Moody’s Investors Service changed its outlook for the Latin American telecommunications sector from positive to stable on higher Ebitda driven by efficiencies, mergers and acquisitions and consolidations, as well as strong and stable investments.
“Absolute Ebitda and Ebitda margins for telecom companies will increase during this period as they continue to capitalize on the efficiencies they made in 2020 during the lockdown,” the vice said. -Moody’s Deputy President Rosa Morales in a statement.
America Móvil grew 4.3% year-on-year EBITDA increase in 1Q22. Millicom also reported strong results.
“Similarly, as we enter 2023, some companies will also reap the benefits of mergers and acquisitions executed even before the pandemic with an added boost due to the expected recovery, particularly in tourism-related economies,” he said. added Morales.
Particularly high activity was recorded for fibres, telecoms and data center mergers and acquisitions.
Growing data consumption should partially compensate effects of inflation and competition on revenues this year. Moody’s expects revenue to resume growth in 2023 as consumers move to faster, data-driven networks and infrastructure, and are ready to absorb higher demand.
Operators are building 5G networks in Chile, the Dominican Republic and Brazil.
Foreign investors in the region will focus on cloud computing, internet of things and 5G/fiber.
Moody’s said capital spending will be more stable than in previous years, at 19.5% of revenue, or about US$14.7 billion a year, above the 17.3% average for 2017-20.
Fitch, however, expects Latin American telecom operators to invest around 17% of their revenues this year, compared to 19-20% in 2021, “primarily due to the conclusion or normalization of investment “.
Infinera Technical Director Andres Madero recently told BNamericas that the region is moving “like never before” and the level of activity hasn’t been seen “for at least six years.”