Fitch rates risks of Asia Pacific telecoms

Fitch Ratings said it assessed the telecom regulatory risk environment across the seven markets that it covers in South and South East Asia as part of an Asia-Pacific wide study. The study revealed that these markets were divergent in terms of regulatory risk, with Malaysia at the low end of the spectrum and Sri Lanka scoring the highest.

The total regulatory risk score is based on three major categories: political and social policy risk, industrial policy risk and inability of ownership/management to offset regulatory risk, Fitch said.

In the case of Malaysia and Singapore, well-developed and mature regimes remain broadly supportive of the entrenched players, underpinning low-to-medium-risk scores in Malaysia and medium-risk scores in Singapore, Fitch said.

The two largest operators in the Philippines also exhibit medium-risk scores, as the inactive regime has facilitated little change to the industry structure, the agency said.

Meanwhile, political and social policy risks in Sri Lanka are amongst the highest in the region and therefore a major adverse rating factor for the country's operators. Sri Lanka's high regulatory risk score reflects insufficient transparency in the regulatory process combined with the regulator's strong connection with the political framework, the agency said.

The risk scores for second-entrants in India, Indonesia and Thailand also are high, weighed down by high political and social policy risks and the lack of state ownership in these operators.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.