Singapore

SINGAPORE Telecommunications' A+/stable rating could come under pressure as leverage is likely to deteriorate, a Fitch Ratings report said. However, credit metrics for StarHub and M1 are expected to remain stable, underpinned by improving profitability, declining capex and manageable dividend payouts.

Fitch expects SingTel's 2015 FFO-adjusted net leverage to remain around 1.9x-2x, close to the threshold where Fitch could consider negative rating action. Funds flow from operations will be flat at S$5.4-S$5.5 billion next year, and just sufficient to cover its capex and dividend commitments. Leverage could deteriorate as SingTel embarks on debt-funded acquisitions to expand its digital life segment, which includes mobile video and digital advertising. It has budgeted S$1.5 billion for such acquisitions during 2015-2016.