Financial Times

SLT wins top rating despite billing problems
Sri Lanka Telecom (SLT) has received SL 'AAA' (sri) rating from Fitch Ratings Lanka, Ltd., signifying an exceptionally strong capacity to meet financial commitments that can be paid in full and on time.

It won the top rating despite difficulties in the new billing system that had delayed revenue collection for several months. Fitch Vice President, Alistair Corera said billing problems and delays in collecting payments did not have a bearing on the ratings decision which only focuses on the underlying business strength of a company.

"These issues, which are mainly operational, do not damage the rating, as it is based on the industry risk level, the operating environment in a social, demographic, regulatory and technological changes context, the management focus in relation to corporate strategy, risk tolerance and funding policies," he said.

The Japanese telecom operator, NTT's stake in the company also played a large part in the SL 'AAA' rating which denotes the highest safety of timely payment of interest and principal.

The rating was given to SLT, which has an annual turnover in excess of Rs.22 billion, in recognition of the company's lowest expectation of credit risk. Fitch also upgraded SLT's 2000/2005 Unsecured Redeemable Debenture to AAA (sri) from AA+ ( sri).

The rating takes into account SLT's position as a fully integrated telecommunications service provider, its dominant market share in the Direct Exchange Line business, the capacity to offer data and other network services and the prospects of growth in the wireless telecommunication sector.

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