Fitch affirms PLDT’s ratings
abs-cbnNEWS.com | 10/08/2008 3:09 PM
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Fitch Ratings has affirmed Philippine Long Distance Telephone Company's (PLDT) long-term foreign and local currency issuer default ratings at 'BB+' and 'BBB', respectively, on sustained strong performance of its businesses.
Fitch also affirmed PLDT's national long-term rating at 'AAA' as well as its global bonds and senior notes at 'BB+'.
The outlook on the ratings is stable.
Fitch said the ratings recognize the company's leading position in the telecom sector, with its diversified operations in fixed-line, cellular, wire and wireless broadband services, as well as growing presence in the call center and business process outsourcing (BPO) segments.
The outlook, on the other hand, reflects expectations that PLDT will sustain its dominant market share and strong financial profile despite increasing shareholder distributions.
Fitch said future growth in PLDT's cellular market should remain modest since the addressable market is approaching maturity and competition is increasing.
PLDT, through subsidiaries Smart Communications and Pilipino Telephone Corp., currently enjoys a 60 percent share of mobile subscribers and over 70 percent of the broadband market.
The ratings agency noted that PLDT is well-positioned to capitalize on growth opportunities in consumer broadband and BPO, which could help offset slowing growth in its core business.
For 2008, PLDT is estimated to spend P28.5 billion for expansion. Fitch said PLDT's capital intensity is seen to remain moderate in the next two or three years, with incremental spending to improve its wireless broadband services and next-generation network.
