telecommunications.

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Figure: Development of investments in telecommunications by network.

The only telecommunications sector with a negative trend in investments in 2015 was TV and radio operations. Investments in TV and radio operations amounted roughly to EUR 40 million, representing a decrease of 31% compared to 2014. However, telecom operators’ investments in the mobile communications network grew by 18% and amounted to approximately EUR 280 million. Investment in the fixed network grew roughly by 16% and amounted to approximately EUR 360 million. The increased investment in the fixed network was mainly based on investments in Cinia's submarine communications cable project. Many telecommunications investments support both the fixed and the mobile network, which must be taken into account when examining their mutual development.

As regards actual telecommunications operations, investments in the fixed network, mobile network and TV and radio operations reached 53%, 41% and around 6% respectively.

Table: Change in investments by telecom operators 2014–2015

Telecommunications is a rather investment-intensive sector and the used technology is replaced or updated at a fast pace. From a societal point of view, investments in the sector secure the supply of competitive telecommunications services also in the future. In recent years, the construction of new technology LTE networks to upgrade mobile networks and fibre optic connections to provide data transfer services in fixed networks have required significant investments.

In 2015, the ratio of investments to the total turnover of telecommunications operations, i.e. the total investment rate, remained at 13% as in the previous year. The investment rate of actual telecommunications operations, i.e. the ratio of investments in telecommunications to the revenues received from it, was 20% representing an annual growth of 3 percentage points.

When taking a closer look on investment rates by telecommunications sector, it is clear that the investment rate is higher in the fixed network operations than in the mobile network or TV and radio operations. Even though Cinia's submarine communications cable project largely explains the increased investments in the fixed network in 2015, the construction of fibre optic connections has kept the investment rate in the fixed network at a high level for years. Last year the investment rate in the fixed network was 30% whereas it was only half of that (15%) in the mobile network and around 11% in TV and radio operations. In TV and radio operations, the investment rate has decreased significantly in recent years. This is probably caused by fewer investments in the terrestrial television network.

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Figure: Development of telecom operators’ investment rates.

In the market review of 2013, FICORA stated that the focus of investments is clearly changing as the investments concentrate more on mobile networks compared to previous years. However, investments in the mobile network have not surpassed investments in the fixed network which have been higher both in relative and absolute terms during the entire analysis period. One reason for this trend is that the fixed network serves as a backbone for wireless connections.

*To be able to compare the changes in percentages between 2014 and 2015, this article only includes such operators that have provided data on both years. The EUR figures of 2015 include all telecom operators that have reported figures for 2015.

More information about the statistics is available in this article.

Key words: Internet , Radio , Telephone , Television , Investments , Telecommunications , Articles

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