Fitch affirms Telkom

Fitch Ratings said it affirmed PT Telekomunikasi Indonesia Tbk's long-term foreign- and local-currency issuer default ratings at BB.

The outlook is stable.

The agency said Telkom's ratings reflect its diversified operations and leading market positions in fixed-line and data services as well as in wireless services through PT Telekomunikasi Selular.

However, Fitch cautioned that industry risk in the wireless segment is on the rise with increased fragmentation, an intensely competitive environment and tower-sharing initiatives that favor new entrants. And although the fixed-line franchise is an important source of positive free cash flow and is supported by moderate capital intensity in recent years, the agency said it is increasingly challenged by fixed-to-mobile substitution.

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