Press Release

VIS Reaffirms Entity Ratings of Pakistan Telecommunication Company Limited

Karachi, January 10, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Pakistan Telecommunication Company Limited (PTCL) at "AAA/A1+" (Triple A/ A1 plus). The medium to long-term rating of 'AAA' denotes highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. The short-term rating of 'A1+' denotes Strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. The previous rating action was announced on November 7, 2023.

The ratings incorporate the issuer's strong sponsor profile, given that the GoP holds significant shareholding (62%) while Etisalat Group holds a 26% equity stake and management control. Having 48 years of operating experience, Etisalat is present in 32 countries and is one of the largest telecom operators in the world. The ratings also consider the financial soundness and management acumen of Etisalat Group; the Group is rated AA- and Aa3 by S&P and Moody's, respectively. The ratings are also underpinned by low business risk profile of the telecom sector owing to the non-cyclical nature of the industry, dependence of other operators on the infrastructure offered by the Company and low sensitivity to inflationary pressures on operations conducted. Moreover, business risk also factors in capital-intensive and highly regulated nature of the sector serving as natural high barrier to entry for new entrants. The assigned ratings reflect PTCL's strategic market position as the country’s leading Integrated Information Communication Technology Company, having the largest fixed-line network with highest market share. PTCL has wholly owned subsidiaries, including Pak Telecom Mobile Limited (UFONE), a mobile service provider, and a Microfinance Bank, U-Microfinance Bank Limited. PTCL currently is in the process to acquire Telenor Pakistan.

The ratings reflect the strong financial risk profile of the Company, marked by positive momentum in revenues, sizable margins and profitability indicators, adequate liquidity profile, and substantial debt-service coverages. Despite procurement of incremental long-term borrowings to support PTML, gearing remained manageable. Given, PTCL’s plans to acquire Telenor and to incur capital expenditure, gearing indicators of the Company are expected to trend upwards. However, the magnitude of the increase is expected to be partially offset by positive trajectory of the PTCL’s profitability, coupled with the planned asset monetization strategy. The ratings will remain contingent upon retention and improvement in market share coupled with maintenance of capitalization and liquidity indicators going forward along with timely incorporation of technology updates in their system.

For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.







Applicable Rating Criteria: Industrial Corporates.
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .