Valuation in Telecom: Why Operational Efficiency Is Worth More Than Growth

Written by Rogerio Antunes, CEO of Anlix.

For a long time, growth in telecom was analyzed almost exclusively by scale metrics: customer base, network expansion, revenue growth. But this model is beginning to show its limitations.

What the market is now pricing in more rigorously is another variable: Quality of operation behind growth.

At the end of the day, valuation isn't just about how much a company grows: it's about How much of this growth is efficiently converted into predictable cash generation. And that completely changes the logic of the analysis. Historically, telecom companies have been valued based on multiples of EBITDA. But the very concept of multiple carries an implicit question: Is this EBITDA sustainable, scalable, and capital efficient?

Recent market reports reinforce this shift in perspective:

• Studies of McKinsey & Company They indicate that operators with greater operational maturity may have OPEX reductions between 20% and 30% with automation and digitization;
• Bank analyses such as Goldman Sachs Studies show that companies with more predictable cash flow tend to trade with... Significant premiums in EBITDA multiples;
• Initiatives linked to the concept of autonomous networks, promoted by entities such as TM ForumThey point to structural gains in efficiency and scale without a proportional increase in cost.

In other words, the market is beginning to signal an important shift in how telecom companies are valued: growth remains relevant, but on its own, it no longer sustains the perception of value. Investors, funds, and the market itself have begun to look more closely at the operation's ability to transform scale into efficiency, predictability, and consistent cash generation.

Ultimately, two companies can present similar revenue and EBITDA figures and still have completely different valuations. What truly differentiates them is the quality of the operation behind those results.

• Ability to grow without increasing costs proportionally;
• Predictable revenue and stable margins;
• Efficiency in converting revenue into cash.

That's why we see a clear movement:

•  Efficient operations tend to support higher EBITDA multiples;
   Growth with inefficiency tends to put pressure on the cost per user over time.

In other words, growth alone is not enough. It is necessary to grow with capital discipline.

And this discipline begins on three fundamental fronts:

• Deductions (taxes) → tax efficiency
• Direct costs → operational efficiency
• Expenses → rigor in capital allocation

• It reduces the marginal cost of growth;
• increases the return on invested capital (ROIC);
• It increases the capacity for reinvestment.

This transforms the operation into a strategic asset — not just a cost center.

How to transform operational efficiency into value, in practice.

 

Discussions about operational efficiency often remain in the conceptual realm. But in practice, it depends on one key factor: maturity of the operation.

In the context of telecommunications, this maturity is directly linked to the evolution towards models of autonomous networkswhere the operation ceases to be reactive and becomes increasingly predictive and automated.

It is precisely in this transition that we see the greatest gains in efficiency and, consequently, in value creation, eeThis operational evolution requires a gradual journey to maturity.

Operational efficiency evolves progressively: first, through the organization and standardization of processes; then, with increased visibility into operations and the use of operational intelligence to support decision-making; and finally, by reducing dependence on manual activities, using automation to scale operations with greater productivity, consistency, and efficiency.

The evolution we have observed in the telecommunications market is not merely technological. It is, fundamentally, financialbecause it directly impacts margins, capital efficiency, and the capacity for sustainable growth.

• Less manual intervention → lower structural cost
• Shorter response times → greater capital efficiency
• Fewer failures → lower churn and less revenue loss.

The result is a leaner, more predictable, and more scalable operation. Exactly the attributes that support long-term valuation.

It is precisely this progression that guides how Anlix structures its new portfolio:

🔹 Flash 1: Essential Operation
Focus on operational discipline, cost control, and margin protection.

In many providers, when the growth of the customer base begins to increase the complexity of operations at a faster rate than the company's ability to absorb costs, the first step towards operational maturity is to build a predictable, organized, and controllable operational base, reducing waste, increasing operational discipline, and creating the necessary foundations for sustainable growth.

🔹 Flash 2: Scale and observability
Focus on predictability, governance, and data-driven decision making to reduce churn.

Operations with low visibility typically act reactively: identifying problems only after the user experience has already been impacted.

On the other hand, operations with greater observability are able to anticipate degradations, act preventively, and reduce friction in the subscriber experience. The result is a more predictable operation, a healthier subscriber base, and higher quality revenue over time.

🔹 Flash 3: Advanced Automation
Focus on structural efficiency and economies of scale without a proportional increase in costs.

Many operations manage to grow revenue, but they fail to decouple growth from a proportional increase in structure, staff, and operational complexity.

This is precisely where automation begins to have a direct impact on valuation.

More automated operations:

• They reduce the marginal cost of scale.
• They increase operational efficiency.
• They improve response time.
• They reduce manual dependence.
• and increase the predictability of the operation.

More than just automating tasks, the goal is to build operations capable of acting in an increasingly autonomous, predictive, and scalable way.

This is the stage where concepts like "Zero Touch" and network autonomy cease to be mere visions of the future and become concrete competitive differentiators. The focus here is precisely on accelerating this transition, allowing providers to grow with greater structural efficiency and less operational pressure over time.

Growing by generating value.

More than a technological evolution, the telecom sector is entering a new logic of value creation. For many years, customer base growth and infrastructure expansion were the main indicators of success. Now, the market is increasingly valuing operational efficiency, predictability of results, and the ability to grow sustainably. In this context, the discussion is no longer just about expanding operations, but mainly about how efficient those operations are at transforming growth into long-term value.

Thus, the central question becomes:

• How much capital does this growth consume?
• how efficient is the operation behind it,
• and how well this operation can sustain value creation in the long term.

Because, increasingly, that's what the market differentiates: companies that merely grow and companies that grow by generating value.

Sustainable growth begins with efficient operations.

If you want to reduce structural costs, increase operational predictability, and prepare your provider for more efficient growth, Anlix can help. Explore the Flash portfolio and discover how to evolve your company's operational maturity at every stage of the journey.

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