Flagging concerns over the financial health of Indian telecom sector, global credit rating agency, Moody's Investors Service in its latest report has said that among the Asian countries, India will be the only country where telecom sector's revenue will continue to decline for sometime amid unprecedented price competition spurred by a new entrant.
As per Moody's recent report on ‘Asia Pacific's telecoms industry’, Indian operators’ profitability will remain under pressure over the next 12-18 months, as pricing competition remains fierce. However, it said that revenue growth in developed markets will remain in line with expected GDP growth of around 1.5%. It maintained a stable outlook for Asia Pacific's telecoms industry, with the expectations of year-on-year average revenue growth of about 2.0%-2.5% over the next 12-18 months. The report also raised expectations that EBITDA growth will be 0-2% but noted that average margins will contract slightly next year.
The rating agency estimates headwinds from technological changes to Asia Pacific's telecoms industry despite stable outlook. The report is also hoping that Asia Pacific's telecoms companies will continue to expand into digital media, advertising, and mobile payments to future-proof their revenue streams.