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Telecommunications

Telecommunications company financial model, built free.

A three-statement Excel model for an integrated telecom operator, built from your own figures and checked to balance.

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We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Incumbent selling mobile, fixed broadband, voice and enterprise connectivity and IT services over its own networks, with wholesale revenue from other carriers, and often separable infrastructure (towers, fibre, data centres) valued on its own.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued three ways

    Discounted cash flow, trading multiples and sum of the parts, side by side.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours, on illustrative figures: every sheet as Excel draws it, or live.

Annual · 10 years · Low detail
Telecommunications company sample model.xlsx
The Summary sheet of the sample telecommunications company model

Illustrative figures: the sample describes no real business. The live preview shows values; your model’s Excel file has every formula.

How it works

How the model works for a telecommunications company.

  1. How it earns revenue3 formulas
    Wholesale access and capacity revenue · All telecom networks
    Wholesale access and capacity revenueAccess chargesCapacity charges
    Wholesale access and capacity revenue · All telecom networks
    Closing wholesale connectionsOpening wholesale connectionsNet additions
    Wholesale access and capacity revenue · All telecom networks
    Connection-months billed (average connections × months)Opening wholesale connectionsClosing wholesale connectionsshare of the year
  2. What drives its costs3 formulas
    Network operating costs · All telecom networks
    Network operating costsGroup revenue attributed to the networkNetwork costs as a share of revenue
    Cost of revenue · All product plans
    Cost of revenueHosting and infrastructureCustomer support and successFixed platform and support overhead
    New customers and sales and marketing · All product plans
    Sales and marketingCustomer acquisition spend (new logos)Account management and renewals
  3. What it invests in3 formulas
    Network build and asset base · All telecom networks
    Network capex (revenue × capex intensity)Group revenue attributed to the networkCapex intensity (capex ÷ revenue)
    Network build and asset base · All telecom networks
    Network depreciationDepreciation of the opening networkDepreciation of new capex
    Network build and asset base · All telecom networks
    Closing net book valueOpening net book valueNetwork capex (revenue × capex intensity)Network depreciation
  4. How it is funded3 formulas
    Debt
    RepaymentsScheduled repaymentsPrepayments from an equity raise and the cash sweep
    Debt
    Closing balanceOpening balanceDrawdownsRepayments
    Debt
    Interest expenseOpening balanceAll-in interest rateshare of the year
  5. How profit becomes cash3 formulas
    Billings and deferred revenue · All product plans
    Closing deferred revenueClosing ARRfrom recurring revenue and ARRShare of ARR billed in advanceBilling term invoiced in advance
    Billings and deferred revenue · All product plans
    BillingsSubscription revenue (recurring revenue and arr)from recurring revenue and arrClosing deferred revenueOpening deferred revenue
    Working capital
    Trade receivablesRevenuefrom statementsDebtor daysDays in period
What it covers

25 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • CPI forecastConsensus curve with long-run anchor
  • Operating expensesHeadcount build by function
  • Corporate costsFixed cost base indexed to CPI
  • Working capitalFull working capital
  • Income taxCorporate rate with tax losses
  • DebtAmortising term loan
  • Dividends and distributionsPayout of net profit
  • Discounted cash flow valuationDCF on free cash flow to the firm
  • Multiples valuationEV / EBITDA multiple
  • Interest-rate hedgingHedged share at a fixed rate
  • LeasesLease register
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Covenant tests and headroomLVR, gearing and ICR for property
  • Case selectionStackable stress toggles
  • Sum of the partsRegister of parts on mixed bases
  • Enterprise value to equity bridgeNet debt at the valuation date
  • Network build and asset baseCapex to revenue intensityCapital expenditure to build and maintain a network, with depreciation and net book value.
  • Wholesale access and capacity revenueConnections × access and bandwidth chargesRevenue from selling network access or capacity to other carriers, retailers and enterprises — access and bandwidth charges, dark fibre IRUs, backhaul and subsea capacity, MVNO hosting, or a regulated revenue cap.
  • Network operating costsNetwork costs as a share of revenueRunning costs of a network — site rental, energy, maintenance, field operations, backhaul and network IT.
  • New customers and sales and marketingNew customers per period × CACNew paying customers (logos, subscribers, gross adds) won each period for a plan, and the sales and marketing spent winning them (acquisition cost) and keeping them (account management). Carrying the spend per plan keeps new customers and the spend that wins them consistent; its roll-up lands in operating expenses.
  • Customer base and churnConstant churn rateCustomer roll-forward for a plan — opening customers + new customers − churned customers = closing customers.
  • Recurring revenue and ARRARR bridge on ARPA with price increases and net expansionThe ARR bridge for a plan (opening ARR + new-customer ARR + net expansion − churned ARR = closing ARR) and the subscription revenue recognised from it. Pricing (ARPA, seats, tiers, price increases) and net expansion (upsell, cross-sell, contraction) are part of each method.
  • Billings and deferred revenueBilled in advance (billing mix) with deferred revenueInvoicing of subscriptions and usage and the deferred revenue that results from billing in advance.
  • Cost of revenueCost per customer plus fixed platform costDirect cost of serving a plan's customers — hosting, customer support and success, app-store fees, royalties and (for telcos) wholesale access — so that gross margin can differ by plan. Use this in any model with product plans.
  • Device sales and costUnits × ASP at gross marginHardware unit sales, revenue and cost of goods for a device line, including handsets sold by telcos.
Key numbers

The numbers it tracks.

  1. 01subscribers by segment
  2. 02ARPU
  3. 03churn
  4. 04EBITDA by segment
  5. 05capex to sales
  6. 06operating free cash flow
  7. 07net debt to EBITDA
  8. 08dividend cover
Used for

What it is used for.

Also used for
  • Scenarios and sensitivities
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The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.