Corporate ratings firm Moody's Investor Services sees the Latin American telecoms industry as being stable for investors, offering predictable cash flows and good profit margins, Moody's said in a statement to Mexico City bourse BMV.
Over the next 12-18 months Moody's sees "minimal" changes being made to the rating classification it gives to the 15 telcos it covers in Latin America. The company said the total debt of these companies is around US$20bn.
On average the whole sector's revenues are growing at an annual rate of 5%, with operating profit margins of 20-40%. These positive signs, coupled with general economic improvement are reflected in the stable outlook, the statement said.
The factors that could influence Moody's classifications are future acquisitions and mergers that would change the competitive landscape. Additionally, fixed line companies are facing increased competitive pressure from mobile companies, which are taking subscribers away from them.
For example, the owners of Brazilian mobile operators Telemig Celular and Amazônia Celular are reportedly close to announcing whether they will accept takeover bids, and this could coincide with a review by Moody's on the sister companies' US$120mn senior unsecured notes.
Since late 2006 the ratings agency has been evaluating whether to downgrade the operators' B2 foreign currency ratings, but a successful takeover by one of Brazil's larger mobile operators would have a positive impact on the decision, Moody's analyst Soummo Mukherjee told BNamericas.
Mexican giant América Móvil, which controls Brazilian mobile operator Claro, has a A3 rating and good market share, which would improve Telemig and Amazônia's standing if Claro were to buy them.
Much depends on who buys the operators and what their plans turn out to be, particularly if they guarantee the bond, Mukherjee said, adding that groups like Vivo or Oi would also have a positive impact if either of them proves to be the sister operators' buyer."
Posted to the site on 1st August 2007
Posted to: www.cellular-news.com/story/25204.php