Fitch affirms TP SA's 'BBB' rating

2004-01-08

Fitch Ratings has affirmed TP SA's senior unsecured rating of 'BBB' and its short-term rating of 'F3'. The outlook remains stable. TP SA retains its dominant market position in the fixed-line market segment despite official market liberalisation in Poland. Fitch notes stronger cash flow generation in 2003 from the company's fixed-line operations on the back of a lower cost base (driven mainly by workforce reduction and cost optimization) and a marked reduction in capital expenditure. The mobile market segment continues to increase its contribution to group revenues and EBITDA. As a result, TP SA reported positive net free cash flow for the first time in five years of PLN 1.7bn over the first nine months of 2003. Given the company's modest capex programme this is likely to remain the feature in the medium term. TP SA is fully committed to the France Telecom's plan of targeting €15bn in savings in 2003-2005 and accounts for a significant part of the savings to be made in the French carrier's international operations.