Fitch rates China Netcom BBB+

Fitch Ratings said it assigned a long-term foreign-currency issuer default rating of BBB+ to China Netcom Group Corp. Ltd.

The outlook on the rating is stable.

Fitch said the rating reflects the company's position as the leading fixed-line service operator with a dominant market share in China's northern provinces and its sound financial profile supported by growing operating profit and cash flow as well as moderate leverage.

The rating also takes into consideration the robust demand and good growth prospects in China's telecom market, which has low penetration rates (though growth in fixed-line subscribers is easing and future growth will mainly be confined to the less developed provinces and rural areas), the limited number of competitors in the local access market and implicit support the majority state-owned operator enjoys on account of an operating environment broadly conducive to continuing favorable market positions and growth.

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