Fitch rates Hanaro Telecom BB

Fitch Ratings said it assigned Hanaro Telecom Inc. a long-term foreign-currency issuer default rating of BB.

The outlook is stable.

The rating reflects the strategic importance of Hanaro as South Korea's only alternative fixed-line voice operator, its enhanced presence in the broadband Internet access sector after its merger with Thrunet Co., Ltd. and the South Korean government's favorable regulations aimed at encouraging second-tier telecom operators, Fitch said.

Nevertheless, the agency said Hanaro faces tough challenges ahead on the back of a shrinking domestic voice market and increasing competition in the broadband sector.

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