Asia-Pacific telecoms withstand intensifying competition, regulation – S&P

KUALA LUMPUR: The Asia-Pacific telecommunications sector maintained credit quality over the past six months, even though intensifying competition and regulation are pressuring many companies in several key regional markets, according to Standard & Poor's Ratings Services.

It said this in a report titled "Industry Report Card: Asia-Pacific Telecoms Withstand Intensifying Competition And Regulation To Maintain Credit Quality" published on Tuesday, July 19.

The report examined the key issues affecting creditworthiness of 27 companies rated by S&P across Australia and New Zealand, South and South East Asia, South Korea, Greater China, and Japan.

Its credit analyst Paul Draffin said S&P expects the sector's generally healthy balance sheets and strong and resilient cash flow to underpin stable credit quality for most rated players in the next few years.

"The region's investment in next-generation networks should also allow telecoms to capture datarelated revenue growth associated with the proliferation of smartphones, internet television, and other dataintensive applications, which should help to offset ongoing declines in traditional voice revenue,” said Draffin.

The report examines the regulatory risks and technological development facing the region's rated players.

It also discusses the sector's capital-expenditure trends and capital demands, and other credit-related challenges across the region.