Global Telecommunications Industry
DECEMBER 28, 2010
GLOBAL CORPORATE FINANCE
RATING METHODOLOGY
Global Telecommunications Industry
Summary
This rating methodology explains Moody’s approach to assessing credit risk for companies in the telecommunications industry. This publication is intended to provide a reference tool that can be used when evaluating credit profiles within the telecommunications industry, helping companies, investors, and other interested market participants understand how key qualitative and quantitative risk characteristics are likely to affect rating outcomes. This methodology does not include an exhaustive treatment of all factors that are reflected in Moody’s ratings but should enable the reader to understand the qualitative considerations and financial ratios that are usually most important for ratings in this sector. This rating methodology replaces the Global Telecommunications Methodology published in December 2007. While reflecting the same core principles as the December 2007 methodology, this updated framework incorporates refinements that better reflect the key credit fundamentals of the telecommunications industry. This report includes a detailed rating grid and illustrative mapping of a sample of companies against the factors in the grid. The purpose of the rating grid is to provide a reference tool that can be used to approximate credit profiles within the telecommunications sector. The grid provides summarized guidance for the factors that are generally most important in assigning ratings to telecommunications companies. The grid is a summary that does not include every rating consideration, the weights shown for each factor in the grid represent an approximation of their typical importance for rating decisions but actual importance may vary significantly, and our illustrative mapping uses historical results while our ratings consider forward-looking expectations. Accordingly, the grid-indicated rating is not expected to match the actual rating in most
GLOBAL CORPORATE FINANCE
RATING METHODOLOGY
Global Telecommunications Industry
Summary
This rating methodology explains Moody’s approach to assessing credit risk for companies in the telecommunications industry. This publication is intended to provide a reference tool that can be used when evaluating credit profiles within the telecommunications industry, helping companies, investors, and other interested market participants understand how key qualitative and quantitative risk characteristics are likely to affect rating outcomes. This methodology does not include an exhaustive treatment of all factors that are reflected in Moody’s ratings but should enable the reader to understand the qualitative considerations and financial ratios that are usually most important for ratings in this sector. This rating methodology replaces the Global Telecommunications Methodology published in December 2007. While reflecting the same core principles as the December 2007 methodology, this updated framework incorporates refinements that better reflect the key credit fundamentals of the telecommunications industry. This report includes a detailed rating grid and illustrative mapping of a sample of companies against the factors in the grid. The purpose of the rating grid is to provide a reference tool that can be used to approximate credit profiles within the telecommunications sector. The grid provides summarized guidance for the factors that are generally most important in assigning ratings to telecommunications companies. The grid is a summary that does not include every rating consideration, the weights shown for each factor in the grid represent an approximation of their typical importance for rating decisions but actual importance may vary significantly, and our illustrative mapping uses historical results while our ratings consider forward-looking expectations. Accordingly, the grid-indicated rating is not expected to match the actual rating in most