S&P boosts VolgaTelecom

Standard & Poor's said it raised its long-term corporate credit rating on VolgaTelecom (OJSC) to BB- from B+, reflecting the company's improving business profile.

The outlook is stable.

At the same time, S&P said it raised its long-term Russia national scale rating on VolgaTelecom to ruAA- from ruA+.

VolgaTelecom's improving business profile is marked by its dominant market share in key segments, enhanced network quality, steadily improving regulatory and industry dynamics and gradually increasing revenue diversification, the agency added.

The ratings remain constrained, however, by uncertainties regarding further industry restructuring, VolgaTelecom's reduced financial flexibility due to increased capital investments and negative free cash flows and the relatively slow growth of the company's new services, limited by the moderate economic and demand characteristics of its franchise area, S&P said.

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