Tough Chats

Feb 29, 2008 (LBO) – Higher inflation which reduced the spending power of subscribers and declining security was hurting Sri Lanka’s telecom firms, Fitch Ratings said in an Asia Pacific regional report. .

Though the Sri Lankan telecom sector was expected to show “reasonable growth” in 2008, fixed wireless expansion was expected slow with increasing penetration, Fitch Ratings said in a report released Friday.

“Of increasing concern are the weakened macroeconomic environment and the declining security situation of the country, which are unlikely to improve over the short term,” Fitch said

“There is significant pressure on disposable income in light of sustained high inflation, which accordingly could contract the potential customer base for telecom operators.”

The Fitch Ratings report the outlook for Asia-Pacific telcos was stable in 2008, except for Sri Lanka and Thailand, where political and macroeconomic risks had increased.

Out of 28 rated telcos in the region 24 had stable outlooks. Korea’s Hanarotelecom was upgraded.

But in Thailand Advanced Info Service Public Company (rated BBB+) and Total Access Communications were put on rating watch negative, as Fitch awaited elect