Press Release

JCR-VIS places rating of TFC issue of Telecard Limited under Rating Watch- Developing Status

Karachi, October 21, 2010: JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained the ‘BBB’ rating assigned to the TFC issue of Telecard Limited.

In FY2010, the company faced a breakdown in the long distance international services network, on account of which revenues from core operations came under stress. Also placing a significant drag on liquidity are the Access Promotion Contribution (APC) charges to be paid to Pakistan Telecommunication Authority (PTA); payment of which is being contested in court.

While continuing to use spectrum in other bands including the primary 1.9 Ghz band used for WLL services, Telecard sold its 3.5 Ghz related WLL License for all 14 regions of Pakistan in FY2010, which provided the company with necessary liquidity. LDI services have now been restored to near full capacity and this is expected to improve cash from core operations in FY11. Meanwhile, the company is also making efforts to develop solutions targeted for different market segments from within its existing product portfolio, results of which will be tracked over time.

With the case against PTA on-going, the demands on cash from this source are likely to persist. In case the court decides in favor of Telecard, then the cash refunds made by PTA to the company would be used for accelerated redemption payments of the TFC, or the company will revert back to the original redemption schedule, depending on the timing and quantum of such refunds.

Another area with court hearing under progress is related to the timing of payment of spectrum fees of Rs. 1.6b. The outcome of the legal proceedings may have significant impact on the liquidity profile of the company. In view of the above, rating assigned to the TFC issue has been placed under ‘Rating Watch – Developing’ status.

For further information on this rating announcement, please contact Ms. Sabeen Saleem (sabeen@jcrvis.com.pk) or Ms. Sobia Maqbool (sobia@jcrvis.com.pk) at 021-35311861 or fax to 021-35311872-3.



Faheem Ahmad
President & CEO

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 2010 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .