Moody’s: Telcos in S’pore, M’sia, Indonesia pay highest dividend to govt


“In Malaysia, where dividends to the government total 11.9% of the three leading telcos’ aggregate revenue, the government holds stakes in each of those three telcos – Celcom Axiata Bhd, Maxis Bhd and Digi.Com Bhd." Moody's said.

PETALING JAYA: Telcos in Singapore, Malaysia and Indonesia pay the highest dividends to their respective governments, according to Moody’s rating agency.

In a report yesterday, it said Malaysia, second after Singapore, paid a total dividend of 12% of aggregate revenue to the government, through the state-owned entities.

“In Malaysia, where dividends to the government total 11.9% of the three leading telcos’ aggregate revenue, the government holds stakes in each of those three telcos – Celcom Axiata Bhd, Maxis Bhd and Digi.com Bhd.

“These stakes are held through government-related entities such as Khazanah Nasional Bhd, which is the country’s sovereign wealth fund, Employees Provident Fund, which is a central provident fund under the supervision of the Finance Ministry.

“However, the government is the single largest shareholder in only one telco... Celcom, ” it said.

It pointed out that Singapore, Malaysia and Indonesia have more government-owned incumbent telcos than other countries.

Despite the higher dividend payment to the government, Moody’s said the regulatory framework in countries where telcos paid higher dividends – Singapore, Malaysia and Indonesia – were generally stable and predictable.

But regulations in the countries where the companies paid a higher price at spectrum auctions – India, Thailand, Bangladesh and Pakistan – were less predictable and often politicised.

“In Malaysia, the Malaysian Communications and Multimedia Commission (MCMC) reacted quickly to the proposed merger of Axiata Group Bhd and Telenor in May, by issuing M&A guidelines two weeks after the announcement.

“However, MCMC has also implemented regulations that have been detrimental to the operators, ” it said. Moody’s said that in 2018, MCMC implemented the Mandatory Standard on Access Pricing, which regulates broadband prices and caused Telekom Malaysia Bhd’s (TM) revenue to contract 2.2%.

Nonetheless it said TM and Axiata’s ratings benefit from one notch of uplift in ratings because of government support.

“By contrast, regulations in Thailand, India, Bangladesh and Pakistan have tended to be more unpredictable and often politicised.”

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