Finance and Business Environment (Telecommunications and ICT)

The role of financial management in any business will be set out, with detailed application to the telecommunications network operators’ functions. You'll gain a thorough grounding in, and a good understanding of, the application of, the following:

• The primary financial statements consisting of the balance sheet, profit and loss account, and cash flow statement, and how to read them
• Depreciation, ebitda, profit, cash flow, working capital, gearing, cost of capital, share price dynamics and dividend policy. Valuation of companies
• Management accounting - the application of management accounting to the business so that you can apply the principles to your own company circumstances
• Corporate finance - understanding the different sources of finance to businesses and the importance of gearing and financial risk in structuring the company balance sheet

The UK, European and worldwide legal and regulatory frameworks will be presented, showing the constraints and opportunities offered to incumbent and other operators and service providers. Besides interconnect issues, the UK Telecommunications Strategic Review will be described and its impact analysed, together with the role of OFCOM in regulating what's becoming a converged market. This covers the vast range of broadcast, entertainment, and telecommunications applications. You'll understand the drivers and constraints involved in regulating businesses, together with the opportunities that arise. You'll also gain an appreciation of the legal principles involved. 


The key aspects of a business case will be introduced, covering its role in corporate governance, the essential content, the financial case and supporting evidence. You'll be able to create your own credible and plausible business cases for capital and current account projects, including the use of discounted cash flow (DCF) techniques, evaluating the cost of capital and deciding on financing options. You'll be able to analyse the regulatory and legal risks and plan to mitigate them. 


This will look at the cost dynamics of a telecommunications infrastructure, covering access and core – fundamental to all networks (including railways, airlines, electricity supply, etc.), fixed and variable cost, effect of volume on unit cost, cost and revenue apportionment, and long-run costs. In particular, the lectures will examine how the network size, structure and choice of technology, together with the systems support infrastructure, impact on the financial performance of a network operator. You'll understand the particular relevance of this to the development of next generation networks (NGN) and the provision of new-wave services.