MTN Consulting is focused on network operators & their technology supply chains, tracking the economics of the network operator business and assessing the big shifts that impact technology spending trends. Our coverage includes:
3 major network operator markets
- Telecom Network Operator (TNO)
- Webscale Network Operator (WNO)
- Carrier-Neutral Network Operator (CNNO)
190+ operators
Across the three major network operator markets in all key regions
40+ time series
10+ years’ market- and operator-wise data across quarters and years starting 2011
~50 reports published per year
- Market data and insight reports spanning –
- quarterly market reviews
- operator and vendor deep dives
- benchmarking and strategic assessments
- forecast/outlook analysis
![Defult Research Image](https://www.mtn-c.com/wp-content/themes/porto-child/img/office-scaled1.webp)
Latest report
Webscale Network Operators: 2Q24 Market Review
This report reviews the growth and development of the webscale network operator (WNO, or webscale) market since 2011. It covers 21 companies. In the most recent 12 months (3Q23-2Q24), webscalers represented $2.47 trillion (T) in revenues (+8.2% YoY), $301 billion (B) in R&D spending (+5.4% YoY), and $226B in capex (+15.4% YoY). They had $612B of cash and short-term investments (-8.5% YoY) on the books as of June 2024, and $527B in total debt (-3.6% YoY). The value of webscalers’ net plant, property & equipment (net PP&E) on the books as of June 2024 was $787B, up 19.8% YoY. Webscalers employed approximately 4.182 million (M) people at the end of 2Q24, up a bit from the June 2023 total of 4.085M. Below are key highlights from the report: Revenues: Single quarter revenues in 2Q24 were $614.4 billion (B), up 8.4% YoY. That pushed annualized revenues to $2.466 trillion. Topline growth has been driven by the big 4: Alphabet, Amazon, Meta (FB) and Microsoft. For four straight quarters, all of these companies have recorded double digit revenue growth, well above the rest of the pack. For the 2Q24 annualized period, the fastest growth came from Meta, up 24.3% versus 3Q22-2Q23, followed by Microsoft (+15.7%), Alphabet (13.4%), and Amazon (12.3%). The biggest dollar impact on growth in 2Q24 came from Amazon, as its revenues grew $13.6 billion from 2Q23 to end 2Q24 at $148B, up 10.1% YoY. The biggest curb on growth was Chinese ecommerce player JD.com, which recorded 2Q24 revenues of $40.2B, down $0.8B YoY (-2.0%). Capex: After declining 5% in 2023, webscale capex has been on a tear for the first two quarters of 2024, growing 25% and 51% in 1Q24 and 2Q24 respectively. That pushed 2Q24 annualized capex to $226.4 billion in 2Q24, an all-time high and up 15.4% YoY. Webscalers continue with big land purchases and long-term efforts to develop all-new data center campuses. However, the surge appears to be driven largely by technology spending, in particular purchases of servers (GPU and CPU) for data center facilities already up and running. From 44% of annualized capex in 2Q22, Network/IT and software capex was 54% of total capex for the last two quarters. The biggest capex outlays in 2Q24 came from Amazon ($17.6B), Microsoft ($13.9B), Alphabet ($13.2B), and Meta (FB) ($8.2B). These four account for about 80% of single quarter spending. They are the reason behind the unsustainable surge in the price of NVIDIA stock. Profitability: Webscale free cash flow margins averaged out to 18.6% for the 2Q24 annualized period, much higher than the 16.3% and 14.4% recorded in the annualized 2Q23 and 2Q22 timeframes. Average net profit margins are also strong, totaling 18.8% for the overall market in 2Q24 annualized, from 15.2% in 2Q23 and 16.3% in 2Q22. Meta (FB) and Microsoft have the highest overall margins across these two categories. Amazon is a perpetual drag on margins despite its size. Alibaba and Alphabet both reported FCF figures substantially lower than 2Q23, impacting the market average negatively. Employees: Headcount in the webscale market totaled to 4.18 million in June 2024, slightly up from 4.08 million in June 2023. This difference is negligible, considering the size of some of the webscalers and how quickly the ecommerce specialists in particular can change workforce levels. Headcount has been approximately 4.1 to 4.2 million steadily since late 2021. Some of the biggest webscalers are investing heavily in AI and GenAI, with one clear goal being to improve their internal cost efficiencies. This inevitably will mean fewer employees. Even within the ecommerce space, there is a rising use of robots and autonomous vehicles in the logistics chain. Webscale employment is unlikely to rise much from here, if at all. Regional trends: The Asia-Pacific region has been a drag on the market for several quarters. Webscale revenues in the Americas, Europe, and MEA have been growing in the low double digit range for a few quarters, but AP has been weak: 2Q24 revenue growth was 3% YoY, after a 2% increase in 1Q24. Weak Asian currencies and a very competitive ‘big tech’ market in China account for the gap. One factor is TikTok’s owner, ByteDance: this private company has exploded in the last 3 years, impacting negatively the measured growth of the publicly traded Chinese webscalers that we do track (Alibaba, Baidu, JD, and Tencent). The ByteDance surge also ate into the 2022-23 growth of some western webscalers, notably Meta (FB), but that effect has ebbed.
Latest reports
- August 23, 2024 Webscale Network Operators: 2Q24 Market Review
- August 14, 2024 Telecom’s biggest vendors – 1Q24 edition
- August 1, 2024 Telecommunications Network Operators: 1Q24 Market Review
- July 16, 2024 India’s CDOT continues to punch above its weight
- July 10, 2024 Telco vendors navigate major market shifts as 5G winter sets in
![Defult Research Image](https://www.mtn-c.com/wp-content/themes/porto-child/img/newsletter-slider1.webp)
![](https://www.mtn-c.com/wp-content/themes/porto-child/img/magazine1-1.webp)
MTN Consulting is focused on network operators & their technology supply chains, tracking the economics of the network operator business and assessing the big shifts that impact technology spending trends. Our coverage includes:
- 3 major network operator markets
- 190+ operators
- 40+ time series
- 50 reports published per year
Latest report
Webscale Network Operators: 2Q24 Market Review
This report reviews the growth and development of the webscale network operator (WNO, or webscale) market since 2011. It covers 21 companies. In the most recent 12 months (3Q23-2Q24), webscalers represented $2.47 trillion (T) in revenues (+8.2% YoY), $301 billion (B) in R&D spending (+5.4% YoY), and $226B in capex (+15.4% YoY). They had $612B of cash and short-term investments (-8.5% YoY) on the books as of June 2024, and $527B in total debt (-3.6% YoY). The value of webscalers’ net plant, property & equipment (net PP&E) on the books as of June 2024 was $787B, up 19.8% YoY. Webscalers employed approximately 4.182 million (M) people at the end of 2Q24, up a bit from the June 2023 total of 4.085M. Below are key highlights from the report: Revenues: Single quarter revenues in 2Q24 were $614.4 billion (B), up 8.4% YoY. That pushed annualized revenues to $2.466 trillion. Topline growth has been driven by the big 4: Alphabet, Amazon, Meta (FB) and Microsoft. For four straight quarters, all of these companies have recorded double digit revenue growth, well above the rest of the pack. For the 2Q24 annualized period, the fastest growth came from Meta, up 24.3% versus 3Q22-2Q23, followed by Microsoft (+15.7%), Alphabet (13.4%), and Amazon (12.3%). The biggest dollar impact on growth in 2Q24 came from Amazon, as its revenues grew $13.6 billion from 2Q23 to end 2Q24 at $148B, up 10.1% YoY. The biggest curb on growth was Chinese ecommerce player JD.com, which recorded 2Q24 revenues of $40.2B, down $0.8B YoY (-2.0%). Capex: After declining 5% in 2023, webscale capex has been on a tear for the first two quarters of 2024, growing 25% and 51% in 1Q24 and 2Q24 respectively. That pushed 2Q24 annualized capex to $226.4 billion in 2Q24, an all-time high and up 15.4% YoY. Webscalers continue with big land purchases and long-term efforts to develop all-new data center campuses. However, the surge appears to be driven largely by technology spending, in particular purchases of servers (GPU and CPU) for data center facilities already up and running. From 44% of annualized capex in 2Q22, Network/IT and software capex was 54% of total capex for the last two quarters. The biggest capex outlays in 2Q24 came from Amazon ($17.6B), Microsoft ($13.9B), Alphabet ($13.2B), and Meta (FB) ($8.2B). These four account for about 80% of single quarter spending. They are the reason behind the unsustainable surge in the price of NVIDIA stock. Profitability: Webscale free cash flow margins averaged out to 18.6% for the 2Q24 annualized period, much higher than the 16.3% and 14.4% recorded in the annualized 2Q23 and 2Q22 timeframes. Average net profit margins are also strong, totaling 18.8% for the overall market in 2Q24 annualized, from 15.2% in 2Q23 and 16.3% in 2Q22. Meta (FB) and Microsoft have the highest overall margins across these two categories. Amazon is a perpetual drag on margins despite its size. Alibaba and Alphabet both reported FCF figures substantially lower than 2Q23, impacting the market average negatively. Employees: Headcount in the webscale market totaled to 4.18 million in June 2024, slightly up from 4.08 million in June 2023. This difference is negligible, considering the size of some of the webscalers and how quickly the ecommerce specialists in particular can change workforce levels. Headcount has been approximately 4.1 to 4.2 million steadily since late 2021. Some of the biggest webscalers are investing heavily in AI and GenAI, with one clear goal being to improve their internal cost efficiencies. This inevitably will mean fewer employees. Even within the ecommerce space, there is a rising use of robots and autonomous vehicles in the logistics chain. Webscale employment is unlikely to rise much from here, if at all. Regional trends: The Asia-Pacific region has been a drag on the market for several quarters. Webscale revenues in the Americas, Europe, and MEA have been growing in the low double digit range for a few quarters, but AP has been weak: 2Q24 revenue growth was 3% YoY, after a 2% increase in 1Q24. Weak Asian currencies and a very competitive ‘big tech’ market in China account for the gap. One factor is TikTok’s owner, ByteDance: this private company has exploded in the last 3 years, impacting negatively the measured growth of the publicly traded Chinese webscalers that we do track (Alibaba, Baidu, JD, and Tencent). The ByteDance surge also ate into the 2022-23 growth of some western webscalers, notably Meta (FB), but that effect has ebbed.
Latest reports
- August 23, 2024 Webscale Network Operators: 2Q24 Market Review
- August 14, 2024 Telecom’s biggest vendors – 1Q24 edition
- August 1, 2024 Telecommunications Network Operators: 1Q24 Market Review
- July 16, 2024 India’s CDOT continues to punch above its weight
- July 10, 2024 Telco vendors navigate major market shifts as 5G winter sets in
In The Press
-
-
-
-
April 2024
What lies ahead for India’s Vodafone Idea -
Our Three Core Offerings
![7](https://www.mtn-c.com/wp-content/uploads/2023/04/7.webp)
Research
MTNC’s research is focused on communications network infrastructure, a market attracting $3.5 trillion in annual operator revenues. Our goal is to provide credible, holistic assessments of where the NI market currently stands and where it is headed. Reports address market and technology trends, key players, and country dynamics.
![2-1[1]](https://www.mtn-c.com/wp-content/uploads/2023/04/2-11.webp)
Subscription
MTNC bundles its research into an annual subscription service called “Global Network Infrastructure”. GNI provides clients with an end-to-end view of the network operator business, assessing the big shifts that impact technology spending trends. GNI clients include technology vendors (chips, network equipment and software, IT services), operators, regulators, and investors.
![8](https://www.mtn-c.com/wp-content/uploads/2023/04/8.webp)
Consulting
Our consulting services include: scenario planning; market sizing, forecasting, and analysis; organizational strategy; marketing support; competitive benchmarking; and, due diligence support for M&A and PE transactions. We bring experience and independence to the table, and access to the proprietary databases generated by our GNI subscription program.
In The Press
Southeast Asia emerging as the new battleground for cloud service providers
Fierce Network
Hyperscalers gain network infrastructure market share
Inform, TM Forum
Can CSPs realize opex reductions through AI?
Inform, TM Forum
What lies ahead for India’s Vodafone Idea
Fierce Network
SK Telecom’s enduring belief in metaverse spells hope for the technology
Fierce Network
BT confirms Starlink tests as it explores remote connectivity options
Fierce Network
Forecast on Telecoms Capex, Revenue and Business Models
Telecomlead
What does Qualcomm terminating its chip deal with Iridium mean for satellite telecom?
SDxCentral
ZTE stock slides on weaker earnings, falling revenue
LightReading
AT&T, Vodafone, AST hit a 5G satellite milestone
SDxCentral
Amazon, SpaceX extend reach with Vodafone, KDDI satellite deals
SDxCentral
Vodafone expands horizons with Amazon’s Project Kuiper
Fierce Network
Blogs
![img](https://www.mtn-c.com/wp-content/uploads/2022/10/2-3-4-5-6G-graphic-e1666084692549.jpg)
With each passing day, the 2G and 3G layers of telcos' mobile networks are looming as heavy loads on operating expenses (opex). That's due to multiple issues but especially energy consumption and related costs. With the exist
read more![img](https://www.mtn-c.com/wp-content/uploads/2022/09/2.webp)
Vendors continue to wrestle with supply chain constraints in the telecom sector. That's clear from several recent vendor earnings reports, including those issued by Dell, HPE, and Ciena in recent weeks. Telco spending, though
read more![img](https://www.mtn-c.com/wp-content/uploads/2022/07/4.webp)
Telco network spending has been on the rise over the last few quarters. Vendor sales of network infrastructure to the telco vertical ("Telco NI”) totaled $55.5B in 1Q22, up 5.7% YoY. On an annualized basis, Telco NI revenue
read more![img](https://www.mtn-c.com/wp-content/uploads/2022/06/5.webp)
Telco NI's top 3 Telcos buy products & services from dozens of different vendors. Our research tracks 130. Some are relatively easy to classify into a segment, e.g. Corning, a "cabling & connectivity" vendor in our
read more![img](https://www.mtn-c.com/wp-content/uploads/2022/09/2.webp)
It was the Greek philosopher Heraclitus who coined the phrase, “Change is the only constant in life.” Well over a thousand years later, Benjamin Franklin continued the thought, saying, “When you are finished changing
read more![img](https://www.mtn-c.com/wp-content/uploads/2022/05/scott-webb-U5kQvbQWoG0-unsplash-scaled-1.webp)
One of the many telecom stats we track is "labor costs", i.e. what telcos spend in salaries and benefits to support their workforce. Not a lot of other analyst firms track labor costs, if any. It's not an easy one to track, a
read moreOur Research Bundles
![img](https://www.mtn-c.com/wp-content/uploads/revslider/slider-3/carlos-muza-hpjSkU2UYSU-unsplash-e1569492547518.jpg)
![img](https://www.mtn-c.com/wp-content/uploads/2019/10/shutterstock_124630423.jpg)
Meet Our Partners
Stay in the loop
Get our latest blog and research alerts by signing up below.