Intensifying competition and rising capital investment requirements will increase pressure on service provider revenue, which Fitch Ratings expects to grow by just zero to five percent in most Asian telco markets in 2017. The revenue pressure also will pressure profits.

Data usage will continue to rise strongly, but most telcos are pricing data in such a way that increased usage is not translating into similar revenue growth, Fitch says. In fact, data tariffs generally are falling, as is voice revenue.

The trend of falling data tariffs and the substitution of data for voice and text will continue in most markets. The big exception is China, where higher data usage will increase data plan purchase size, which will, in turn, increase  average revenue per mobile user.

But fixed-line and international long-distance services are in a structural decline.

EBITDA margins are likely to shrink the most in the Philippines and India, where telcos still derive the majority of their revenue from voice and text services.

Chinese and Korean telcos’ profitability will remain stable, reflecting weaker competition and lower marketing and handset subsidy costs. Chinese telcos will benefit further from lower tower lease rental costs, Fitch Ratings predicts.

Competition is likely to intensify in India, Singapore and Malaysia, with new entrants poised to offer cheaper tariffs to poach customers, Fitch said. At the same time, mobile operators in Thailand, the Philippines and India are increasing capital investment in 4G networks.

“We expect the blended tariff to decline by five to six percent for Indian telcos. In Malaysia, the fixed-line market leader, Telekom Malaysia, is making a move into the wireless market, which will prevent a recovery in the revenue of wireless incumbents next year,” Fitch says.

The bottom line: Fitch has a negative outlook on the telecoms sectors in India, Singapore, Malaysia, Thailand and the Philippines. South Korea, Indonesia, China and Sri Lanka all have a stable outlook.