Bangkok--21 Oct--Fitch Ratings
Link to Fitch Ratings' Report: 2017 Outlook: Thai Telecommunications Sector (http://www.fitchratings.com/site/re/889242)
Fitch Ratings says in a new report that the Thai telecommunications industry will remain under pressure in 2017 from slow revenue growth, margin pressure, and high investment requirements.
The rate of growth in mobile data revenue is likely to slow, and the pace of data subscribers has started to decelerate in 1H16 as smartphone penetration rises.
Margins are likely suffer as we expect marketing costs to remain high with the ongoing promotion of 4G services. In addition, spectrum fees and the continued expansion of 4G networks will drive capex investment. As a result, the industry's FCF is likely to be negative, and financial leverage will rise for some operators.
Nevertheless, our rating Outlooks on Advanced Info Service Public Company Limited (AIS, BBB+/AA+(tha)/Stable) and Total Access Communication Public Company Limited (DTAC; BBB/AA(tha)/Stable) remain Stable. This is mainly because their ratings already incorporate the likelihood of low EBITDA growth and negative FCF. Still, deterioration in their credit metrics also suggests that greater pressure is building on the ratings.
The report, "2017 Outlook: Thai Telecommunications Sector", is available on www.fitchratings.com or by clicking on the link in this media release.