The Standard & Poor’s rating agency last night confirmed it’s A and A- ratings for Cesky Telecom’s liabilities in local and foreign currency, respectively. Moreover, S&P withdrew the CreditWatch status that was given to all Cesky Telecom’s ratings on July 31 in connection with CT’s plan to acquire the remaining 49% stake in the cellular operator Eurotel. Outlook remains “negative”. The agency also said that if CT funds the Eurotel acquisition with debt (which seems likely), its ratings for CT are unlikely to fall below a BBB+ rating. The confirmation of the ratings and the removal off CreditWatch is positive, though the impact on the stock will likely be limited, if any. S&P’s assessment is that Cesky Telecom‘ s fixed-line business will be under pressure from growing competition and customer migration to cellular telephony, which should be partially compensated by the solid performance at Eurotel (this assessment does not differ from the market consensus).
Separately, CT said it now has 400,000 dial-up Internet customers, of which 85% use Quick, the company’s free-access service. CT is the country’s leading dial-up Internet access provider. Neutral.
(Ondrej Datka)