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30 November 2023

Fitch telecom outlook stable for Mideast, Africa

By Staff Writer

The Middle East and Africa telecommunications market will continue to grow in 2010, albeit at a slower pace, according to a Fitch Ratings report.

"High mobile penetration rates will limit growth prospects in the regional telecom market in 2010. Robust top-line growth will only be possible in selective markets in the mobile segment," said Bulent Akgul, Director at Fitch's European TMT Group.

In Fitch's view, the telecom landscape is becoming more competitive in the Middle East and Africa. Fitch expects slower growth for the Middle East telecom sector against a backdrop of maturing markets and elevated competition in countries such as Kuwait and Qatar.

Regional operators are expected to continue looking for new growth acquisition targets in Southeast Asia and Africa. For the African market, the agency is still expecting robust growth in the mobile segment due to low penetration of these markets and under-investment in the fixed-line sector.

The region's regulatory environment remains favourable despite growing competition in some markets. The regulatory picture has traditionally moved forward very slowly as regulators like to ensure a smooth transition process, the report said.

There have been some positive signs in the growth of data traffic both in the mobile and fixed segments in the Middle East since 2008. Fitch expects to see this data trend continuing with mobile and fixed-line data growth rates of 25 per cent to 30 per cent per annum until end 2012.

Leverage metrics for leading operators are expected to edge higher during 2010-2011 due to new acquisitions and investments despite forecast y-o-y Ebitda growth.


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