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As the world recovers from the pandemic in 2023, the outlook for the telecommunications and technology sectors in the coming year appears to be bright according to noted market research firms.

A study by Fitch Ratings suggests that APAC telcos’ median 2023 leverage will remain stable, amid less competition and ongoing industry consolidation.

Fitch Solutions, meanwhile, has predicted that in 2023, operators holding 5G licenses will beef up efforts to establish custom next-generation wireless networks for their enterprise customers, maximizing several unique properties of 5G, including the ability to carve available spectrum into secure “slices”.

In Southeast Asia, the International Data Corporation (IDC) predicted in 2022 that there would be a digital boom in the region in 2023.

According to its forecast, “one in three companies will generate more than 15% of their revenue from digital products and services, compared to one in six in 2020.”

The study reveals several key areas set to drive the digital economy of Southeast Asian countries, which include data-driven organizations, accelerated digital services, autonomous operations, omni-experience and supply chain modernization.

IDC added that cloud technology will serve as a key to the stability and strength of businesses in the region because of the priority being given to boosting their digital economy.

In a statement, Prapussorn Pechkaew, research manager at IDC Thailand, said, “More enterprises will be looking into not just how to design their cloud strategic roadmap but also how to execute their cloud usage effectively as cloud is maturing in the region across industries. Cloud cost visibility and measurement to control overspending issues are currently among the top concerns globally. Building capabilities around these areas will benefit the advancement of cloud services in more matured activities and environments.”

In its year-end report, consulting firm PwC Philippines indicated that the country will have higher investor confidence, particularly in the telecommunications sector. It noted, “With the expanding 5G connectivity, major companies will continue commercializing their assets to fund network expansion plans.”

How the Tech and Telecom Sector Will Develop in Southeast Asia in 2023

Singapore’s successful 5G rollout continues to benefit both the public and private sectors. At least half of the city-state is expected to be covered by 5G networks by the middle of 2023.

In its report, “Opportunities and risks in the era of 5G,” consulting firm KPMG said that while many industries are reaping their benefits from 5G, the true value of 5G integration has yet to be maximized.

According to Singtel, eight industries will gain the most from 5G in 2023, including the telecommunications sector. It said that telcos can expect to see more partnerships with stand-alone 5G and enhanced capabilities and solutions.

Singtel said it is focused on carrying out its strategic reset, including expanding its 5G market share and the footprint of its new digital businesses. Its priority is also to expand its ICT division, as it aims to stay ahead of competing technology services companies in Asia Pacific.

Market research firm Statista has predicted Thailand’s market value for digital services will reach around 693.8 billion Thai baht by 2024, followed by hardware and smart devices. The market has grown since the recent COVID-19 lockdowns have driven consumption more toward digital services in recent years.

As the global environment continues showing signs of recovery from the pandemic, Thailand’s economy is also seen to resume to near-normal and increase confidence in the business sector.

According to a 2021 study by the Thai banking group Krungsri, the years 2021–2023 will see strong growth in the mobile communications market. It predicted a greater adoption of mobile data services, with more people using the internet and subscribing to online content, as well as relying on online financial transactions and online shopping.

And as this market has shown strong growth over the past few years, competition among Thai telecom operators is also heating up.

According to GlobalData, the total mobile service revenue in the country is likely to increase at a compound annual growth rate of 4.9% from $8.5 billion in 2022 to $10.8 billion in 2027, thanks to a higher volume of 5G subscriptions and a rising average data-revenue per user.

GlobalData said that AIS will be on top of Thailand’s mobile services market by subscription share in 2022 and will continue to lead until at least 2027. But its competitors won’t allow it to dominate that easily. In 2023, Thai telecom firms DTAC and True Corporation are expected to finalize their much-anticipated merger.

To remain ahead of the game, AIS is investing in 5G network development.

In the Philippines, telecom operators are expected to level up their game in the 5G race.

Amid the telcos’ continued push to improve its 5G coverage, the country is predicted to need 4,000 new towers every coming year, according to independent operator EdgePoint Infrastructure.”

Globe Telecom announced at the beginning of January that its 5G footprint is now over 50% in its bid to provide more people with more access to reliable mobile and broadband speeds in key areas nationwide. It added that this development helps them drive the adoption of 5G technology in the country and pave the way for the next generation of digital innovation.

PwC, in its year-end report, “The year that was: Major deals in 2022,” predicts that there will be five major mergers and acquisitions in the tech and telecom sectors in 2023. Among these will be the two industry giants, Smart Communications and Globe.

To achieve its target of having 1,500 new towers in the coming year, Smart went ahead with the sale and leaseback of its 6,500 towers. The asset deals involve transactions with local firm Aboitiz InfraCapital, Axiata Group Berhad and edotco Group, as well as with DigitalBridge Group and EdgePoint Infrastructure.

Meanwhile, Globe will sell and lease back its 7,059 towers to PhilTower Consortium, Frontier Tower Associates Philippines, Pinnacle Towers, and Miescor Infrastructure Development.

The profits from these separate transactions will be allocated to the network expansion projects of the telcos.

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