Press Release

VIS Reaffirms Entity Ratings of Pak Telecom Mobile Limited

Karachi, January 27, 2025: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Pak Telecom Mobile Limited (‘PTML’ or ‘the Company’) at ‘AA-/A1’ (Double A Minus/A One). Medium to long term rating of 'AA-' indicates high credit quality with strong protection factors. Risk is modest but may vary slightly from time to time because of economic conditions. Short-term rating of 'A1' suggests strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on November 22, 2023.

Pak Telecom Mobile Limited (‘PTML’ or ‘the Company’), a public limited company, incorporated on July 18, 1998, provides cellular mobile telephony services in Pakistan. The Company began operations in January 2001 under the brand name ‘Ufone’ and is a wholly owned subsidiary of Pakistan Telecommunication Company Limited (PTCL).

Assigned ratings reflect PTML’s strong profile and support of the parent, Pakistan Telecommunications Corporation Limited (PTCL) (VIS rating: AAA/A1+), which is a state-owned entity with 62.18% shareholding held by the Government of Pakistan while e& Group, managing sponsor, holds an equity stake of 26%. e& has an "AA-" rating from S&P Global and "Aa3" from Moody's, both with stable outlooks. The sponsor has consistently demonstrated financial support to PTML as needed. Ratings are further supported by the sector’s favorable business risk profile, characterized by relative inelastic demand and medium-to-low competition. The Company’s topline and gross margins have shown improvement, supported by rising demand for data and voice services, along with effective cost optimization measures. However, its financial risk profile remains constrained due to a highly leveraged capital structure, which continues to pressure profitability.

The potential merger with Telenor, currently in the pipeline, is expected to significantly enhance the Company’s market share and operational efficiency. The anticipated materialization of this merger, coupled with continued sponsor support from PTCL, remain important for ratings.

For further information on this ratings announcement, please contact on 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 .