FORVIS Benchmark Study

More than half (51%) of rural telcos in the latest Forvis Rural Telecommunications Benchmark Study received broadband grants in 2022. Of the 167 companies that participated in this year’s study, 85 received grants.

The 85 companies accepted about $600 million in grants. In 2021, 69 companies received grants, which totaled $336 million.

The median grant size is currently running at $2.7 million.

Forvis is an accounting firm that specializes in rural telecom.

Rural Telecommunications Benchmark Study

Companies that received grants had higher operating income as a percentage of revenues in comparison with companies that didn’t receive grants, according to the latest study. For companies that received grants, operating income was 17.5% of revenue. For companies that didn’t receive grants, that number was 15.6%.

The companies that receive grants also had higher OIBDA as a percentage of operating income – 37.9% for companies that received grants, compared to 36.1% for companies that didn’t receive grants. As Forvis explains in a press release about the benchmark study, “OIBDA is an important financial metric to measure growth in cash flows and total leverage ratios.”

Source: FORVIS

Overall, rural telecom OIBDA decreased between 2021 and 2022, Forvis said. For 2021, it was 37.6% and for 2022 it was 36.1%.

Operating Expenses on the Rise

Another important change between 2021 and 2022 was a bigger increase in operating expenses compared with operating revenue. Operating expenses increased 5.1% in 2022 (5.2% without including depreciation expense). That’s almost twice as much as the 2.6% increase in total operating revenue.

On average, operating income for 2022 was 15.6% of operating revenues, down from 16.7% in the previous study.

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