Moody's may downgrade Telkom

Moody's Investors Service said it placed the Baa1 senior unsecured issuer rating of Telkom SA Ltd. and the A1.za national scale long-term issuer rating under review for possible downgrade.

The downgrade review is due to increased concerns about the company's ability to stem its revenue losses and margin compression in the face of intensifying competition, along with continued migration of its higher-margin fixed-line traffic to mobile and regulatory changes, Moody's said.

The company's operations, strategies and market image also have been impacted by a series of management changes in the past two years and substantial costs it faces to successfully stabilize its start-up mobile operations, the agency said.

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