Fitch: Singapore Telcos' Credit Profiles Intact Despite New MNO
Fitch believes the potential entry of a new mobile network operator (MNO) will not intensify competition in the telecoms sector that much in 2016 and 2017. The new entrant would face huge capital outlay, spectrum limitation, and cost disadvantages in the absence of a regulated wholesale pricing framework. Fitch forecasts the industry's revenue to grow by the low-single-digits and operating EBITDA margins to remain steady at around 32% in 2016.
Average industry capex should decline to around 11%-12% of revenue (2015: 13%), as all three telcos have largely completed their long-term evolution (LTE) network expansion.
A significant increase in competition due to a change in IDA's stance to regulate wholesale pricing for the mobile market and/or implement infrastructure sharing could change the outlook on the sector to negative.
The report "2016 Outlook: Singapore Telecommunications Services" is available on www.fitchratings.com.