Fitch affirms Globe Telecom's credit rating

ABS-CBN News

Posted at Nov 23 2012 05:10 PM | Updated as of Nov 24 2012 01:10 AM

MANILA, Philippines - Debt watcher Fitch Ratings on Friday affirmed Globe Telecom, Inc.'s grade owed to the telco's "stable" credit metrics.

Globe Telecom's long term foreign and local currency issuer default ratings (IDR) was maintained at 'BBB-' with a stable outlook.

"The ratings reflect Globe's stable credit metrics as the number-two telecom operator in the Philippines with over 30% market shares in wireless and broadband," Fitch said.

However, the debt watcher said the Globe Telecom's operating margin is foreseen to decline in the medium term amid tight competition in the local telco industry.

"Fitch believes that this trend is unlikely to reverse in a maturing wireless industry with an over 100% penetration rate," the credit rater said.

Profits of Globe Telecom fell 15% to P6.81 billion in the nine months to September from P7.99 billion a year ago.

Earlier this month, the firm has offered to buy up Lopez-led Bayan Telecommunications, Inc.'s debts. The move could possibly lead to the Ayala telco's take over of Bayan.