The impact of the economic crisis on the Spanish telecommunication sector: main challenges and opportunities. ENTER-NEREC. Javier Borrachero, CFA Madrid +34 91 789 8872 [email protected] June 2009. The impact of the crisis on the sector. Resilient but not immune.
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Resilient but not immune
Technological waves have boosted telecom spend
Telecoms seek cash flow protection
European telecoms operators - Adjusted equity free cash flow* (€bn)
* Adj EqFCF for stocks covered, excluding non-recurring items and spectrum purchases, constant currency
Fibre investment might be the wild card
TEF: capex 2008 €8.4bn, 2009 <€7.5bn (excluding spectrum auctions). Close to 50% in Latam
Telecom Italia (domestic): 2008 €3.5bn (15.2% capex/sales), 2009 €3.3bn, 2010 €13.0-13.5% capex/sales.
FTE: 2008 12.8% capex/sales, guidance 2009 12%-13% but has indicated it may go below 12% if market deteriorates. FTTH budget already delayed
Investment needed in 2009-10F
Spectrum costs are a downside risk for the telecoms sector as these costs are not fully reflected in consensus and management estimates
See report Mobile spectrum auctions, published 16 Oct 2008