Moody's assigns Kcell first-time Baa3 rating with stable outlookMoody's Ratings has assigned Kcell a first-time Baa3 long-term issuer rating with a stable outlook, the agency said.Moody's set Kcell's Baseline Credit Assessment (BCA) at ba2.The Baa3 rating reflects Kcell's strong competitive position as Kazakhstan's second-largest mobile operator, supported by high-quality spectrum holdings, nationwide network coverage, 5G leadership, improving subscriber trends and recent market share gains, Moody's said.The agency expects Kcell to start generating positive free cash flow within one to two years, with credit metrics improving as capital spending moderates and recent network investments increasingly support revenue and EBITDA growth.A further support factor is Kcell's close relationship with Kazakhtelecom, which provides operational benefits through fiber infrastructure, converged products, customer cross-selling and financial support, including guarantees on certain debt facilities.Moody's also cited Kcell's ultimate ownership by and full integration into the Samruk-Kazyna group, along with its close oversight of the company's strategy and financial profile, underscoring Kcell's strategic importance in advancing Kazakhstan's digitalization through expanded affordable nationwide internet connectivity. The agency sees a high likelihood of extraordinary state support for Kcell if needed."Our assessment is supported by the state's strong ownership and oversight through Samruk-Kazyna, as well as a demonstrated track record of support, including 70 billion tenge of direct funding," the agency said.The rating is constrained by Kcell's operational concentration in Kazakhstan, a vast and sparsely populated market that increases the cost and complexity of nationwide coverage; elevated capital spending and negative free cash flow from the ongoing 5G rollout and network modernization; and uncertainty over the company's ability to monetize network investments through sustained tariff increases and average revenue per user growth while maintaining subscriber growth and market share.As of June 2026, Kcell held 2.1 billion tenge in cash, 6.8 billion tenge in short-term treasury bills and 38.5 billion tenge in available committed bank facilities. Moody's considers these liquidity sources sufficient to cover debt maturities, capital spending and operating needs over the next 12-18 months. The agency expects Kcell to keep drawing on committed facilities to fund the final phase of its 5G investment program before free cash flow gradually turns positive in 2027.The stable outlook reflects Moody's expectation that Kcell's EBITDA will gradually improve as the company monetizes its network investments, with cash flow turning positive and credit ratios strengthening as investment moderates over the next 12-18 months.Kcell, which operates the Kcell and Activ brands, provides digital telecommunications services including mobile and fixed-line communications, data transmission and internet access, financial services, digital services and mobile applications. It is part of the Kazakhtelecom group.As of July 1, 2026, Kcell's shareholders were Kazakhtelecom with 51% and private company KC Holding LTD with 14.87%. (ICE ALMATY)

Fonte notizia: INTERFAX