Fitch: Korea Telcos Weakening; China Telcos Solid

  • Now, Putrajaya denies giving RM100 million grant to bank-rejected firm

    Putrajaya today denied that it had awarded NSE Resources Corporation Malaysia Sdn Bhd (NSERC) a RM100 million grant, as claimed by a PKR leader. Malaysiakini reported that Deputy Science, Technology and Innovation Minister Datuk Abu Bakar Mohd Diah today revealed the list of grant recipients by his ministry. The list, which has more than... …

  • Obama to seek fresh start with Malaysia in overdue visit
    Obama to seek fresh start with Malaysia in overdue visit

    Barack Obama will this weekend become the first US president to visit Malaysia for nearly 50 years, seeking to put decades of uneasy relations behind him as both cast wary eyes on a rising China. Obama – who visits Saturday-Monday – is expected to tout the US's friendship with the economically thriving moderate Muslim nation. As one of... …

  • Malaysian jailed 8 weeks for Singapore border dash

    A Malaysian motorist who tried to dodge Singapore's border control has been jailed for eight weeks after a judge rejected his pleas that he was lost and overheating in his car, officials said today. Koh Chin Had, a 42-year-old poultry seller, tailgated another car passing through a raised barrier on April 13, triggering a security lockdown on... …

  • PKR denies holding prayers for 'martyr' Karpal

    PKR has denied that it will hold a 'thanksgiving' ceremony as well as prayers for 'martyred' DAP lawmaker Karpal Singh at PKR de facto leader Anwar Ibrahim's home tomorrow. This followed two widely circulated e-posters promoting the event online, bearing the logo of Anwar's fan club, the Anwar Ibrahim Club (AIC). "Example of Umno lies," Anwar tweeted when asked about the event said to be prayers for " syuhadah (martyr) Karpal". The poster features Anwar raising his hand in prayer behind …

  • KL school not allowed as Karpal memorial venue

    The Education Department has rejected the use of a school in Kuala Lumpur for a memorial service for Karpal Singh as it is perceived as a political event, said its organisers DAP in a press conference today. The memorial service was scheduled to be held tomorrow night at SJK(C) Chung Kwo near Jalan Loke Yew, Kuala Lumpur, said acting DAP chairperson Tan Kok Wai. …

  • Student group not happy over Obama’s Universiti Malaya visit
    Student group not happy over Obama’s Universiti Malaya visit

    Student group Solidariti Mahasiswa Malaysia (SMM) is against US President Barack Obama's (pic) scheduled visit to Universiti Malaya on Sunday where he is expected to host a town hall session with young leaders from Southeast Asia. In a statement, the student group said that this was because Obama had disappointed many quarters, including... …

KUALA LUMPUR (Nov 26): The rating headroom for Korean telcos will remain low in 2013 due to ongoing weaknesses in operating margins, according to Fitch Ratings.

In report entitled “2013 Outlook: China and Korea Telecommunications China Solid, Korea Weakening” released on Monday, Fitch however said that the outlook for the Chinese telco sector was stable with no significant change expected in credit metrics next year.

The rating agency said that for Korea, significant marketing expenses for high-end long-term evolution (LTE) subscriber acquisitions would offset the positive impact from average revenue per user (ARPU) improvement.

Meanwhile, Fitch forecasts that financial leverage will improve slightly - through positive free cash flow generation - due to lower capex following the substantial completion of LTE-related investments in 2012.

Despite the expected improvement in leverage, negative rating action may occur in 2013 should operating margins fall further from 2012's levels, said Fitch.

Continuing improvement in the supply of low-cost smartphones should drive a modest growth in revenue for Chinese telecom operators.

“Competition and handset subsidies should increase, but Fitch does not expect operators to lose pricing discipline.

“Both China Mobile Limited (China Mobile, 'A+'/Stable) and China Telecom Corporation Limited (China Telecom, 'A'/Stable) will continue to demonstrate solid performance,” Fitch said.

Overall, Fitch said it  expects China Mobile to sustain its strong net cash position, and China Telecom's funds flow from operations (FFO)-adjusted net leverage to remain stable even after the acquisition of the code division multiple access (CDMA) network from its parent.

“However, acceleration of the LTE licensing process may lead to higher capex which may threaten these companies' credit metrics.

“The report provides further details on Fitch's view of demand, growth drivers, competition, capex and regulation for Korea and China telcos,” it said.

 

Follow @YahooMalaysia on LINE for daily news updates.

Comments on Yahoo pages are subject to our link to Comments Guidelines. You are responsible for any content that you post. Yahoo is not responsible or liable in any way for comments posted by its users. Yahoo does not in any way endorse or support comments made by its users.

  • MH370 passenger’s partner tells of strange email from sacked Fox officer The Malaysian Insider
    MH370 passenger’s partner tells of strange email from sacked Fox officer

    The partner of an American passenger aboard the missing Malaysia Airlines flight MH370 has spoken about how a Fox executive who was recently sacked by the news station had contacted her offering to raise funds on her behalf. Sarah Bajc, whose partner Philip Wood is among the 239 people on board the missing plane, told the Sydney Morning Herald... …

  • MB: Only 29 days of water left in Selangor Malaysiakini

    Although heavy rain led to flash floods in parts of the Klang Valley yesterday, the Selangor government has said that taps will run completely dry in 29 days if rationing is not continued. "For now, we must continue with rationing as the level at the main dam, the Sungai Selangor dam, is below the critical level and can only last 29 days if rationing is not conducted," Menteri Besar Abdul Khalid Ibrahim said in a statement.   "We really hope the rakyat understands this situation and supports …

  • Dr Ling’s son chose wine over woman, court hears The Malaysian Insider
    Dr Ling’s son chose wine over woman, court hears

    The son of former MCA president Tun Dr Ling Liong Sik today reached an out of court settlement with his ex-girlfriend in a breach of contract suit over seven properties registered under their joint names. Ling Hee Leong and businesswoman Teh Chee Yen agreed to settle out of court after he took the stand briefly and testified that he had chosen... …