Light Reading
The focus of telecom network operators in Asia/Pacific is changing, according to Moody's executive

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
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Hot Topics
Comcast Streams Back to School
Mari Silbey, Independent Technology Editor, 8/21/2014
Level 3 Does Big Data Differently
Carol Wilson, Editor-at-large, 8/21/2014
T-Mobile: Small Cells? We're Dense Already
Dan Jones, Mobile Editor, 8/22/2014
Verizon Launches QR Code Security Solution
Carol Wilson, Editor-at-large, 8/26/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Like Us on Facebook
Twitter Feed