This month’s brand value snapshot from Markables covers the wireless telecom sector. A comparison reveals brand valuations of 44 wireless telecom businesses between 2000 and 2014 in 24 countries. Some prominent brands in the peer group are Nextel, Leap, Cingular, Vivo Móvel, E-Plus, debitel, O2, Metro, Orange, Mobinil, and more.
Low brand multiples: Although perceived as an industry with high advertising spending, brand value multiples for the sector are rather low. The major reason is that assets other than brand are typically much more valuable (i.e., spectrum licenses, customer relations, and the network itself).
The interquartile range analysis shows a mean trademark royalty rate on revenues of 1%, and a mean trademark value of 5% of enterprise value, for sales multiples of 2x revenues. The multiples are consistent with the variation of factors such as territory (emerging versus developed), revenue size, or period (pre- or post-financial crisis). Not surprisingly, the multiples increase slightly with profitability. The reported brand values are in contrast to some publications that advocate higher brand values in the telecom sector, including the Brand Finance Telecoms 500 ranking.
Markables has a database of over 6,500 trademark valuations published in financial reporting documents of listed companies from all over the world. The database reports value solely for the use of trademarks (not bundled with other rights).
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