Connectivity Capex Intensity is Sort of in the Middle

If you had a choice, would you rather operate in the connectivity service provider, passenger airline, banking, pharma or retail industries. That actually is a better way of describing possible preferences among industries that require lots of debt, rather than comparing such industries to capital-light industries such as software. 

One might agree that the connectivity business is somewhere in the middle of all industries where it comes to capital intensity.

Connectivity service providers are fond of comparing themselves to app providers, but that is not so instructive. The better comparison is with other industries that require lots of capital. Looked at that way, connectivity service provider businesses do not fare unfavorably. 

Sure, debt is always a key issue for the capital-intensive connectivity industry. But some other industries also face similar capital intensity or borrowing-intensive business models. So telcos are not unique in requiring debt management skill. Nor are telcos and connectivity providers unusually challenged, compared to many other industries that also require lots of debt issuance. 

Company	Debt ($B USD)	Debt to Equity Ratio	Debt to EBITDA Ratio	Debt to Revenue Ratio	Debt to Cash Flow Ratio
AT&T	175.2	1.3	1.7	0.4	0.9
Verizon	156.8	1.2	1.5	0.4	0.8
China Mobile	180.8	1.1	1.4	0.3	0.7
NTT	129.6	1.0	1.2	0.2	0.6
Deutsche Telekom	115.2	0.9	1.1	0.2	0.5
Orange	76.8	0.7	0.9	0.2	0.4
BT Group	67.2	0.6	0.8	0.2	0.3
Singtel	57.6	0.5	0.7	0.1	0.3
SoftBank	56.0	0.5	0.7	0.1	0.2
America Movil	50.4	0.4	0.6	0.1	0.2
Telefonica	48.0	0.4	0.5	0.1	0.2

Granted, connectivity networks are capital intensive. But some other industries also are capital intensive, while some are far less capital intensive (such as software). 

Industry	Debt to Equity Ratio	Debt to EBITDA Ratio	Debt to Revenue Ratio	Debt to Cash Flow Ratio
Telecommunications	0.9	1.1	0.2	0.5
Airlines	2.0	2.5	0.5	1.0
Banks	1.5	1.8	0.4	0.8
Retailers	1.0	1.2	0.2	0.5
Pharma	0.6	0.8	0.1	0.3
Meta	0.5	0.6	0.1	0.3
Apple	0.3	0.4	0.05	0.2
Alphabet	0.2	0.3	0.05	0.1
Microsoft	0.1	0.2	0.03	0.1

Revenue and cash flow, in relation to debt burdens, is what matters.