[ET Net News Agency, 24 October 2018] Moody's Investors Service said that in 2019 the
telecommunications sector in Asia Pacific (APAC) will face stronger competition and
increasing commoditization.
"All APAC markets in which Moody's-rated telecommunications companies operate will face
strong competition in 2019, with new entrants spurring competitive intensity in Singapore,
Japan and Australia," said Nidhi Dhruv, a Moody's Vice President and Senior Analyst.
"And, while 4G will remain the dominant technology used by telecommunications companies
in APAC, 5G will gain some traction in 2019-20. We expect Japan, Korea and Australia to
lead the region in rolling out 5G services in 2019," added Dhruv.
Moody's analysis is contained in its just-released report titled "Telecommunications -
APAC: 2019 Outlook," which is authored by Dhruv.
Moody's report covers 11 markets in APAC: Australia, Bangladesh, China, Hong Kong,
India, Indonesia, Japan, Korea, Malaysia, Philippines and Singapore.
Moody's said that while overall revenue growth for all 11 markets will prove slow, the
slowing revenue growth situation is most pronounced in emerging markets, where revenue
growth will fall to 3.0%-3.5% though 2019 versus 3.9% in 2017.
Comparing overall revenue growth across APAC with GDP growth, Moody's said that
companies as a whole will show modest revenue growth of 2.0%-2.2%, with such growth
lagging average GDP growth of about 4.6% for the region.
Moody's also says that high shareholder returns and capital expenditure levels will
continue to temper free cash flow generation. Consequently, companies will look to
diversify revenues as traditional telecommunications revenues contract, leading to more
cross-industry partnerships.
Nevertheless, Moody's outlook for the sector in APAC is stable through 2019, with
companies in the region likely to show relatively stable leverage and debt levels over the
next 12-18 months. Moreover, while liquidity is weakening, such levels remain supported by
the companies' access to the banks and bond market. (KL)