While navigating continued inflation challenges, increased competition, and regulatory and legislative uncertainty, the rural telecommunications industry has experienced growth in broadband services and revenues over the past year, but saw a decrease in operating income.
These and other findings are presented in the 2024 Rural Telecommunications Benchmark Study, released today by Forvis Mazars, LLP, one of the largest public accounting and consulting firms in the United States, which has long-standing expertise in serving clients in the rural telecommunications industry.
The latest edition of the study is based on longitudinal data from 2016–2023, submitted by 157 telecom companies, primarily located in the central United States. The report benchmarks findings against more than two decades of financial and operational information compiled by Forvis Mazars in previous industry studies. It is one of the most comprehensive studies of its kind in the telecom industry.
According to co-authors Eric Babler and Mike Spratt, the industry continues to experience expense increases reflective of inflation rates.
“As inflation and regulatory requirements drive up operating costs, rural telecom companies face increased pressure to maintain profitability while continuing to serve their communities,” said Babler.
“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,” added Spratt.
Other key findings in the study include:
- Total operating expenses increased by 3% in 2023, more than double the increase in operating revenues from the previous report.
- During the past 23 years, increased access to broadband services has resulted in higher broadband revenues and a decline in voice service revenues. Internet revenues are now the second-largest source of revenue, behind network access service revenues.
- As of June 2024, participating companies had accepted $950 million in federal, state, and local government broadband grants, compared to $600 million in grants as of 2022. This represents a 50% increase in broadband grants from 2022.
- These grant programs include state-administered broadband grants funded by state resources, state-apportioned federal CARES Act funds, American Rescue Plan Act funds, as well as federal broadband grant programs administered by the Rural Utilities Service (RUS) and the NTIA, including the Broadband Equity Access and Deployment (BEAD) Program.
Forvis Mazars has extensive experience providing tax, assurance, and consulting services to the rural telecom industry. The firm serves more than telecommunications clients nationwide. The annual benchmark study draws from this list, with each company receiving a company-specific benchmark report.
Download the 2024 Rural Telecommunications Benchmark Study.
