Fitch affirms SLT at 'B+'; outlook stable

Fitch Ratings has affirmed Sri Lanka Telecom PLC's (SLT) Long-term foreign currency (LTFC) Issuer Default Rating (IDR) at 'B+', which is constrained by Sri Lanka's LTFC IDR.

At the same time, the agency has affirmed SLT's Long-term local currency IDR at 'BB-' (BB minus), as well as its National Long-term rating at 'AAA(lka)'. The Outlook is Stable.

The rating on SLT's US$ 100m senior-unsecured notes due in 2009 has been affirmed at 'B+' with a recovery rating of 'RR4'.

SLT's ratings reflect its entrenched position in the country's telecommunications market, its robust ability to generate cash flow from operations and its strong financial profile. SLT is a fully integrated operator with a monopoly in wire-line services.

The company has defended its market share in the fixed-wireless space (June 2008: 30%) and has improved its market share in the mobile segment (June 2008: 20%; FY06: 16%).

The latter is expected to account for a significant share of SLT's revenue growth over the short- to medium-term and is now positively contributing to SLT's operating cash generation.

The company also enjoys a dominant share of the international long-distance and IP and data-related services. In the nine moths to September 2008.