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Sunday, October 19, 2014

Fitch keeps credit scores, outlooks for PLDT, Globe

Fitch Ratings has affirmed the credit ratings of the country's two largest telecommunication companies amid benign competition and regulatory risks.

In a statement, the London-based debt watcher said it affirmed Philippine Long Distance Telephone Co's (PLDT) long-term foreign currency issuer default rating (IDR) and senior unsecured rating at 'BBB'.

The long-term local-currency IDR and national long-term rating were affirmed at 'A-' and 'AAA(phl)', respectively.

The outlook is stable on all the issuer ratings.

"PLDT's ratings benefit from its position as the largest telecom operator in the Philippines with 57 percent revenue market share in mobile and broadband, and a 70 percent subscriber market share in fixed-line," Fitch said.

Fitch expects PLDT's leverage to rise due to continued capital expenditures, and its $445 million investment in Rocket Internet AG, which is unlikely to contribute to the Philippine telco's earnings over the next three years.

Fitch also kept Globe Telecom Inc's long-term foreign- and local-currency IDRs at 'BBB-'.

The senior unsecured and national long-term ratings were also affirmed at 'BBB-' and 'AAA(phl)' respectively. The outlook is stable on all the issuer ratings.

Fitch said Globe's revenue is likely to rise by the mid-single digits in 2015, greater than PLDT's growth given the Ayala-led telco's higher proportion of smartphone users. Globe "is investing much more aggressively than PLDT even though its revenue is only 60 percent of the latter's, with capex of P29 billion in 2013 compared with PLDT's P28.7 billion," Fitch said.

- Interaksyon

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