Telecom firms to face higher spectrum liabilities in Asia

Global rating agency Moody’s Investors Service on Monday said that telecom firms in Asia’s emerging markets will face higher spectrum liabilities over the next couple of years and their leverage may weaken, but these essential costs will have limited immediate impact on their cash flows and liquidity.

It pointed out in a new report that the ratings of Asia-Pacific (APAC) telecom companies in emerging markets can tolerate the increased deferred spectrum liabilities at current levels, if these essential costs are the main driver of high debt or weaker leverage.

It projected that for emerging markets — China, India, Indonesia, Malaysia and Philippines — spectrum liabilities to gross debt will increase to more than 16 per cent in 2021 and 2022,