Nov 19, 2007 (LBO) – Fitch Ratings has confirmed Sri Lanka Telecom’s BB- rating with a negative outlook and its AAA (lka) national rating with a stable outlook, the agency said Monday. “SLT’s ratings reflect the company’s strong positive free cash flow generation, its strong and improving financial profile and entrenched market position,” the rating agency said.
“SLT has a monopoly in wire-line services, which still accounts for nearly half of its revenues, and a dominant share of international long-distance and IP and data-related services.
“In addition, Fitch notes that SLT has improved its market position in the fixed-wireless and mobile segments.”
Despite a growing wireless fixed segment, a stagnant wire-line subscriber base and a court order to cut tariffs (by 8 to 9 percent) the wireline business is expected to bring most of the telco’s revenue and cash over the medium term.
Though entering the market late, SLT has increased its fixed-wireless market share to 25 percent from 10 percent in 2005.
Its mobile market share has increased to 18 percent from 13 percent over two years.
The mobile division’s (Mobitel) contribution to revenue has increased t