Top Rating

Oct 07, 2011 (LBO) - Sri Lankan mobile phone operator Dialog Axiata has retained its 'AAA(lka)' Fitch rating with a stable outlook, remaining the top player albeit with reduced market share while lowering revenue exposed to the overcrowded mobile industry. At the same time, Fitch said in a statement it has confirmed Dialog's cumulative redeemable preference shares at 'AA+(lka)'.

"Dialog's ratings incorporate support from its 83 percent shareholder, Axiata Group Berhad (Axiata), underpinned by the latter's board representation in Dialog, a common brand, and the integration of strategic and some operational functions between the two companies."

Axiata has provided "tangible support" to Dialog throughout its history, most recently in the form of shareholder loan and a corporate guarantee on a long-term offshore bank credit line, the rating agency said.

Fitch assessed Dialog's standalone profile at 'AA(lka)', underpinned by its leading market share in the local mobile industry of 38 percent at end-June 2011, down from 42 percent at endJune 2010.

The rating was also supported by Dialog's "growing diversity in revenues, comfortable operating profit margins, and continuous investments to maintain its technological edge," Fitch said.