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March 25, 2008 |
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MOBILE-8: S&P Affirms 'B' Long-Term Corporate Credit Rating Standard & Poor's Ratings Services revised the outlook on Indonesia's wireless operator PT Mobile-8 Telecom Tbk. to negative from stable. At the same time, Standard & Poor's affirmed its 'B' long-term corporate credit rating on the company. "The rating on Mobile-8 reflects the company's aggressive expenditure plan, highly leveraged financial profile, and its position as a small player in a scale-sensitive industry," said Standard & Poor's credit analyst Manuel Guerena. "These strengths are partly offset by Mobile-8's strong subscriber growth and favorable domestic wireless subscriber growth prospects, and good debt maturity profile." Mobile-8's liquidity position is adequately supported by the company's cash balance and short term investments of Indonesian rupiah (IDR) 1.1 trillion as of Dec. 31, 2007, which are sufficient to cover short-term obligations of IDR26 billion. In the medium term, however, capital expenditures will use a large portion of this cash reserve. "The downward pressure on Mobile-8's rating will increase further if: (1) the company doesn't start making up for the network expansion delay through the rest of 2008, (2) average revenue per user, sustained so far, shows a steady decline, or (3) the company's total debt to annualized EBITDA rises above 6x (its annualized ratio was 5.4x in the fourth quarter of 2007). Conversely, the outlook could be revised back to stable if the company expands its network and improves its competitive performance on a sustainable basis, and there is significant improvement in its financial risk such that total debt to EBITDA stays below 5x," Mr. Guerena noted. About Mobile-8 Telecom Headquartered in Jakarta, Indonesia, PT Mobile-8 Telecom Tbk is a part of Bimantara Group. Established in 2002 and commercially launched in 2003 is the fourth largest mobile cellular operator in the country. Its product is Fren, which offers pre-paid and post-paid billing services. The Company's other products and services include Fren Prabayar, Fren Pascabayar, FrenSLI 01068, Layanan, Value Added Services, Fren RingGo, TV MOBI and Fren Mobile Internet. Its subsidiaries, which provide mobile cellular network services, are PT Komunikasi Selular Indonesia, PT Metro Selular Nusantara and PT Telekomindo Selular Raya. As of May 31, 2007, the three subsidiaries have been merged into the Company. |
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