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.
