jannievanzyl
Telecoms expert
The problem I have with a raw application of an NQ model where "Network quality is a function of investment over subscriber numbers" because it ignores the value of the investment - in essence an operator could spend 10 billion rand on the wrong overpriced technology (EDVO?) - whilst another operator could take a gamble on a particular technology which industry pundits are not pushing at the time and essentially secure a bargain for their consumers.
Depreciation of telecommunications assets is probably a useful starting point but lets face it accountants don't fully incorporate the technological shift that can occur and assets will depreciate without proper reference to software changes and revisions and that sort of thing.
A ECN operator who is investing sensibly all the time will inevitably have the best network.
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Didn't a particular fixed line network have a very high "investment to user" ratio with underwhelming network quality impair their assets (investment ratio) by 12 billion rand but I haven't seen an equivalent reduction in the quality of the network.
I did say it's simplistic. But it does show the relationship between number of sub, network quality and investment.