 "5G spectrum, spectrum, 5G")
Tough competition and advantages of scale will drive consolidation in the Asia Pacific telecoms industry ahead of higher 5G investments, according to Fitch Ratings.
The 5G technology will favour larger operators with strong balance sheets which are expected to contribute to diverging credit quality over time among telecom operators, it said.
Scale becomes increasingly important for telcos to drive cost efficiencies and manage cash flows amid a subdued growth environment.
Data monetisation remains a challenge in most markets, said Fitch, aggravated by price competition and the lack of differentiation among product offerings.
Rating headroom is low for four of the nine companies, indicating these four companies have limited capacity to take on more debt at their current rating levels.
Spectrum assignments and renewals will take place over the next 18 months in India, Australia, Thailand, Korea, Malaysia and Hong Kong, underlining the emphasis on capital preservation through staggered investment, dividend reduction and asset sales.
PT Telekomunikasi Indonesia Tbk is the only company with high rating headroom while Singapore Telecommunications Ltd has the least, said Fitch.
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