CARE assigns ‘A+’, ‘PR1+’ ratings to Tata Teleservices

MUMBAI: CARE has assigned ‘CARE A+’) rating to long-term bank facilities worth Rs 150 crore of Tata Teleservices Ltd (TTSL), which indicates the facilities offer adequate safety for timely servicing of debt obligations and carry low credit risk.

The rating agency has also assigned ‘PR1+’ rating to short-term bank facilities worth Rs 100 crore of TTSL, which indicates strong capacity for timely payment and lowest credit risk.

The ratings derive strength from the continuous support received from Tata group, successful balance sheet restructuring carried out during FY09, strategic alliance with NTT DoCoMo involving upfront equity infusion, pan-India presence in the CDMA segment and increase in the subscriber base due to launching of services in the GSM segment.

However, the ratings are constrained by losses during the past years, low profitability, significant expansion plans involving substantial capex and increasing competition in the telecom sector.

Earning cash profitability and improving the networth in the current market condition, increasing the subscriber base and improvement in margins are the key rating sensitivities.