Module II· Multiples & Sector SpecificsIntermediate
Question
How do you use EV/Subscriber in telecom and media valuations?
Answer
Mechanics
EV/Subscriber (pay-TV, mobile, streaming, pay-per-use software): enterprise value divided by the number of subscribers.
Logic
Value per customer, independent of the marketing-spend cycle.
Rule of thumb
EV/Subscriber × customer lifetime (years) × ARPU = the implied customer lifetime value. Application:
- Mobile: typically $300–600 per subscriber for large listed operators.
- Pay-TV: $600–1,200 per subscriber.
- Streaming (Netflix): higher multiples because of global scale. Pitfall: subscriber quality varies (postpaid vs. prepaid, premium vs. basic) → build a 'blended ARPU' into the multiple.
Deep diveShow more details
Pitch tip
In a telecom valuation, show EV/Subscriber and EV/EBITDA side by side — EV/Subscriber for the strategic-buyer logic (customer-acquisition value), EV/EBITDA for financial discipline.