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Telecom revenue growth likely to continue in Asia

Aug 27. 2015
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By The Nation

Emerging Asia's large population, economic growth and voracious appetite for data services will boost revenues across most of the region's telecom markets, according to a new report by Standard & Poor's Ratings Services titled "Emerging Asia Telecom: Low

"Strong growth in emerging Asia’s telecom markets has lured substantial capital investment and ramped up competition.

"And the region faces significantly greater country and regulatory risks compared [with] developed markets," said S&P credit analyst Paul Draffin.

He added that the company considered the most hotly contested of the emerging Asian telecom markets to be Bangladesh, Pakistan and Sri Lanka, closely followed by India, Indonesia, the Philippines and Thailand. These markets remain vulnerable to periodic bouts of intense price competition that can undermine returns and investment.

 

Greatest risk

From a regulatory perspective, S&P views the greatest risk to telecom operators to be in Bangladesh, India, Pakistan, Sri Lanka and Thailand, although proposed reforms could help to moderate risks in some of these markets, such as India and Thailand.

Nevertheless, the firm expects telecom companies to maintain relatively low debt levels, moderating the risks and sustaining their credit quality in the next few years.

This fiscal prudence is likely to continue even as telecom operators fund ongoing network investment, spectrum payments, and mergers and acquisitions in the pursuit of growth.

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