& cplSiteName &

APAC Telecom's Seismic Shift

Light Reading
News Analysis
Light Reading
2/8/2013
50%
50%

Asia/Pacific's maturing telecom markets are undergoing a "seismic shift," and many of the market assumptions about them no longer hold true, according to ratings firm Moody's Investors Service. Laura Acres, senior vice president of the firm's corporate finance group, says carriers in the region are shifting their focus away from capex and investment and towards returns to the shareholders. "Capex is plateauing, revenue [growth] is slowing, and margins are declining," she told attendees at the TMT Finance & Investment Asia Conference in Hong Kong this week. "People think of Asia as high growth, but growth is in line with GDP," she noted. Asia/Pacific telecom markets are no longer low penetration, Acres continued. "It is reaching super-saturation in some markets. Many countries have far more than 100 percent penetration. India actually has more mobile phones than toilets!" Operators can no longer rely on growth simply by getting phones into the hands of subscribers. Now their strategies are more focused on trying to build up postpaid subscriber numbers and/or developing value-added services (VAS). In Indonesia, where churn is commonly above 100 percent, carriers are looking to services such as mobile banking and transactions to retain customers. But Acres said that although margins are down from "very high levels" in the recent past, they are still at levels that European operators "would kill for." She named four operators -- Philippine Long Distance Telephone Co. (PLDT), China Mobile Ltd., and Indonesian mobile operators PT Telekomunikasi Selular (Telkomsel) and PT Indosat Tbk -- that still enjoyed EBITDA (earnings before interest, tax, depreciation and amortization) margins above 50 percent. At the other end of the market, competition and a consumer-friendly regulator in South Korea had helped drive EBITDA margin levels to well below 30 percent. The changing environment is stretching some telcos, however. Last August Moody's cut its rating on incumbent operator Singapore Telecommunications Ltd. (SingTel) to Aa2 from AA3 because of its plan to raise dividends despite relatively high debt. In addition, Malaysia's Axiata Group Berhad was downgraded to Baa2 because it had hiked returns while also boosting capex. Despite this, telecom operators -- and not just in Asia/Pacific -- are still very much favored by capital markets. "There just aren't enough telco bonds," stated one bondholder at the conference. Acres noted that Hong Kong Broadband Network Ltd. (HKBN) sought US$450 million from the bond markets in January and was over-subscribed 20 times. "This is for a company that really is not known very much," said Acres. "It actually went to the bond markets without a rating: no rating, not very well-known internationally and it still got $9 billion. On the whole this is an industry with utility-like cash flows. It is very resilient, especially in Asia." Asia/Pacific telcos have enough cash and cash flows to self-fund during the next 12 months without raising any incremental debt, she added. "We see a sector that is highly bankable." -- Robert Clark, contributing editor, special to Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
The Urgency of Commercial 5G Services

4|26|17   |     |   (0) comments


The progress of 5G has been closely monitored in the industry. At the 2017 Brooklyn 5G Summit, the sense of urgency for a commercial 5G launch had started to surface among operators.
Women in Comms Introduction Videos
How Diversity Helps Comcast Mirror Its Customer Base

4|26|17   |   2:55   |   (0) comments


Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
LRTV Huawei Video Resource Center
Mobile Operators & Video

4|25|17   |     |   (0) comments


Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Surprise! AT&T Markets 4G Advances as '5G Evolution'
Dan Jones, Mobile Editor, 4/25/2017
Did Verizon Outbid AT&T for Straight Path?
Dan Jones, Mobile Editor, 4/25/2017
First Year TIPs the Scale Toward Success
Denise Culver, 4/24/2017
Verizon: Small Biz in Cybercrooks' Crosshairs
Carol Wilson, Editor-at-large, 4/27/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.