Investors looking to buy Asian telecommunications stocks should not be put off by proposals from the United States Federal Communications Commission (FCC) to cut international settlement rates, Salomon Brothers analyst Dan Sherman says.
Mr Sherman said yesterday the likelihood of the benchmark rates being imposed in the way FCC proposed was highly unlikely.
Settlement rates are the fees international carriers pay each other to complete one another's calls.
The result of the recent popularity of call-backs during the past few years is that the US has become a massive payer of fees to other countries.
In a bid to reduce these payments, the FCC recently announced cuts in settlement rates, phased in over differing times according to the country. Potentially the bottom line revenues of all carriers with an imbalance of traffic with the US could be damaged.
'We expect the Asian carriers to meet the benchmarks but over extended transition periods,' Mr Sherman said.