Moody's: Competition pressures Korea telecoms

Moody's Investors Service said it believes that competition among Korean telecommunications companies is not likely to abate any time soon, and this trend has obvious credit negative ramifications for all operators, as they speed up capital expenditure spending to meet the huge demand for high-speed data services.

Operators seem to be stuck in an ever-rising spiral of capital expenditure and marketing costs to attract and retain customers, Moody's said, and this has obvious negative implications for profitability and cash flow.

At the same time, regulatory moves to cap marketing spend at no more than 20% of revenue from 2011 should provide some respite, the agency said.

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