Cash-rich telcos in Asia's mature markets are turning to neighbouring countries and industries to fuel expansion, according to analysts.

"Investment funds flow from saturated markets with limited growth prospects such as Australia, Hong Kong and Singapore, towards emerging markets with high growth prospects," said David Kennedy, research director at telecoms consultancy Ovum.

"Growing competition for investment opportunities is forcing operators to look at new markets such as Vietnam, Central Asia and the Middle East."

Many of the telcos are looking at investment in smaller foreign mobile phone network operators, a sector which often has high growth potential.

Mobile networks are relatively cheap to expand, and can be profitable even with average user revenue below $5. In addition, falling handset prices mean that even relatively poor people can now buy a mobile.

However, some telcos are also considering investment in related industries such as e-commerce. Australia's Telstra, for example, took a stake in Chinese e-commerce website Soufun last year.

New opportunities are opening up as some countries gradually ease tight restrictions on foreign investment, but Kennedy warned that foreign investment rules are still uncertain and will "require further clarification".

Conversely, some larger operators are stifled by regulations which limit their avenues for expansion at home. Former telecoms monopoly holders are particularly affected by limitations of this kind.