PETALING JAYA: The current newsflow on 5G is not expected to affect telecommunication companies’ near-term share price performance, says Affin Hwang Capital research.
“We do not expect the 5G roll-out to lift the telcos’ capex significantly, judging from South Korea’s recent 5G rollout,” it said, while maintaining its neutral rating on the sector. It added that for telco investors, the factors to watch for include the timing of the spectrum allocation, fees and capex.
“The Malaysian government has yet to announce the spectrum band to be allocated for 5G - the 3.5GHz band is currently use for the satellite communications.
“Separately, we expect the allocation of 700MHz spectrum to take place by end-2019,” it said in a research report yesterday.
While MCMC chairman Al-Ishsal Ishak has said that the government has no plans to profit from the award of the 5G spectrum, Affin Hwang believes that competition among the telcos, global trend and federal government’s plan to reduce budget deficits may still weigh on the spectrum fees.