"Although there is no immediate impact on SLT's credit profile and the company's short-term liquidity is adequate, operating and funding risks could increase in the near to medium term given the country's weakening economic and political conditions."
SLT has a 'BB-' long term rating, a notch higher than the country rating of 'B-'
S&P cut Sri Lanka's sovereign rating Friday following concerns over high budget deficits and increasing short term foreign borrowings.
The rating agency said SLT was facing intensifying competition, a weak regulatory environment, and high capital expenditure needs.
But such weaknesses were offset by the firm's "leading market position in the fixed-line business, growth potential in the wireless segment, and strong cash flow measures.
"The negative outlook on SLT reflects country risk factors and the business environment