Following up on yesterday's post on EBITDA margin trends through Q3/2010, here is a quick look at both relative revenue growth and capital expenditures as a percentage of revenue. As always, the latest automatically updated version can be find on my Competitive Telecom Trends page, but in this post we try to take a snapshot and use better formatting. In this case, we include the partial data for Zayo on the capex chart, but not yet on the revenue growth chart, as Zayo's publicly available numbers don't go back far enough and if even if they did they would be so skewed by M&A as to be useless for comparison. With no further ado, here is the revenue chart going back to Q1/2008:
By and large, there are no surprises here as recent trends continued without disruption in Q3. Sprint continued to trend steadily downward as it manages the business for cash, while both Level 3 and Deltacom remained mostly stable after churning off so much in 2009. CBeyond, Abovenet, Cogent, and TW Telecom continued their steady march upward, while Global Crossing, Paetec, and XO continued to tread water.
There's a bit more to see on the following chart of Capex normalized by revenue:
One can see that Level 3's recent spending has clearly broken with previous trends, crossing no less than three lines on its way to 14% of revenue. Cogent also saw a surge toward its highest spending levels, and at the top of the chart for the past two quarters is in fact Zayo which has been spending a higher percentage of its revenue on capex than even AboveNet recently. Four providers spent less than 10% of revenue on capex: Sprint, Paetec, Deltacom, and Global Crossing - which actually seems rather logical.
Now, that chart is a bit messy because capex is so lumpy. To get smoother (but less current) look, here's what it looks like using trailing twelve month data:
As with EBITDA margins, on this graph we don't see many lines cross. One exception is the CLEC CBeyond, which is still spending at higher levels than others with little metro fiber as it builds out into new markets, but the rate has been falling steadily as their revenue base catches up with that buildout. Zayo is firmly established between solid growers Abovenet and TW Telec0m, and given the latest two quarters plus its acquisition of AFS since then, their capex as a percentage of revenue will probably rise further soon.