Moody's reviews Qtel's A1 rating for possible downgrade

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USD 1.5 billion of rated debt affected
DIFC, March 10, 2010 -- Moody's Investors Service today placed the A1 long term ratings for Qatar Telecom Q.S.C. ("Qtel")Qatar Telecom Q.S.C. ("Qtel"), the A1 rating for QtelQtel International Finance Limited and A1-rated bonds issued under QtelQtel's GMTN programme under review for possible downgrade. This follows today's change in outlook to negative from stable of the Ba1 Corporate Family Rating for PT Indosat Tbk ("Indosat"); QtelQtel owns 65% of Indosat.

"Following the change in outlook for Indosat in light of a weaker financial profile and Moody's expectation of increasingly limited headroom under Indosat's financial covenants Moody's is reviewing the impact this may have on QtelQtel given the existence of cross default clauses linking into QtelQtel," says Martin Kohlhase, a Dubai-based Moody's Assistant Vice President. Indosat's covenants limit Debt to EBITDA to 3.5 times maximum, which Moody's estimates stood at 2.9 times on December 31, 2009.

Although QtelQtel's group liquidity profile is strong with bank balances and cash of QR 11.5 billion (ca. USD 3.2 billion) per December 31, 2009 and debt maturities in 2010 of QR 1.9 billion Moody's will review the general reliance of international operations on support from QtelQtel as well as government support assumptions for QtelQtel itself, which currently lift the ratings up by four notches from its Baa2 baseline credit assessment. The review will also encompass the intergroup support mechanisms and the standalone credit profile of QtelQtel Q.S.C. where QR 23.6 billion out of nearly QR 36 billion of group debt resides.

Ratings currently assume that QtelQtel fully extends shareholder support to Indosat in a timely manner. However, should the expected performance improvements at Indosat fail to materalise Moody's could change the ratings for QtelQtel if this were to result in a significant cash call for QtelQtel that would weaken its liquidity profile.

QtelQtel

A1 to QtelQtel's GMTN programme. The last rating action on Indosat was on March 10, 2010 when Moody's changed the outlook of the Ba1 ratings to negative from stable.

QtelQtel

QtelQtel is Qatar's incumbent integrated telecommunication services provider and has over the past years expanded into North Africa, the Middle East and Asia where it has operations in 15 markets. The company recorded revenues of QR 24 billion (USD 6.6 billion) and a net profit of circa QR

3.9 billion (USD 763 million) in 2009.

Indosat is a fully-integrated telecommunications network and services provider in Indonesia. The company is the second largest cellular operator in the country, as well as its leading provider of international call services. It also provides multi-media, data communications, and internet services.

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London
David G. Staples
Managing Director
Corporate Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

DIFC
Martin Kohlhase
Asst Vice President - Analyst
Corporate Finance Group
Moody's Middle East Ltd.
Telephone: +971-44-01-9536

© Press Release 2010