Stable outlook seen for Asian telcos

The telecommunication sector, represented by Philippine Long Distance Telephone Co. (PLDT) and 22 other firms in the region, has a “stable” outlook based on credit health forecasts for the next 12 to 18 months, Moody’s said. “In the near term, the cost of acquiring customers and building infrastructure to cope with exponential growth in data usage from smartphones is eroding Asia-Pacific telecom operators’ high margins,” the report conceded. “[But] over the longer term, tiered and postpaid pricing plans, coupled with reduced churn, will have a positive credit impact as traffic shifts from voice to data and video applications,” the report read. The Philippines was noted to be following trends in the region in terms of smartphone penetration, a factor which signals a growing demand for data services on top of voice plans. “In some emerging markets such as China, Indonesia, and the Philippines, a similar pattern is occurring as smartphones become the first and main connection for later adopters of broadband technology.” PLDT, with credit score Baa2 and outlook stable, was thus cited for moves to invest in information and communications technology and offer cloud computing services. And while the Philippines, along with India, Pakistan and Indonesia, have among the world’s highest rate of customer turnover, moves to beef up content should help retain subscribers and boost revenues, Moody’s said. Mediaquest Holdings, Inc., a subsidiary of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld.