Karachi, VIS Credit Rating Company Limited (VIS) has reaffirmed the highest entity ratings of Pakistan Telecommunication Company Limited (PTCL) at “AAA/A-1+” (Triple A/ A-1 plus). The reaffirmation reflects PTCL’s status as the leading Integrated Information Communication Technology Company in Pakistan, commanding the largest fixed-line network and a 71% market share.
According to VIS Credit Rating Company Limited (VIS), The ratings underscore PTCL’s strategic significance, backed by a strong sponsorship profile. The Government of Pakistan (GoP) holds a notable 62% shareholding, while the Etisalat Group, a major global telecom operator active in 16 countries, controls a 26% equity stake and management of the company. The financial strength and management expertise of the Etisalat Group, rated AA- and Aa3 by S&P and Moody’s respectively, further bolster PTCL’s ratings.
The telecom sector’s low business risk profile, characterized by its non-cyclical nature, reliance on PTCL’s infrastructure by other operators, and resilience to inflationary pressures, contribute to the rating. The industry’s capital-intensive and highly regulated nature also creates high entry barriers for new competitors. PTCL’s portfolio includes Pak Telecom Mobile Limited (UFONE), a mobile service provider, and U-Microfinance Bank Limited, a microfinance bank.
Financially, PTCL exhibits a sound risk profile with positive revenue trends, substantial margins, profitability indicators, and adequate liquidity. Despite new long-term borrowings to support PTML, the company’s gearing remains manageable within the rating framework. PTCL’s plan to inject further equity into PTML for capital expenditure is expected to increase gearing, but this is likely to be balanced by the company’s profitability and asset monetization strategy. The ratings depend on PTCL maintaining and enhancing its market share, capitalization, and liquidity in the future.
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