Confessions of a Telco Executive: The 7 Deadly Sins
sebastianbarros.substack.com
Sept. 8, 2025, 1:55 p.m.
We spend less than 1% of our revenue on R&D. In 2022, AT&T, with more than $120 billion in revenue, spent just over $1.2 billion on research and development. Vodafone and Telefónica are in the same range. Compare that with Alphabet, which allocates approximately 15% of its $280 billion in revenue to R&D, or Meta, at nearly 20%. Even Apple, often described as conservative, spends more than 7%.Our spending goes elsewhere. CAPEX intensity for the sector runs at 15% to 18%. For Vodafone, €7.8 billion on €45 billion of revenue; for AT&T, roughly $24 billion a year. Spectrum auctions, towers, and fibre consume everything. Then come dividends. European operators yield between 5% and 8%. AT&T yields around 6. Debt service takes another 10% of revenue. The sector carries more than $1.7 trillion in debt, with leverage at three times EBITDA in many cases. After those obligations, there is nothing left for invention.