BAKU, Azerbaijan, November 10.
International rating agency Fitch Ratings has affirmed Uzbektelecom
JSC’s Long-Term Issuer Default Rating (IDR) at ‘BB’ with a Positive
Outlook and revised the company’s Standalone Credit Profile (SCP)
to ‘bb’ from ‘bb-‘, according to the agency’s announcement.
Fitch stated that the revision of the standalone
credit profile reflects expectations of improving free cash flow
(FCF) and declining leverage over the next two years. These
improvements are supported by Uzbektelecom’s strong incumbent
position in the domestic telecommunications market, dominant share
in fixed broadband, an expanding customer base, and modest
leverage.
The agency noted that Uzbektelecom’s Long-Term IDR is
equalized with Uzbekistan’s sovereign rating of ‘BB’ and is now
aligned with its SCP. This reflects Fitch’s assessment that state
support is “Extremely Likely,” while the Positive Outlook mirrors
that assigned to the sovereign rating.
The government owns 94% of Uzbektelecom, with
strategic decisions, major investments, and key information
security functions governed by presidential and government decrees.
Fitch also highlighted that the state currently guarantees about
43% of the company’s foreign debt, a share expected to rise above
50% by the end of 2027.
Uzbektelecom held an estimated 32% share of
Uzbekistan’s mobile market and approximately 85% of the fixed
broadband market as of end-September 2026. The operator runs
integrated fixed-line and mobile networks, serving residential,
corporate, public-sector, and wholesale clients.
Fitch projects capital expenditure to peak at 49% of
revenue in 2026 before falling to about 27% in 2028 and
approximately 20% by 2029. The agency forecasts EBITDA net leverage
to rise to 2.8x in 2026 (from 2.3x in 2025) due to high capex
before gradually reducing to 2.6x by 2028.
Revenue is expected to grow at a compound annual
growth rate (CAGR) of about 10% in 2026–2029, driven by higher
ARPU, subscriber growth, and cross-selling opportunities.
At the same time, Fitch identified high network
investment requirements, currency mismatch, and single-market
concentration as factors constraining the rating. Approximately 90%
of Uzbektelecom’s debt is denominated in foreign currencies,
whereas most of its revenue is generated in Uzbek sum.
Fitch also noted that Uzbektelecom is preparing for a
potential international initial public offering (IPO) under the
national privatization program. However, the agency does not expect
the IPO to affect the rating or government support assessment,
provided the state retains majority control.
