Moody's industry outlook reflect the rating agency's expectations for the fundamental business conditions in the industry over the next 12 to 18 months.
"Moody's-rated telecommunications companies' average aggregate year-on-year revenue growth will be around 4.0%-5.0% over the next 12-18 months, similar to the growth rate in 2014," says Dhruv. "Although EBITDA will continue to increase, companies' average EBITDA margin will contract slightly, and capital spending will decline, as telecom companies complete their 3G or 4G investments.
"Deepening mobile-phone penetration, continued competition and increased revenue contribution from data services will continue to pressure margins, but it will remain healthy", adds Dhruv. Moody's expects the average EBITDA margin for telecom companies to be 38.0% in 2015, slightly lower than the 38.2% in 2014.
Moody's expects growth rates to be 1%-2% in developed marketsSingapore, Japan and Koreaand 5%-8% in emerging marketsChina, Thailand and Indonesiaafter excluding the impact of China's new value-added tax. Aggregate absolute EBITDA will increase about 2% year on year.
Finally, average capital spending as a percentage of revenue will decline to around 23% in 2015. Debt-to-EBITDA ratios will also decline, driven mainly by EBITDA increases, says Moody's.
Steady recurring cash flows continue to support industry liquidity and resilience even during economic downturns, says the rating agency, and telecom companies still benefit from easy access to bank funding and capital markets.
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