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Telcos set to break revenue record across APAC, including Indonesia
Telecommunication firms (telcos) across Asia-Pacific are expected to grow next year at their fastest pace since 2016, thanks to soaring demand for data and broadband in the region.
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Clear signal: A technician services a 4G base transceiver station (BTS) tower in Bendungan Hilir, Central Jakarta, on July 13, 2018. The information and communication technology industry has maintained growth throughout the COVID-19 pandemic. (JP/Dhoni Setiawan)
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elecommunication firms (telcos) across Asia-Pacific are expected to see revenue grow next year at the fastest pace since 2016, thanks to soaring demand for data and broadband in the region.
Investment in 5G networks is expected to rise further in Asia-Pacific emerging markets like Indonesia, China, India, Malaysia and the Philippines, with capital expenditure (capex) intensity to be around 30-33 percent, according to a report released by Moody’s Investors Service on Wednesday.
Capex intensity is the ratio of capex in relation to sales.
Moody's senior vice president Annalisa di Chiara highlighted that capex growth at telcos in the region’s more developed markets –namely Australia, Hong Kong, South Korea, Japan, Singapore and New Zealand– was estimated to stagnate at just 16-18 percent.
“APAC’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 percent through 2023,” she said, as quoted in the report.
Meanwhile, Moody’s vice president and senior analyst Nidhi Dhruv noted that most APAC telcos were facing profitability pressure due to stiff competition, although they could still fund their capex from cash flows.
“Sector-wide average leverage will remain stable at 2.3x to 2.5x, supported by EBITDA growth and relatively unchanged debt levels from 2021,” she said.
