S&P ups Sri Lanka Telecom outlook to stable

Standard & Poor's said it revised its outlook on Sri Lanka Telecom Ltd. to stable from negative and affirmed the company's B+ foreign currency and BB- local currency corporate credit ratings.

The outlook revision comes after S&P's assignment of its foreign and local currency ratings to the Democratic Socialist Republic of Sri Lanka (foreign currency B+/stable/B, local currency BB-/stable/B) on Dec. 8. Sri Lanka Telecom's previous negative outlook reflected heightened sovereign risk.

The rating on Sri Lanka Telecom reflects its dominant position in the fixed-line business, expected growth in the wireless market and adequate cash flow protection measures, the agency said.

S&P said the rating is constrained by intense competition, weak market position in the wireless business, regulatory uncertainties and large capital expenditure requirements.

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