Tuesday, November 18, 2014

Declining Voice, Texting Revenues Pressure Mobile Ops in South Asia, SE Asia

Declining voice and text messaging revenues, plus huge investments in next generation networks will put extreme pressure on South Asia and Southeast Asia mobile service provider cash flow, resulting in minimal or negative free cash flow, Fitch Ratings said in November 2014.

“Revenue growth will be limited to low-to-mid single digit percentages as fast-growing data services offset declines in traditional voice and SMS revenues,” Fitch Ratings said.

Mobile service providers in the Philippines, Sri Lanka and Thailand plan to invest 25 percent to 30 percent of their revenue to build new networks or acquire new spectrum.

In Singapore, the issue is dividends, as service providers there plan to distribute 80 percent to 100 percent of net income to shareholders in the form of dividends.

Overall, the noteworthy observation is that mobile service providers in South Asia and Southeast Asia face the same sorts of problems as service providers in developed regions: cannibalization of voice, text messaging and international revenues, as well as competition.

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