The pandemic's impact across the region depends on the severity of domestic lockdowns.
The pandemic's impact across the region depends on the severity of domestic lockdowns.

Asia Pacific telecoms on course for muted growth, 5G delays: Fitch

ANI | Updated: Jun 26, 2020 11:22 IST

Singapore, June 26 (ANI): The average revenue growth for Asia Pacific telecom sector will be flat to low-single-digit this year (2019: 4 per cent) before recovering to pre-pandemic levels in 2021, according to Fitch Ratings.
However, credit risk remains manageable, reflecting the sector's resilience during the coronavirus pandemic.
A majority of the 20 companies in our portfolio are on stable outlook with only six on the negative outlook of which half have close links with parents or are sovereign-support driven.
"We expect companies to manage balance-sheet strength through cost-cutting and capex management including delaying 5G capex and reducing dividends," said Fitch in a report titled 'What Investors Want to Know: Coronavirus Impact on Asia Pacific Telecoms.'
There are two contrasting patterns in the rollout of 5G in the region amid the pandemic. Most markets have deferred discretionary capex to conserve cash or prioritise necessary capacity investment while advanced markets like South Korea, China and Singapore are pressing ahead with 5G plans this year to lead technology innovation.
The pandemic's impact across the region depends on the severity of domestic lockdowns. South Korean telecoms and Indonesian towers are the least likely to be affected due to recurring revenue.
The reliance of the Thai economy on tourism and the Philippines' on remittance may slow the recovery of the domestic telecom markets. This is in addition to the markets' predominantly large prepaid base, which is subject to greater cash flow volatility.
"Elsewhere, we see a gradual recovery from H2 20 as easing competition offsets weaker enterprise and international-roaming segments," said the Fitch report. (ANI)

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