Spectrum cost, dividends drying up cash flows for SE Asian telcos: Moody’s

High capital spending, including on spectrum, and expenditure on dividends had resulted in neutral or negative free cash flow for telecom companies in Southeast Asia, ratings agency Moody’s said in a report on Wednesday.

The agency expects these trends to continue through at least 2021, and does not see telecom companies generating enough cash to pay down debt and reduce elevated leverage.

Moody’s also said that the regulatory framework in countries where mobile companies paid higher dividends — Singapore, Malaysia and Indonesia — were generally stable and predictable. But regulations in the countries where the companies paid a higher price at spectrum auctions — India, Thailand, Bangladesh and Pakistan — were less predictable and often politicised.