Moody's may lift Embratel

Moody's Investors Service said it placed the Ba3 global local currency issuer rating and the Ba3 foreign currency senior unsecured rating of Empresa Brasileira de Telecomunicacões SA (Embratel) under review for possible upgrade.

"The review of Embratel's Ba3 global local currency rating primarily reflects the company's demonstrated ability to deliver overall revenue growth by investing in the development of data and local services segments, its lower exposure to the highly competitive long distance segment and strong credit metrics for its rating category," said Moody's AVP-analyst Soummo Mukherjee.

"Embratel has been successful in diversifying its portfolio of services from long distance to local telephony, partially benefiting from its partnership with Net Servicos (rated Ba2 / stable), in which Embratel has an important participation, through its Net Fone offering. Growth in the local telephony segment , along with growth in the data segment, has allowed Embratel to improve its revenue mix, with 53% of total revenues from the long distance segment in the second quarter of 2007 down from 64% in the same quarter two years ago."

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