Telco giant PLDT Inc. got a ratings lift on the heels of an upgrade on the Philippine sovereign rating by Fitch Ratings.
In a statement, Fitch Ratings announced the upgrade of PLDT’s long-term foreign currency issuer default rating, or IDR, to “BBB+” from “BBB.”
It also affirmed PLDT’s long-term local-currency IDR at “BBB+” while its national long-term rating stood at “AAA(phl)” with a “stable” outlook.
“The upgrade follows the upgrade of the Philippines’ country ceiling,” Fitch Ratings said.
Fitch said it considered PLDT’s significant market position, being one of two major telcos.
“PLDT competes against the country’s second-largest telecom operator, Globe Telecom, Inc. (BBB-/stable), and benefits from fully integrated fixed and mobile services, which enable convergence,” Fitch Ratings said.
“In addition, the joint acquisition of San Miguel Corp.’s telecom assets by PLDT and Globe should removes the threat of new competition in the medium term,” it added.
It likewise cited PLDT’s recovery after years of declining profitability.
“PLDT’s strategy change to focus more on profitability rather than market share should stabilize price competition and ease EBITDA [earnings before interest, taxes, depreciation, and amortization] margin pressure,” it said.