JCR-VIS Credit Rating Co Ltd (JCR-VIS) has assigned initial medium to long-term and short-term entity credit ratings of 'A' (Single A) and A-2 (A tow) respectively to Wateen Telecom (Pvt) Ltd (Wateen Telecom). The outlook on the medium to long-term rating is stable, said a press release on Wednesday.
The ratings take into account Wateen Telecom plans to position itself as a fully integrated provider of telecommunication services, including long-haul and metropolitan area optic fiber cable, long-distance and international (LDI) connectivity and last mile solutions that will be primarily based on the fourth-generation broadband telecommunication technology, WiMAX.
The technology risk associated with the deployment of new technology has to quite an extent been mitigated by the guarantees acquired from the equipment vendors against performance of the supplied equipment, as well as the fact that in most cases the equipment vendors have also been given operation & maintenance contracts for their installed equipment.
The nature of Wateen Telecom's infrastructure will allow it to target different market segments while enjoying high margins for its last-mile solutions. This market positioning has been further bolstered in the presence of captive business of Warid Telecom (Pvt) Ltd (Warid Telecom)- a sister concern- for fiber optic and other infrastructure services.
The track record of the company's management is strong even in the brief history seen so far, with Wateen Telecom posting a reasonable profit in its full first year of operations, and healthy cashflows during FY 2007 from existing operations, which are set to go up substantially in 2H FY2007 following the commencement of operations of the company's own optic fiber network.
A key driver of the assigned ratings is the level of sponsor support JCR-VIS believes that Wateen Telecom has available keeping in view the significant investment of the sponsor group in Pakistan, particularly in the banking and telecommunication sector.-PR