Fitch affirms Kazakhtelecom

Fitch Ratings said it affirmed Kazakhtelecom's ratings at senior unsecured foreign and local currency BB and short-term foreign currency B.

The outlook is stable.

Fitch said the ratings take into account Kaztel's near-monopoly market position as a national fixed-line incumbent operator with exclusive rights to operate Public Switch Telecom Network and carry long-distance traffic. The improving macroeconomic situation in Kazakhstan creates a positive background for telecom industry growth.

The company is close to completing the build-out of a new digital trunk network capable of carrying large volumes of both data and voice traffic. This would help Kaztel to better prepare for future competition arising from the planned industry deregulation.

Fitch also said the ratings take into account the high level of uncertainty over the ultimate direction of market liberalization and its impact on the company's operations. Kaztel is facing high regulatory risks with regard to both tariffs and licenses.

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