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.