Fitch: Data Services and Consolidation Synergies Bolster Stability for U.S. Telecom and Cable Sector

CHICAGO--(BUSINESS WIRE)--The U.S. telecom and cable sector will remain largely stable in 2012 according to Fitch Ratings, with wireless and wireline data services posting revenue growth of 3%-4% for the sector. Fitch also expects a modest EBITDA margin improvement of approximately 20-25 basis points (bps) for the sector in 2012.

However, Fitch expects total capital expenditures to grow approximately 3% in 2012 to approximately $67 billion. This reflects ongoing wireless network spending on 4G LTE technology, the accelerated buildout of fiber-to-cell sites to handle exploding wireless data growth, the expansion of wireline broadband availability, and continued investment in business/commercial services.

Fitch expects capital intensity to be stable in 2012 at approximately 13.5%-14.0% of revenues.

While the sector remains resilient to changes in the economy, and is well-insulated from a potential slowdown in China and events in Europe, weak employment trends and housing starts could pressure revenues.

In addition, a weak economy combined with shareholder initiatives such as high dividend payouts could lead to Outlook changes for issuers in the sector.

Fitch believes that industry consolidation will continue, but be directed at addressing wireless spectrum needs or expanding data services offerings rather than toward acquisitions in traditional lines of business.

The status of AT&T Inc.'s proposed acquisition of T-Mobile USA will also be a significant industry issue as the substantial divestitures needed - if it is to be completed at all - would have potential follow-on effects on the credit profiles of other issuers.

The full '2012 Outlook: Telecom and Cable' is available at 'www.fitchratings.com.'

Fitch will host a teleconference today, Dec. 8 at 10 a.m. ET to discuss its 2012 outlook for the U.S. telecom, media and entertainment, cable and technology industries. Fitch has published the outlook reports for these sectors earlier which can also be accessed at the Fitch web site.

Call-In Details:

-- Date & Time: Thursday, Dec. 8 at 10 a.m. ET

-- Dial-In: [phone] Domestic/[phone] International

-- Conference ID: #34156950

-- Call Leader: Jamie Rizzo, CFA

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: 2012 Outlook: Telecom and Cable

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=657212

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