S&P: Hong Kong Telecomm view negative

Standard & Poor's said it revised the outlook on Hong Kong Telecommunications Ltd. to negative from stable and affirmed its BBB long-term corporate credit rating.

"The outlook revision, which follows PCCW Ltd.'s 2008 results announcement, reflects our view that [the company's] deleveraging process may last longer than we originally expected, as the growth rates of its TV and content (NOW TV) and mobile businesses were lower than we expected," S&P analyst Lawrence Lu said in a statement.

Supporting the ratings are the company's leading position in Hong Kong's fixed-line and broadband market and its strategy of being the only operator in Hong Kong to deliver content over fixed lines, broadband, mobiles and TVs, the agency said.

These strengths are partly offset by a highly saturated and competitive telecommunications market in Hong Kong, relatively high leverage and the possibility that the major shareholders of PCCW Ltd. will initiate more aggressive financial policies and asset strategies, S&P said.

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