Asia needs $140b for telecoms sector
Asia needs $140b for telecoms sector
BANGKOK (AFP): Asian nations will soon be able to tap a wide range of financial sources for telecommunications projects, which will require US$140 billion in six countries alone through to 2000, an expert said yesterday.
Scott Hawker, vice president of investment banking for Salomon Brothers, told a telecoms seminar that China, India, Indonesia, Malaysia, the Philippines and Thailand must now look at alternative sources because of sky-high costs.
"Traditional emphasis will shift away from vendor financing toward strategic equity and capital markets financing," a statement from the leading investment bank quoted him as saying at the regional seminar.
The traditional sources of project financing have been multilateral agencies, export credit agencies, international banking syndicates or private institutions, Hawker noted.
But capital markets began to finance projects, particularly in the power sector, in late 1991, generating more than $5.3 billion since then.
Power "remains the most visible, and probably the most financeable, sector" but rapid development in telecoms would attract money from capital markets as well, he said.
"One of the key reasons that project financings are now feasible in the capital markets is the significant broadening of investor interest and comfort levels in investing in emerging markets," Hawker said.
Fast-growing economies in the Asia-Pacific region are now being choked by infrastructure bottlenecks.
The Manila-based Asian Development Bank has estimated that $1 trillion will be needed over the next 10 years to meet demand for more telephones, electricity, roads, ports and other facilities in the region.
Hawker said the advantage of using capital markets is that they offer a very large and liquid market, a broad range of potential buyers, longer maturities, and the option to inject capital quickly and at the appropriate time.
The down side, however, is the need for registration with securities watchdogs, full disclosure and ratings by at least two agencies to obtain the best terms, he said.