Thai Rating and Information Services Co., Ltd. (TRIS) announced Wednesday 14 March 2001 that it affirmed a "A-" rating to Bt6,000 million senior debentures and also assigned a "A-" rating to Bt15,000 million senior debentures of Total Access Communication PLC (TAC). The ratings reflect strong growth in demand for mobile phone services in Thailand, TAC's strong market position and benefits from synergy with its strategic partner. These strengths are partially offset by the uncertain regulatory environment, potential intensification of competition and the need for substantial capital expenditures in the future.
TRIS reported that after showing an impressive 53% growth in 2000, the number of mobile phone subscribers in Thailand is expected to grow still further. Major factors stimulating the high growth of mobile phone services are lower entry cost for consumers, various attractive promotional packages and the popularity of prepaid subscription programs. Moreover, the low penetration rate for mobile phones in Thailand, around 6% at the end of 2000, indicates that the market has plenty of room for expansion. Competition is anticipated to become more intense as more operators join in the market. The regulatory environment remains uncertain as the new telecommunication law is still undergoing parliamentary scrutiny and members of the National Telecommunication Committee (NTC) have not yet been selected.
TRIS said that TAC is the second largest mobile phone operator in Thailand commanding around 41% of market share while the market leader, Advanced Info Service PLC (ADVANC), has 52% of market share. TAC's subscribers increased around 42% during 2000. Having Telenor Asia Pte Ltd. (Telenor), a wholly owned subsidiary of Telenor AS (a Norwegian state-owned telecommunication company), as a strategic partner should improve TAC's competitive edge in technology and marketing as well as give the company bargaining power when purchasing networks and handsets. In addition, Telenor's investment in TAC improved TAC's capital structure by reducing its total debt to capitalization
TRIS said TAC plans to use the Bt15,000 million debentures to redeem its convertible debentures and long-term notes which come due in 2001. During September and November 2000, TAC purchased US$42 million of its convertible debentures in the secondary market, which means US$379million (or about Bt15,000 million) will mature in 2001. Currently, TAC has fully hedged against foreign exchange risk for the debt that will be redeemed in 2001. TAC also has a Bt 16,000 million bank loan facility, comprising of Bt13,000 million long-term loans and Bt3,000 million in revolving credit. TAC may use the proposed Bt15,000 million debentures to replace the Bt13,000 million bank loan facility.
TAC has revised its investment in network expansion to improve its service quality and coverage. Capital expenditures for 2001 through 2003 will total approximately US$640 million, about US$340 million in 2001 and US$300 million during 2002 - 2003. TRIS is concerned that this substantial investment may lead to higher gearing in the future because part of the investment will have to be debt financed.
Total Access Communication PLC (TAC) Issue Rating TAC05OA: Bt6,000 million senior debentures due 2005 Affirmed at A- TAC064A: Bt15,000 million senior debentures due 2006 A-
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TRIS reported that after showing an impressive 53% growth in 2000, the number of mobile phone subscribers in Thailand is expected to grow still further. Major factors stimulating the high growth of mobile phone services are lower entry cost for consumers, various attractive promotional packages and the popularity of prepaid subscription programs. Moreover, the low penetration rate for mobile phones in Thailand, around 6% at the end of 2000, indicates that the market has plenty of room for expansion. Competition is anticipated to become more intense as more operators join in the market. The regulatory environment remains uncertain as the new telecommunication law is still undergoing parliamentary scrutiny and members of the National Telecommunication Committee (NTC) have not yet been selected.
TRIS said that TAC is the second largest mobile phone operator in Thailand commanding around 41% of market share while the market leader, Advanced Info Service PLC (ADVANC), has 52% of market share. TAC's subscribers increased around 42% during 2000. Having Telenor Asia Pte Ltd. (Telenor), a wholly owned subsidiary of Telenor AS (a Norwegian state-owned telecommunication company), as a strategic partner should improve TAC's competitive edge in technology and marketing as well as give the company bargaining power when purchasing networks and handsets. In addition, Telenor's investment in TAC improved TAC's capital structure by reducing its total debt to capitalization
TRIS said TAC plans to use the Bt15,000 million debentures to redeem its convertible debentures and long-term notes which come due in 2001. During September and November 2000, TAC purchased US$42 million of its convertible debentures in the secondary market, which means US$379million (or about Bt15,000 million) will mature in 2001. Currently, TAC has fully hedged against foreign exchange risk for the debt that will be redeemed in 2001. TAC also has a Bt 16,000 million bank loan facility, comprising of Bt13,000 million long-term loans and Bt3,000 million in revolving credit. TAC may use the proposed Bt15,000 million debentures to replace the Bt13,000 million bank loan facility.
TAC has revised its investment in network expansion to improve its service quality and coverage. Capital expenditures for 2001 through 2003 will total approximately US$640 million, about US$340 million in 2001 and US$300 million during 2002 - 2003. TRIS is concerned that this substantial investment may lead to higher gearing in the future because part of the investment will have to be debt financed.
Total Access Communication PLC (TAC) Issue Rating TAC05OA: Bt6,000 million senior debentures due 2005 Affirmed at A- TAC064A: Bt15,000 million senior debentures due 2006 A-
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