NON-RATING ACTION COMMENTARY

5G Capex Risk to Shape APAC Telecoms’ Capital Management

Sun 01 Nov, 2020 – 10:10 PM ET

Journalists can download the full report by clicking on this link: : Fitch Ratings 2021 Outlook: Asia-Pacific Telecoms

Fitch Ratings-Singapore/Sydney-01 November 2020: Fitch Ratings expects a gradual EBITDA recovery and stable leverage for Asia-Pacific (APAC) telecoms, supporting our stable sector outlook for 2021. Telecom operators are likely to bolster cash generation ahead of the 5G investment upcycle, driving rational competition in most markets.

Fitch expects limited rating changes over the next 12-18 months, with 14 of our 16 public Foreign-Currency Issuer Default Ratings on Stable Outlook. The Negative Outlook on Telekom Malaysia Berhad (TM, A-) and Bharti Airtel Limited (BBB-) are sovereign-driven. However, rating headroom is narrowing for most of our APAC telecom portfolio, underlining the importance of staggered investment, dividend cuts and non-core asset sales in preserving balance-sheet strength. Data monetisation is likely to take centre stage post the coronavirus pandemic in 2021, which will determine operators’ organic deleveraging capacity.

Expensive airwaves in pending spectrum auctions in India, Malaysia, Indonesia and Thailand could squeeze telecom operators, leaving them with less flexibility to weather the 5G capex upcycle. Other issues for investors to watch include the sustainability of tariff hikes in India’s wireless services, the standalone network costs associated with Singapore’s 5G investment and the extent of competition brought about by a new entrant in the Philippines.

The full report, “Fitch Ratings 2021 Outlook: Asia-Pacific Telecoms”, is available on MailScanner has detected a possible fraud attempt from “74n5c4m7.r.eu-west-1.awstrack.me” claiming to be www.fitchratings.com or by clicking on the link in this release.

Contact:

Janice Chong
Director
+65 6796 7241
Fitch Ratings Singapore Pte Ltd.
One Raffles Quay
South Tower #22-11
Singapore 048583

Steve Durose
Managing Director
+61 2 8256 0307

Media Relations:

Peter Hoflich, Singapore, Tel: +65 6796 7229, Email: peter.hoflich@thefitchgroup.com
Leslie Tan, Singapore, Tel: +65 6796 7234, Email: leslie.tan@thefitchgroup.com

Additional information is available on MailScanner has detected a possible fraud attempt from “74n5c4m7.r.eu-west-1.awstrack.me” claiming to be www.fitchratings.com

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