The latest Forvis Mazars Rural Telecommunications Benchmark Study, which reveals financial numbers for 2023, characterizes the broadband industry as showing “resilience despite challenges.”
The 157 companies participating in the study accepted about $950 million in grants in 2023. By comparison, companies in the 2022 study received $600 million in grants. The 2023 number is an increase of more than 50% over 2022.
According to the report, “These grant programs include state-administered broadband grant programs utilizing state funds, state-apportioned federal CARES Act funds, and American Rescue Plan Act funds, along with federal broadband grant programs administered by the NTIA and the Rural Utilities Service (RUS).”
Forvis Mazars is an accounting firm that specializes in rural telecom.
Rural Telecommunications Benchmark Study Findings
According to the latest study, companies that received grants had slightly lower operating income as a percentage of revenues compared to companies that didn’t receive grants. For companies that received grants, operating income was 14.6% of revenue. For companies that didn’t receive grants, that number was 15.2%.
The companies that received grants, though, had higher OIBDA as a percentage of operating income — 36.1% for companies that received grants, compared to 35.3% for companies that didn’t receive grants.
Mike Spratt, co-author of the Forvis Mazars Rural Telecommunications Benchmark Study, said in a press release, “Broadband grant programs are crucial for offsetting financial strains, providing essential funding to help expand and upgrade networks, ensuring rural areas stay connected despite economic difficulties.”
Operating Expenses Rise, but More Slowly
Another important change between 2022 and 2023 was a smaller increase in operating expenses compared with operating revenue. Operating expenses increased 3% in 2023 (3.1% without including depreciation expense). That’s about 60% lower than in 2022, when there was a 5.1% increase in total operating revenue.
On average, operating income for 2023 was 14.9% of operating revenues, down from 15.6% in the previous study.
