According to the Fitch press release, "The ratings reflect Sibirtelecom's dominant market position in its area of operations in Eastern and much of western Siberia. The ratings also reflect the influence of the company's 50.7% majority shareholder, Svyazinvest, on strategic decision-making processes."
Fitch downgraded OAO Uralsvyazinform's ratings to senior unsecured B+ from BB- and national senior unsecured A-(rus) from A+(rus) with a negative outlook. The company's two domestic bonds of 2 billion rubles and 3 billion rubles were also downgraded to A-(rus) from A+(rus). The short-term rating was affirmed at B.
"The downgrade reflects an anticipated increase in Urals' leverage on the back of larger-than-projected capital expenditure and increasing competition in the mobile segment, which led to significant mobile margin erosion," the Fitch press release said.
