Following up on my updates to revenue and EBITDA margin trends for competitive telecoms, here is a look at capital expenditures as a percentage of revenue. Whereas the metro fiber specialists tend to have high margins, they also have high rates of capex. At least they do if they are growing that business… Here is the chart for the same group of companies:
It’s rather rocky, which should be expected given that capex levels tend to be strongly affected by the timing of events. Perhaps if one considers each in tandem with how much of its own fiber each company operates.
- Level 3 Communications (NYSE:LVLT, news, filings) has been way down below 10% for some time now, despite having as much fiber as they do – which shows up obviously in their revenue declines lately. If their local markets initiative gains critical mass, it should show up here in 2010 somehow.
- cbey is in the middle of the chart, despite owning the least amount of fiber in the group, which makes sense when looking at their revenue growth.
- itcd seems to have a seasonal capex burst in the fourth quarter, while Cogent Communications (NASDAQ:CCOI, news, filings) seems to have the opposite. I’ll have to see if that pattern extends further back.
- XO Holdings (news, filings) has been picking up the pace lately, I’m quite curious what their Q4 number will be when they get around to filing it.
- Sprint Nextel (NYSE:S, news, filings) wireline isn’t going anywhere unless it starts spending on growth, which there is no sign of yet.
Next up: EBITDA less Capex as a percentage of revenue. That’s something akin to an operating cash flow margin, not including the effects of working capital.
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