TOWR - Fitch affirms TOWR's parent company debt ratings

TOWR - Fitch affirms TOWR's parent company debt ratings Fitch Ratings has affirmed debt rating of Sarana Menara Nusantara's (TOWR) parent company, Profesional Telekomunikasi Indonesia's (Protelindo) at 'BBB' for debt in foreign currency, and AAA(idn)' for national debt rating with a stable outlook. (Source: Fitch) Comment: Our expectation on towercos is generally line-up with those of Fitch’s as towerco business is facing an impact of consolidation. However, we also witness signs of encouraging growth in FTTH/FTTT, especially for TOWR, thanks to MNOs demands for fiberization to improve data service quality. We believe continuous diversification of non-tower business coupled with strong cash flow become the core strengths of TOWR and main factor of its investment grade ratings. Having said that, we maintain our NEUTRAL stance on towercos as we are seeing rent fee to remain under pressure for awhile, yet in medium term, we expect rent fee to bounce back on the back of growing bundling services.