ARPU and EBITDA do not reflect the economic growth and profitability of operators of telecommunication communication
Indicators, such as ARPU (average revenue counting on the subscriber) and EBITDA (a profit before taxes and depreciations), not fully reflect the economic growth and profitability of operators of telecommunication communication. [1]
In the field of financial performance the operator it is necessary to think of using as key indicators not only EBITDA (income before interest payment, income tax and depreciation). The basic income does not consider the made capital investments that causes big concern of investors in the course of consideration of questions of improvement of infrastructure by them for satisfaction of the new demand provided by scenarios of development.
Such indicators as income on the involved capital (ROCE) and income on the invested capital (ROIC) become important tools on efficiency evaluation. Besides, improvement of assessment of the new services offered by operators would be promoted by expansion of the sphere of financial performance over a margin of EBITDA which for many years was a key indicator of financial statements.
Notes
- ↑ From the report of Ernst & Young of Metrics transformation in telecommunications (transformation of performance indicators in telecom industry) February, 2013
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