The impact of capital expenditure on the financial performance of a telecommunications company: case study Ooredoo Algeria

Abstract

This study investigates the impact of capital expenditure (CAPEX) on the financial performance of Ooredoo Algeria. The research focuses on the short-term effects of CAPEX, using net profit margin (NPM) as the key financial performance indicator. Adopting a quantitative method, the research relies on secondary data drawn from quarterly financial statements between 2017 and 2023. Two econometric models were estimated using the Ordinary Least Squares (OLS) regression method. The empirical findings reveal that CAPEX had a significant positive effect on financial performance, confirming the study’s main hypothesis and its subsidiary hypotheses. These results provide valuable insights for financial managers and strategic decision-makers in the telecommunications sector, underscoring the critical role of efficient CAPEX allocation in achieving short-term profitability.