Network Investments, Staff Challenges and More: 2022 Telecommunications Benchmarking Study

The Moss Adams 2022 Telecommunications Benchmarking Study provides important data and takeaways influenced by this economic landscape, enabling you to assess where your business ranks against other telecommunications companies in key industry areas. The study compiles 2021 data from 115 companies. Participants comprised 55 cooperatives and 60 privately held businesses. Participants came from 41 states and included 70 companies under legacy rate-of-return and 45 companies under model-based support—ACAM I, ACAM II, or Alaska Plan. This review of the benchmarking data focuses on broadband internet, staffing resources, network investment, and overall profitability. See the following takeaways:

• Broadband Internet: Circumstances in the rural telecommunications space continue to foster significant customer growth, speed tier upgrades, and investment in fiber optic network facilities where the median benchmarking study participant experienced 8.2% growth in broadband customers from 2019 to 2020, followed by 5.2% growth from 2020 to 2021.
• Staffing Resources: the data appears to support that companies realized some efficiencies in serving customers over the past several years, despite an overall drop in employee-to-customer ratio from 8 employees for every 1000 customers in 2016, to 7 employees for every 1000 customers in 2021. Though, total revenue per employee continues to trend upward.
• Network Investment: The median company reported the per connection gross network investment at $10,765, however, this figure is down from $12,152 in 2020 which was a peak year over the past 10 years. However, federal funding, such as the Infrastructure Investment and Jobs Act (IIJA) is expected to greatly impact this category.
• Overall Profitability: The industry again experienced strong profitability results in 2021; albeit slightly down in operating income before depreciation and amortization and operating margins from 2020. Overall, broadband internet revenues increased by 13%, bolstering profitability while maintaining 2020 levels of federal Universal Service Funding (USF).