= Ultimate Parent


Technology, Media, & Telecom

Global Home > Technology, Media, & Telecom

5G to Deliver Growth to Korean Telcos

South Korean telecommunications companies' profitability is likely to continue to improve as the high marketing costs during the early stage of 5G adoption will be increasingly offset by the benefits of larger 5G subscriber bases and easing competition.

Alibaba's Rating Headroom Sufficient to Contain COVID-19 Impact

Fitch Ratings says Alibaba Group Holding Limited (A+/Stable) has large rating headroom to contain the negative impact of the coronavirus outbreak in China, which has led to lockdowns of many cities, causing disruption to supply chains, manufacturing activities and logistics.


More on the Coronavirus


Coronavirus Supply-Chain Disruptions Largest in Electronics

Computer and electronic components face the biggest risk of global supply-chain disruptions stemming from China's coronavirus outbreak. Chinese factory shut-downs will affect output in global industries reliant on Chinese inputs even where there is no direct exposure to lower demand in China.

India's Telecom-Related Regulatory Dispute Still Event Risk for GAIL, OIL and POWERGRID

Fitch Ratings continues to treat any payments that three India-based companies - GAIL (India) Limited (BBB-/Stable), Oil India Limited (OIL, BBB-/Stale) and Power Grid Corporation of India Ltd (POWERGRID, BBB-/Stable) - may have to make under a demand notice from the Department of Telecom as an event risk for the companies' ratings.

5G Spectrum Win Trims Rating Headroom at Thailand-Based AIS

Thailand's largest mobile telco, Advanced Info Service Public Company Limited (AIS; BBB+/AA+(tha)/Stable), should have sufficient rating headroom to absorb 5G licences and investments.

Taiwanese Telcos' Leverage to Worsen on Spectrum Payments

Taiwanese telcos' financial leverage is likely to worsen as telcos are set to pay large 5G spectrum costs and will likely increase capex to roll-out 5G services in 2020-2021.


Technology Summit 2020

March 5, 2020
Stanford Park Hotel, Menlo Park, USA

Please join us for Fitch Ratings 4th Annual Technology Summit, where our analysts will discuss key themes impacting technology sector credit markets with panelists from PayPal, Euronet, and Financial Technology Partners.

Register here

China Internet Majors' Diversity, Discipline Underpin Profiles

Fitch Ratings says the performance of Chinese internet majors - Alibaba Group Holding Limited (A+/Stable), Baidu, Inc. (A/Stable) and Tencent Holdings Limited (A+/Stable) - may continue to diverge for the rest of 2019 and 2020, reflecting the companies' ability to stay resilient amid an economic slowdown and competition risks, their commitment to financial discipline and their ability to expand and improve the profitability of their new businesses.

What Investors Want to Know

Trade Tensions to Shape APAC Technology Sector Outlook

The effects of prolonged US-China trade tensions and recovery of the semiconductor and component manufacturing industries are top issues for credit investors the Asia-Pacific (APAC) technology, says Fitch Ratings.

Spectrum Payments, Slow Growth Weigh on Thai Telcos

Leverage metrics for Thai telecom operators will weaken in 2020, Fitch Ratings says in a new report. Sector free cash flow is likely to turn negative as slow growth in cash flow from operations is unlikely to cover a surge in capex and spectrum payments. Weak data monetisation and a maturing mobile market will put pressure on revenue growth and earnings recovery.

Indian Telcos' Tariff Hike, Reliefs Won't Offset Unpaid Dues

The decision by all three private Indian telecommunication companies to raise tariffs from December 2019 and a two-year moratorium on payment of spectrum dues are positive for the industry. However, these are unlikely to be sufficient to offset the impact of a recent Supreme Court judgement for incumbents Bharti Airtel (BBB-/Rating Watch Negative) and Vodafone Idea Ltd.

Marketing Costs Offset Korean Telcos' Wireless Growth

South Korea's accelerating 5G conversion has led to a growth in wireless average revenue per user and revenue in 3Q19, but operating profit has been weighed down by higher handset subsidies amid intensifying competition. However, we expect operating profit to gradually improve over the medium term as the high marketing costs in the early stage of 5G adoption will be increasingly offset by benefits of expansion in the 5G subscriber base.


APAC Technology - Trade Rows Biggest Risk to Sector Stability

Prolonged US-China trade tension and slower growth in China are the biggest risks to an otherwise stable sector outlook for Asia-Pacific (APAC) technology companies.

Related report: 2020 Outlook: Technology/Asia-Pacific

View all Outlooks: Credit Outlooks 2020

Secular Trends Spur Xerox-HP Bid but Terms, Investor Demand Key

Xerox's confirmed buyout offer for HP could provide strategic benefits for both companies due to challenging secular trends in commercial printing and personal computers, but any potential transaction would likely require significant debt funding given HP's large size.

Global Telcos' 5G Capex Risk Contained; Leverage Stretched

5G capex risk for most telcos is likely to be contained over the next 18 months. However, the pressure to acquire wider spectrum bands to support future 5G rollout will reduce rating headroom.


Related Press Release:
Global Telcos' 5G Capex Risk Contained; Leverage Stretched

Larger Chip Assembly Firms to be Resilient in Smartphone Slump

The OSAT industry's revenue of USD27 billion in 2018 is likely to recover in the short term, following a severe downturn in 1H19, driven by the launch of new flagship smartphone models and higher wearables and automotive demand.

Rating Headroom Drops for APAC Telcos on High Capex

The leverage headroom of Asia-Pacific telecom operators is narrowing, and is therefore likely to put near-term pressure on some of the ratings. We expect negative free cash flow to persist, as intensifying competition weakens the ability to fund rising capex and spectrum investments from cash generation by operations.

Revenue Diversity Key to Tencent's Resilience as China Slows

Tencent is relatively well positioned to deal with macroeconomic headwinds and competitive threats in China's internet sector due to its solid market leadership in multiple internet segments, large economies of scale and greater revenue diversity.

Philippine Telco Competition Stabilising; FCF to Stay Negative

Fitch expects industry revenue to increase at a mid-to-high single digit for 2019, though incremental cost to support network expansion is likely to moderate EBITDA growth in 2H19.

Competition Eases, But Costs Weigh on Thai Telcos' Earnings

In 2Q19, all major mobile operators in Thailand gradually started to phase out the generous fixed-speed and unlimited prepaid data plans that were launched in 2018. Nevertheless, sector EBITDA could remain flat in 2019, as we expect revenue growth will be offset by an increase in network-related costs. 

Korean Telcos to Accelerate Capex on Fast 5G Uptake

We expect 5G penetration to revive wireless revenue growth in the short term. Both SK Telecom Co., Ltd (A-/Negative) and KT Corporation (A/Stable) achieved a turnaround in wireless revenue growth in 2Q19 after several quarters of decline caused by government-driven tariff cuts in 2017.

Data Drives Stronger 2Q19 for Indonesian Telcos

The quarter also saw a turnaround in Indosat's mobile net additions after several quarters of customer churn due to SIM registration requirements. The telco gained 3.5 million mobile subscribers qoq, while XL's users increased by 1.5 million.

Media Streaming Evolution Drives Netflix Growth Uncertainty

Weaker than expected subscriber growth for Netflix during second-quarter 2019 highlights potential content-driven earnings volatility and price elasticity of demand for US media companies offering subscription video on demand.

European Telecoms' Competitive Intensity Evolving With Regulation

In a new presentation that competitive intensity in each European telecoms market is likely to be impacted as government and national regulators find the right balance between investment incentives and market-driven pricing.


Related Webinar:
European Telecoms: Competition in an Evolving Regulatory Environment

Scope of Huawei Ban to Dictate Global Supplier, Rival Impact

The breadth of the US ban on Huawei Technologies will likely determine the effect on the Chinese telecom firm's suppliers and competitors. Near-term credit effects should be minimal, despite significant exposure for some upstream US technology companies. We believe companies can divert sales to Huawei's Asian and European rivals that will likely benefit from Huawei's struggles.

Astro Awani

Astro Awani interview with Fitch Ratings’ Janice Chong - Axiata-Telenor Talks Highlight Need for Scale in Asia

Janice Chong, Director in Fitch Ratings' Corporates team, discuss with Ibrahim Sani, Business Editor of Astro Awani’s Notepad, key highlights of the proposed merger between Malaysia’s Axiata Group and Norway’s Telenor ASA.

Walt Disney Agreement with Comcast Credit Positive

The agreement The Walt Disney Company entered into with Comcast Corporation effectively strikes a balance between gaining decisive operational and strategic control of Hulu while preserving its cash flow generation and balance sheet capacity for anticipated deleveraging following Disney's acquisition of Twenty-First Century Fox, Inc. 


Latin America Mega Borrowers

Now Available On-Demand


Fitch Ratings is hosting a webcast on the largest Emerging Market borrowers in Latin America. Senior analysts from the Latin America Corporate Ratings Group will provide forecast snapshots on the following mid to low investment-grade issuers with the highest adjusted debt: America Movil, Ecopetrol, Petrobras and Suzano. 


Daniel Kastholm - Managing Director and Regional Group Head, Latin America Corporate Ratings (moderator)
Lucas Aristizabal - Senior Director and Head of Latin America Energy 
Fernanda Rezende - Senior Director, Latin America Corporate Ratings (Fitch Brazil)
Sul Ahmad - Associate Director, Latin America Corporate Ratings 


Listen Now

Tech Slowdown Looms as Inventory, Demand Disparity Rises

A rising disparity between revenue and inventory trends across the US may signal a potential near-term slowdown in technology, given the sector closely follows the broader economy. Softness in end-market demand became apparent for technology companies recently reporting earnings, particularly those in the upstream hardware subsector. 

The Race for Streaming Content

Content spending is set to accelerate in U.S. Media as competition in direct-to-consumer streaming intensifies and companies vie for must have programming.

Rating Criteria & Sector Companions

Master methodology covers financial adjustments and corporate structures.

Companions: Business Services: DAPDiversified MediaTechnologyTelecommunications.


Business enquiries

Jill Zelter

Global Group Head & North America

Business enquiries

Anjali Sharma

Europe, Middle East, Africa

Business enquiries

Kathleen Fuentes Holtzman

Latin America

Business enquiries

Sing Chan Ng


Banker enquiries

Matthew de Mendonca

North America

Banker enquiries

Sean Costello

Europe, Middle East, Africa

Investor enquiries

Aymeric Poizot

Global Group Head & Europe, Middle East, Africa

Investor enquiries

Ian Rasmussen

North America

Investor enquiries

Frank Laurents

Latin America

Investor enquiries

Helen Wong


Analytical enquiries

David Peterson

North America

Analytical enquiries

Alvin Lim

Latin America

Analytical enquiries

Damien Chew

Europe, Middle East, Africa

Analytical enquiries

Steve Durose


Fitch Updates Terms of Use & Privacy Policy

We have updated our Terms of Use and Privacy Policies which cover all of Fitch Group's websites. Learn more.