Telecoms operators are falling short when it comes to capital investment in the post-pandemic world, according to a new study published this week.

That is perhaps a surprising conclusion, given the rate at which telecoms operators the world over are throwing money into spectrum auctions and 5G network rollouts. But according to EY, telcos are simply not agile enough, and are still displaying too much rigidity when it comes to capital spending.

The professional services company this week released its Global Capital Operations and Innovation Study (COInS), which surveys 500 executives in the technology, media and entertainment, and telecommunications (TMT) space worldwide. 87% of respondents identified as ‘leaders’ – defined by levels of maturity in key areas and representing 60% of the sample; the remaining 40% were characterised as ‘laggards’ – believe recovery from the Covid-19 pandemic lies in maintaining levels of capital investment.

However, as many as 82% of all 500 respondents proved to be unclear on who in their organisation is accountable for delivering results relating to capital investment projects, which EY says throws into question governance practices. Further, TMT companies are struggling to meet capital investment objectives, with 63% of respondents saying they fail to achieve forecast returns, and 66% agreeing that the costs of their capital programmes escalate as timeframes lapse.

So how important is this for telecoms companies and their peers elsewhere in the TMT space? Pretty important, if they want to capitalise on growth opportunities in the market.

“The hyper scaling of content streaming services, the rollout of 5G and the ubiquity of the Internet of Things [IoT] all give rise to new business models, customers and revenue streams for TMT companies,” said Daniel Theander, EY Global Capital Operations and Innovation Suite – Solution Leader, in a statement.

“Taking advantage of these opportunities in a post-pandemic world will be defined by well-executed capital investments, yet the survey unearths a spectrum of shortcomings across the capital life cycle,” Theander said. “To recover and thrive, businesses must embed agility into the way they manage capital – driven by trusted data to enable predictability, and active governance to improve accountability through transparent communication.”

Agility. It’s a word we have got used to hearing in telecoms, although usually in reference to systems, processes and ways of working.

It seems that telcos are lacking in agility when it comes to planning their capital investments, and that could hurt them.

83% of survey respondents said the pandemic highlighted the need to be more agile with mechanisms for allocating capital, but a third feel they are still unable to flex to meet changing conditions.

As many as 42% of telcos admitted to having an approach to capital investment planning that is too static and rigid, which is a higher percentage than those polled in the media and entertainment, and technology spaces. Telcos are also the least likely to regularly review and adjust investments, and many struggle to find sufficient data to add credibility to the decision-making process.

EY puts a positive spin on it, noting that as such telecoms companies have the biggest opportunity for improvement when it comes to agility. Hmmm…