SINGAPORE: Asia-Pacific telecommunication companies’ (telcos) will call in their highest revenue growth since 2016, excluding 2021’s low base effect, according to Moody’s Investors Service in a report.
“Asia-Pacific’s data and broadband consumption will thrive while further consolidation will temper competition over the next few years.
“These buoyant conditions will propel revenue at a pace of 4% to 4.5% through 2023,” said Annalisa di Chiara, a Moody’s senior vice-president.
Meanwhile, capital expenditure (capex) intensity for telcos in Asia-Pacific emerging markets such as China, India, Indonesia, Malaysia and the Philippines will be around 30% to 33% as 5G investment rises, said the agency.
On the other hand, the capex level would be lower, at 16% to 18%, for telcos in the region’s developed markets of Australia, Hong Kong, Japan, South Korea, Singapore and New Zealand, similar to the level over the past two years.
“Most Asia-Pacific telcos can fund their capex with cashflows despite profitability pressure from ongoing stiff competition.
“Sector-wide average leverage will remain stable at 2.3 times to 2.5 times, supported by earnings before interest, taxes, depreciation, as well as amortisation growth and relatively unchanged debt levels from 2021,” it added.