Fitch Ratings releases a Report
Fitch Ratings has released a report, according to which the 2012 outlook for most Indian telecommunications operators (telcos) is negative, as the nationally-owned and six smallest private telcos will continue to suffer operating losses. Fitch expects that the fifth- and sixth-largest operators may manage to break even in EBITDA terms in 2012.
Although India is one of the most competitive telecom markets in the world, Fitch expects that 2011's stable pricing environment will be sustained through 2012. Bharti Airtel Limited's ("BBB-"/Negative) initiative to raise on-net voice and SMS tariffs by 20% was followed by most of its competitors. Fitch, therefore, expects average revenue per minute to remain steady, at about INR0.41-INR0.44, in 2012.
Fitch expects that the fifth- and sixth-largest operators may manage to break even in EBITDA terms in 2012.
Nitin Soni, Associate Director in Fitch's Asia- Pacific Telecommunications, Media and Technology team, said, "Although the high level of competition is leading to very weak financial performance for most Indian telcos, Fitch believes that the credit outlook for the top-four telcos is stable," The credit metrics of the four largest telcos should improve in 2012, benefiting from a more stable pricing environment and positive free cash flow (FCF) generation. However, all operators remain exposed to significant regulatory risks."
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www.varindia.com
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