2020 was a good year for Asian telco providers, mostly

2020 was a good year for Asian telco providers, mostly

COVID-19 has hit hard, but 5G growth is driving a path forward.

Credit: Dreamstime

A clear majority of the top 20 telecommunications operators across the Asia Pacific region enjoyed revenue growth last year, despite the headwinds caused by the ongoing pandemic.  

Increases in average revenue per user (ARPU), growth in the number of mobile subscribers and higher data service usage enabled the top 20 telco providers in the region to report average growth in revenue of over 2.5 per cent in 2020, according to industry analyst firm GlobalData.

These factors helped to see no less than 65 per cent of the top 20 telco operators in APAC post revenue growth last year.  

This growth trajectory comes as many telcos across the region struggle to maintain revenue and profit levels, with roaming revenue drying up as a result COVID-19, among other pandemic-related impacts.  

Indeed, Singaporean telco giant Singtel saw its operating revenue decline by eight per cent in the second half of the year ending 31 March 2021, mainly due to reduced roaming, prepaid mobile and voice revenues. 

“This year’s results are disappointing given unprecedented headwinds from COVID-19 and ongoing structural challenges," said Yuen Kuan Moon, Singtel group CEO, at the time.

But bright spots remain. 

“Due to the COVID-19 pandemic related lockdowns and quarantine measures set by governments, the telecom operators across the region saw a steep spike in data traffic and increased use of broadband services as people increasingly relied on connected devices throughout 2020,” said Keshav Kumar Jha, business fundamentals analyst at GlobalData.

Credit: GlobalData

GlobalData’s findings also show that an increase in 5G subscriptions is helping to garner higher data service revenue for telcos across the region.

This was reflected in Singtel's latest annual financials, with the telco revealing earlier this year that its equipment sales in Singapore increased in the financial year ending March due to customers upgrading to 5G devices and the timing of certain premium handset launches.   

For example, increases in service revenue due to higher consumer and enterprise infrastructure sales, backed by the addition of wireless and 5G subscribers, helped South Korea’s LG Uplus to record over five per cent growth in 2020.

“Against the backdrop of the COVID-19 pandemic, developing 5G network infrastructure has become critical for enterprises for scalability and flexibility in line with growing network demands of consumers,” Jha said.  

“As a result, the rapid rollout of 5G by operators along with increasing penetration of IoT [internet of things] and M2M [machine-to-machine] is expected to help them generate higher revenue in the future,” he added.

GlobalData’s research suggests that not only did 65 per cent of the top 20 telecom operators in APAC report year-on-year growth in revenue last year, at least five of the top companies reported growth of more than five per cent in 2020.  

Moreover, India’s Bharti Airtel (Airtel), PLDT in the Philippines and Japan’s SoftBank topped the growth list with each company registering double-digit year-on-year growth in revenue, according to the analyst firm. 

“Increase in retail consumer revenue, mainly broadband service revenue, helped SoftBank record revenue growth in 2020. Besides, SoftBank reported growth due to increase in royalty and license revenue from the Arm segment,” Jha said.

While Airtel has reported the highest revenue of any APAC telco operator in the current financial year, higher revenue from data services in wireless and fixed line business segments also allowed PLDT to register decent year-on-year growth in revenue.

Regardless of the gains, Singtel wasn’t the only telco in the region to see declines last year.

According to GlobalData, however, Hong Kong’s CK Hutchison and India’s Vodafone Idea were the only companies in its 2020 list to report over 10 per cent decline in revenue.

Although telco providers in the broader APAC region have had to navigate the pandemic, those in Myanmar have had the additional challenge of dealing with disruptions caused by ongoing political turmoil in that country.

In July, just days after moving to quell rumours it was planning to sell off its Myanmar mobile telco business, Norway’s Telenor revealed it had sold its Telenor Myanmar subsidiary to M1 Group for US$105 million.

The move came after months of hardship for Telenor Myanmar and, indeed, all other telco operators in Myanmar, after the country’s military declared a state of emergency in February, subsequently shutting down mobile internet across the country.

Tags TelcosingtelAsiaPLDT


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