The findings come from the company's inaugural global telecommunications sector outlook report and is based on a sample of 28 of the largest operators.
Global earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of around 3% is forecast for the same period, ' therefore overall flat margins', with EBITDA margins stable in the 35-40% range. Businesses are also expected to accelerate cost cutting to offset energy and labour cost increases.
Investments in 5G networks, fibre and spectrum will continue in order to "protect and increase market share and earnings".
The biggest risks to the profitability of the market over the next 12-18 months include 'persistent high inflation; higher interest rates; further erosion of purchasing power if we enter into a severe recession; competition constraining pricing power; and lack of ability to generate return on 5G investments'.
Geographically, the US and Canada is forecast to experience organic revenue growth of approximately 2.2%, driven by faster wireless connectivity, bigger capacity and customer migration to unlimited wireless plans.
In Europe organic revenue growth is predicted to top 0.5% excluding international operations with capital expenditure expected to remain high as the expansion of fibre-to-the-home and 5G networks continue.
Over in Asia-Pacific revenue growth of about 3% is forecast, impacted by increased data and broadband consumption as well as industry consolidation that reduces competition. capital spending is expected to stay between 23-25% as it has been over the last few years.
In Latin America revenue is expected to be stifled by inflation and competition with growth due to be 2.2%, below the 5% growth reported in 2021. However, EBITDA margins and cash flows benefit from operating spending efficiencies, M&A and consolidation, along with sustained capital investments.
