Standard & Poor's (S&P) Ratings Services has revised its outlook on Israeli cellular services provider Partner Communications to positive from stable. At the same time, S&P affirmed its B+ long-term corporate credit and B- senior unsecured debt ratings on the company.
"The outlook revision reflects Partner's strong operating and financial performance since ratings were assigned to the company in July 2000," said S&P’s credit analyst and director Leandro de Torres Zabala. "The outlook revision also reflects expectations of further organic
growth--though at a more moderate pace--which should allow the company to further improve its credit protection metrics and operating cash flow generation within the next two years."
Over the last two and a half years, Partner has grown to become the second-largest operator in, and has captured a 29 percent market share of the Israeli wireless telephony market. This is despite being the latest entrant of the four main players in Israel.
Partner's growth has been achieved on the back of its global system for mobile communications (GSM) technology, which had been unique in Israel until the second quarter of 2002, the attractiveness of the Orange brand, a strong customer service focus and the growth of the Israeli wireless telephony market over the past two years.
As a result, Partner recruited about 1.84 million subscribers as of December 2002, and achieved an EBITDA margin of 26 percent on revenues of $814 million for the full fiscal year 2002.
Partner confronts high leverage and increasing technology-driven competition. Partner's main competitor, Cellcom Israel, started to operate a GSM network in the second quarter of 2002, and the third-largest competitor, Pele-Phone Communications, is set to launch a technology superior to general packet radio service in 2003. Therefore, Partner is no longer the sole GSM provider, which had been a key competitive advantage up until now. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
