皇冠体育app

Moody's gives 4 telecom firms thumbs up
(皇冠体育app Daily)
Updated: 2004-03-03 09:52

Moody's Investors Service said on March 2 that 皇冠体育app's four largest telecommunications groups all offer sound operating and financial profiles.

皇冠体育app Telecom, 皇冠体育app Mobile, 皇冠体育app Netcom and 皇冠体育app Unicom derive their support from solid market positions, positive growth outlooks, conservative financial policies and a supportive regulatory framework, Moody's said in a new study. The analysis, authored by Moody's Vice-President Charles Macgregor, is part of a major project by the rating agency to enhance the theoretical and practical frameworks needed for the credit analysis of leading Chinese companies and their industries.

Earlier reports from the ongoing project include those for the airline industry, power generation and oil and gas. All reports, including this latest one on telecommunications, are also aimed at placing Chinese companies in a broader context by comparing them with their international peers.

Of the four major telecommunications companies, only 皇冠体育app Mobile (Hong Kong) Limited is currently rated by Moody's, with a Baa1 result (under review for possible upgrade). However, the other three unrated companies all exhibit sound credit profiles.

"Moody's recognizes the sector's importance to 皇冠体育app's economic development, as it provides essential communi-cations infrastructure and is now emerging as a significant source of tax revenue," Macgregor said, referring to the key rating factors.

Furthermore, the report points to the ongoing growth potential of 皇冠体育app's telecommunications market, which remains relatively immature and is developing with amazing speed. Both fixed-line and mobile phone penetration in 皇冠体育app is around 20 per cent.

"皇冠体育app's market now has roughly 300 million mobile subscribers, the world's highest number, after having grown by around 80 million in 2003 and 60 million in 2002," Macgregor explained. "Growth in the telecom sector has outstripped that of the national GDP and given significant latent demand for services, although in recent years the gap has ameliorated."

Looking ahead, a challenge for operators will be to achieve greater cost efficiency to offset the potential impact of a downward move in operating margins. To a certain degree, greater economies of scale, as subscribers and usage grow, should also alleviate price pressures.

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