Moody's rates Saudi Telecom A1

Moody's Investors Service said it assigned A1 long-term local- and foreign-currency issuer ratings to Saudi Telecom Co., which is 70% owned by the government of Saudi Arabia.

The outlook is positive.

The ratings reflect Moody's treatment of government-related issuers. The ratings also factor in the company's underlying strength, the A1 local-currency rating of Saudi Arabia and the high level of support likely to be provided in a distress situation by Saudi Arabia, the agency said.

More cautiously, the ratings take into account that as the telecom market is progressively liberalized, the company's market shares and pricing power will come under increasing pressure from newly licensed market entrants, Moody's said.

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