1. Fitch affirms Bharti Airtel at ‘BBB’, outlook as stable

Fitch affirms Bharti Airtel at ‘BBB’, outlook as stable

Fitch Ratings has affirmed Bharti Airtel's long-term foreign currency Issuer Default Rating (IDR) as stable, a statement said here on Friday.

By: | Singapore | Published: May 26, 2017 7:59 PM
Fitch Ratings has affirmed Bharti Airtel’s long-term foreign currency Issuer Default Rating (IDR) as stable, a statement said here on Friday. (Reuters)

Fitch Ratings has affirmed Bharti Airtel’s long-term foreign currency Issuer Default Rating (IDR) as stable, a statement said here on Friday.”Fitch Ratings has affirmed India-based Bharti Airtel’s Long Term Foreign Currency Issuer Default Rating and senior unsecured rating at ‘BBB-‘. The outlook on the IDR is stable. The agency has also affirmed the ratings on Bharti Airtel International (Netherlands) bonds,” the statement said.

Bharti’s ‘BBB-‘ rating reflects its established market leadership in the Indian wireless services industry. The company has about 35 per cent revenue market share, has diversified and integrated operations and owns a large share of Indian spectrum assets, which are also the most efficient assets, the ratings agency said.”We believe that its established market position and diversified revenue base will help it withstand intense competition in the Indian mobile segment,” the statement added.

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Regarding Bharti Airtel’s spectrum holding, the statement said: “We believe Bharti has sufficient spectrum assets to expand its data services in the medium term and will not need to acquire more spectrum. It is unlikely to bid for 700MHz spectrum as the efficiency gains from the 700MHz spectrum do not currently justify the high reserve price set by the regulator.”

However, the ratings agency has a negative outlook on the Indian telecom market.”We have a negative outlook on the Indian telco market as we expect the credit profiles of the top four telcos to come under pressure from tougher competition and greater capex requirements. We believe that Jio may continue to disrupt the market by offering cheaper tariffs than the incumbents to gain market share.”

It said the ongoing industry consolidation will leave only five telcos in the market, and will bring back pricing power to incumbents only after one to two years. However, in the medium term, Jio could raise tariffs to start generating return on its massive investment of $27 billion-30 billion, it added.

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