Fitch lifts Telkom, Telkomsel view to positive

Fitch Ratings said it revised PT Telekomunikasi Indonesia Tbk's (Telkom) outlook to positive from stable, along with PT Telekomunikasi Selular's (Telkomsel) outlook to positive from stable.

Telkom's long-term foreign-currency issuer default rating was affirmed at BB+, long-term local-currency issuer default rating at BB+ and senior unsecured rating at BB+.

Telkomsel's long-term local-currency issuer default rating was affirmed at BBB, long-term foreign-currency issuer default rating at BBB-, national long-term rating at AAA(idn) and senior unsecured rating at BBB-.

The revisions follow the recent revision of Indonesia's outlook to positive from stable, Fitch said.

Telkom's ratings are closely correlated with those of the sovereign. This is because the Indonesian government holds a 52.44% majority stake in the company and exerts significant influence on key business and financial decisions, the agency said.

Telkomsel's ratings are higher than the sovereign's by two notches, reflecting a strong credit profile and Singapore Telecom's strategic shareholding and influence, which Fitch said it views as an important counterbalance to the Indonesian government's ownership.

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