Moody's maintains a stable outlook for EMEA telcos for 2018

Data demands will continue to significantly contribute to revenue growth
Increasing smartphone penetration levels from a low base has been the main reason for increasing data usage.
Increasing smartphone penetration levels from a low base has been the main reason for increasing data usage.


Consumer spending trends, demand for connectivity and better macroeconomic conditions support a stable outlook for EMEA telcos, according to Moody's research. The industry is expected to sustain revenue growth of just above 1%, slightly lower than the 1%-2% expected by Moody's last year. 

As the boundaries between cable and telecom companies continue to fade, the importance of offering converged services through bundles will increase, while product differentiation will become more relevant. However, Moody's rules out  any large cross-border deals amongst incumbents or acquisition of content producers by telecom service providers. 

Asset sales will continue to be on the agenda. It might be noted here that recently, Zain entered into definite agreements to sell and leaseback the passive physical infrastructure of its mobile tower portfolio in Kuwait for $165 million to IHS. Spectrum auctions will lead to further use of financial flexibility.

Revenue growth in commodity-driven markets will improve, albeit gradually, following improvement in economies such as Saudi Arabia, Kuwait, Oman, the United Arab Emirates, Nigeria, South Africa and Zambia. EBITDA margins will remain stable but will be susceptible to volatility of local currencies relative to the dollar. Growing demand for data is expected to contribute to revenue growth for the telcos across all these markets. 

Many of the telcos in the region will also be required to make investments to expand their fibre infrastructure. Regulators have a significant role to play since delay in the allocation of new spectrum hurts the rollout of data strategies for MNOs. 


Editor's Choice

Deception technologies, AI and Robo Hunters to  displace legacy cybersecurity solutions
IoT is rapidly expanding the attack surface of the digital enterprise and exposing it to enhanced risk levels not seen before. Deception technologies, artificial intelligence, Robo-hunters, are solutions for tomorrow's enterprise, Mechelle Buys Du Plessis, MD – UAE, Dimension Data.
The robots are coming: Impact of AI on executive search
As the technology industry’s elite struggle to agree on the potential impact of AI and a raft of people queuing up to advise on the potential disruption it will cause, this article by John Curtis-Oliver, Partner at Boyden studies the potential impact on the executive hiring and the executive search industry.
#MWC2018: Spotlight shines on 5G, IoT and AR
Hard to predict what will ‘turn around the fate’ of telecom operators, but there is potential for those who can play the role of enabling platform for new digital services and players, as well as for new features and capabilities across traditional industries, says Luis Cirne, partner, communications, media and technology (CMT) practice at Oliver Wyman

Most popular

Don't Miss a Story

You may also like

Mobile penetration reaches 70% in least developed countries of the world
Digital skills gap identified as a key barrier to ICT and internet use in LDCs
New model proposes device to device networks for improved mobile services
D2D technology works similarly to personal hotspots shared between individuals
Bahrain leads the Arab world in ICT development index
However, substantial digital divides continue to exist between regions and countries
A billion 5G subscriptions by 2023: Ericsson Mobility Report
UAE telcos commit to have 5G infrastructure by 2020