Data and Non-Traditional Revenue to Drive Australian Telcos <Origin Href="QuoteRef">TLS.AX</Origin>

(The following statement was released by the rating agency)Link to Fitch Ratings' Report: 2016 Outlook: Australian Telecommunications Serviceshttps://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874037SYDNEY, November 29 (Fitch) Fitch Ratings expects strong data growth and non-traditional revenue sources such as network applications and services to drive revenue growth for Australian telecoms operators in 2016, according to the agency's report published today. Data consumption across both fixed-line and wireless will continue to grow, reflecting increasing data penetration and the growing importance of video in driving the migration of customers to higher-consumption plans. Fitch also expects double-digit growth in non-traditional revenue streams, including their rising contribution to revenue. Australian telcos continue to face adverse trends in average revenue per user (ARPU) and fixed-voice revenue. Fitch expects 2016 revenue and EBITDA growth to remain in the low single digits. This reflects declining fixed-voice revenues from fixed-to-mobile substitution, although strong data consumption growth across fixed-line and mobile will mitigate declining fixed-voice revenues. Increased take-up of bundled services will boost margins in the fixed-internet segment. Intensifying competition in the mobile segment will result in lower ARPU, although this will be somewhat mitigated by data-centric pricing to capture the higher data usage. Fitch's outlook on Australia's leading telcos is stable. We do not expect downward pressure on rating guidelines, although financial profiles may weaken from high-debt-funded capex. Ratings upgrades are not envisaged in the medium term. The challenges across the sector from changing technology and regulation, competition and ongoing capex needs, will prevent any major sustained improvement in business or financial risk. The report "2016 Outlook: Australian Telecommunications Services" is available on www.fitchratings.com or by clicking on the link above.Contact: Sajal KishoreDirector +61 2 8256 0321Fitch Australia Pty Ltd., Level 15, 77 King Street, Sydney, NSW 2000Steve DuroseManaging Director+61 2 8256 0307Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Leni Vu, Sydney, Tel: +61 2 8256 0304, Email: leni.vu@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com.Additional information is available on www.fitchratings.comALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.