The benchmarking methodology of CapEx STC

Benchmark Results and Approach

            At the very start, the envelope benchmarking methodology of CapEx has been described. In the Benchmark ration, operator metrics were collected from the fellow operators to create the foundation of comparison. The second and third quartiles for each and every ratio were determined on the basis of fellow group for creating the base of evaluating the upper and lower ranges of the envelope of CapEx for each component. In the section of STC metric, the second and third quartiles for and every benchmark ratio were multiples by the STC metric which is corresponding for deriving the lower and upper ranges for envelope component of Cap Ex. Meanwhile, in the envelope range of CapEx, a weighted average of the lower and upper ranges was taken for each and every envelope component of CapEx. The total envelope of CapEx was measured by summing the midpoint for each envelope component of CapEx.

            Moving on, benchmarking phases have been explained. First one is Headline Benchmarks which are described as efficiency metrics which are comparable over operators in different maturities and markets. The second one is TCO Benchmarks which are described as the total domain or platform indicators that assess the total spent against the complete demand of service. The third one is Asset Benchmarks which is explained as asset-level metrics while analyzing just how aspects are maintained, utilized, and dimensioned.

The last one is Materials Benchmarks which is explained as metrics that cover expected costs of limited speed and mobile roll out. In the section of 4G maturity, the standard of maturity of 4G would result in CapEx’s smaller proportion in terms of roll out. In the retiring dated assets, phase out methods like 3G or 2G, or copper retirement for relief of balance sheet. In the All-IP migration move to every all-IP network for building costs, labor, and lowering hardware.

            Further in the developments of key CapEx, telefonica concentrating on the initiatives of cost saving, especially as they come at the end of Ftth investment’s end of cycle. The costs of deployment have been reduced by them up to 50% during the recent 5 years, through the reduction of 60% in incidents of network when migrating to fibre with the reduction up to 41% in the new CPE’s installation time. It also focuses on virtualization instead of taking lead on 5G. First of all, virtualizing network components which are non-critical and secondly, virtualizing complex elements with even greater savings.

            In the end, the key developments of CapEx have been explained. As the challenger, Zain KSA in a very competitive market is expanding 4G intensely as the demand of data consumption is highly increasing. In Q2018, higher D&A is present due to the acquisition of additional equipment and spectrum. The network quality of Zain and competitiveness was optimized with a 1.1 billion SAR investment in the expenditure of capital in 2017 along with the achievement of spectrum of 1800MHz.