Jan 25, 2019 (LBO) – Credit investors in the Asia-Pacific telecommunications sector have key questions on telcos’ growth prospects amidst rising competition, the investment case for 5G, regulatory pressures, and the implications of these factors, Fitch’s Ratings said.
Fitch has published a compendium of key questions received from investors and our views on each issue, following investor meetings at end-2018 and in January 2019.
“We believe the sector rating headroom has come down in the face of some of these pressures, underscoring our expectations of neutral or slightly negative free cash flow, and weak revenue and EBITDA growth,” the agency said.
“We expect only small incremental spending for 5G network rollout in 2019; the measured approach also reflects the lack of a solid business case for 5G and the limited device availability.”
Amongst the key risks for telcos is the inability to boost EBITDA, as heightened competition in many markets weakens the ability to price data to capitalise fully on the rapid growth in data consumption.
The full report, “What Investors Want to Know: Asia-Pacific Telecoms”, is available at www.fitchratings.com.