ASTANA, Kazakhstan, December 20. Fitch Ratings has affirmed Kazakhtelecom JSC's (Kaztel) long-term Issuer Default Rating (IDR) at 'BBB-' with a stable outlook, Trend reports.
Kaztel's ratings benefit from its market-leading positions across all telecom segments in Kazakhstan, a rational market structure so far, the ownership of its network infrastructure, and a strong financial profile.
The ratings also reflect the moderate impact of the domestic operating environment and Kaztel's limited funding diversification.
Fitch expects Kaztel's Fitch-defined EBITDA net leverage to increase to 0.8x in 2023–2024 following its 5G spectrum acquisition and associated capex requirements. However, this is still comfortably below the downgrade threshold of 2.1x.
Kaztel's SCP is underpinned by its leading positions across all telecom segments in Kazakhstan. According to the company's assessment, its subscriber market share was 93 percent in fixed voice, 64 percent in fixed broadband, 58 percent in mobile, and 34 percent in pay-TV services in 2022, accounting for more than 60 percent of the total telecom market by revenue.
In 2018 and 2019, Kaztel acquired control of the second- and third-largest mobile operators (Kcell and Tele2), transforming itself into a diversified telecom services provider from a predominantly fixed-line operator.
Fitch expects Kaztel's cash capex to increase to 58 percent of revenues in 2023 and 25 percent in 2024, from 19 percent in 2022, due to mobile infrastructure roll-out and upgrade costs, spectrum payments, further upgrades to fixed infrastructure, and investments in digital platforms and services.
