S&P assigns BBB rating to Satelindo<\/p>\n
MELBOURNE (Reuter): Standard and Poor's Corp said yesterday it
\nhad assigned its BBB rating to PT Satelit Palapa Indonesia
\n(Satelindo).<\/p>\n
It said the outlook was stable.<\/p>\n
\"The rating reflects the large growth potential for
\ntelecommunication services in Indonesia, the diversity of
\nSatelindo's revenue stream, the relatively stable regulatory
\nenvironment, and the level of support shown by its shareholders,\"
\nS&P said.<\/p>\n
\"Offsetting these positive factors are Satelindo's short
\noperating history, the need for Satelindo to increase gearing to
\nmeet capital expenditure needs, a potential increase in mobile
\ncompetition and downward pressure on international call tariffs,\"
\nthe ratings agency said.<\/p>\n
S&P said Indonesia has one of the lowest penetration rates in
\nthe Asian region for both fixed line and cellular services.<\/p>\n
\"Given current and projected economic growth, relative per
\ncapita gross domestic product, and government commitment towards
\ndeveloping telecommunications infrastructure, the future for
\ntelecommunications providers in Indonesia looks positive.\"<\/p>\n
Satelindo owns licenses to provide satellite services, build
\nand operate a national digital cellular network and provide
\ninternational direct dialing services in Indonesia.<\/p>\n
\"These varied, though complementary services provide Satelindo
\nwith a solid underlying revenue stream and significant potential
\nto grow its business base with telecommunications development in
\nIndonesia,\" the ratings agency said.<\/p>\n
S&P said the company also operated in markets where the
\nIndonesian government clearly has defined the regulatory
\nenvironment, including a legislated duopoly for international
\nservices until 2004.<\/p>\n
\"However, while Satelindo has significant growth potential in
\nthe near term, the government's intention to introduce additional
\nmobile technologies, plus downward world trends in international
\ncall tariffs, will moderate revenue growth over the medium term,\"
\nit said.<\/p>\n
\"Further, the need to borrow in 1997 to fund additional
\ncapital expansion will place increased pressure on Satelindo's
\nimmature financial structure...\", the ratings agency said.<\/p>\n
S&P said it expected growth in Satelindo's cellular services
\nto drive much of the improvement in financial ratios in the
\nmedium term from anticipated lows in 1997.<\/p>\n
It said Satelindo may have an initial public offering in late
\n1997 or early 1998 to fund further expansion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sp-assigns-bbb-rating-to-satelindo-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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