Inside The Top Operators of 2011
The annual Top Operator rankings are developed by surveying teleport operators in many nations on their revenues and revenue growth and supplementing the results with financial data from publicly-traded firms. From this information, WTA publishes rankings of the Global Top 20 (companies by revenue including independents and satellite/fiber operators), the Independent Top 20 (companies by revenue excluding satellite and fiber operators), and the Fast 20 (based on year-over-year revenue growth, including independents and satellite/fiber operators).
The 2011 Top Operators, announced in November of that year, included companies with combined annual revenues of US$12.8 billion. Of this revenue, $9.7bn came from respondents that had submitted data to WTA consistently for the past five years. These companies posted a compound annual growth rate (CAGR) of 17.2% from 2007 to 2009, with total revenues rising $1.3bn over the period. But CAGR fell to 6.3% for the period from 2009 to 2011, when sales grew only $579m. For the five-year period, the group grew total revenues by $1.9bn for a CAGR of 7.6% - a still-impressive performance during the worst financial crisis since the Great Depression.
The Top Operator rankings are based on financial data, but respondents also addressed questions on facilities, services, markets, pricing and business results. Like the financial data, their answers offer a useful "snapshot” of the entire sector at the end of 2011, because respondents included independent operators large and small delivering service around the world. What did their responses reveal?
- Pricing Changes. One-quarter of independent teleport operators reported the ability to raise prices on their core services in 2011, up slightly from 2010, while 54% reported no price change for core services since 2010. More than 41% reported being able to increase prices for the resale of satellite capacity but only 18% said the same for terrestrial capacity.
- Pricing Trends. An evaluation of responses to our pricing question since 2005 reveals that 2007-08 were bullish years for the teleport sector, when 40% or more of respondents reported being able to raise prices for core services. Since then, year-over-year pricing changes have resumed more normal levels, with 20-30% reporting price increases, 10-20% reporting price declines and the majority reporting stable prices.
- Terrestrial and Satellite Transmission Pricing Continue to Head in Opposite Directions. The pricing of satellite capacity for resale has followed a similar trend to that of core teleport services but has been more prone to the upside and more volatile. By contrast, more teleport operators continue to report price declines for terrestrial capacity than price increases, which makes that capacity more competitive year after year.
- Volume of Business Increases. Across all market segments, +60% of teleport operators reported that the volume of business increased from 2010 to 2011 while only 10-18% reported declines in total volume as measured by revenue.
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