S&P drops Telkom outlook to negative

Standard & Poor's said it revised its outlook on Telkom SA Ltd. to negative from stable.

At the same time, the agency said it affirmed the BBB long-term corporate credit rating.

S&P said the rating action follows its reassessment of Telkom's business risk profile to "fair" from "satisfactory" and its revised view that profitability erosion, combined with a surge in capital expenditures, could result in sustained very weak free cash flow generation and credit metrics that are no longer commensurate with expectations for the current rating.

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