Asia-Pac telcos face fight for credit quality

The sector maintained credit quality over the past six months, despite the pressure from intensifying competition and regulation.

This is according to Standard & Poor's Ratings Services titled "Industry Report Card: Asia-Pacific Telecoms Withstand Intensifying Competition And Regulation To Maintain Credit Quality" examines the key issues affecting creditworthiness of 27 companies rated by Standard & Poor's across Australia and New Zealand, South and South East Asia, South Korea, Greater China, and Japan.

"We expect the sector's generally healthy balance sheets and strong and resilient cash flow to underpin stable credit quality for most rated players in the next few years," Standard & Poor's credit analyst Paul Draffin said. "The region's investment in next-generation networks should also allow telecoms to capture datarelated revenue growth associated with the proliferation of smartphones, internet television, and other dataintensive applications, which should help to offset ongoing declines in traditional voice revenue."

The report examines the regulatory risks and technological development facing the region's rated players. It also discusses the sector's capital-expenditure trends and capital demands, and other credit-related challenges across the region.