Following an upgrade by S&P in July 2010

Qatar Telecom Q.S.C (“Qtel” or “the Company” or “The Group”) announces that Moody’s Investor Service (“Moody’s”) following its review has reduced its A1 rating for Qtel, Qtel International Finance Limited, a wholly owned subsidiary of Qtel, to A2 and its A1 rating for the bonds issued under Qtel’s GMTN programme to A2. Moody’s Outlook for Qtel is stable.
On the other hand Qtel is pleased that in July 2010, Qtel’s corporate credit ratings by Standard & Poor’s Ratings Services (”S&P”) were increased from “A-” long term to “A”  and from “A-2” short term to “A-1”. The upward revision followed S&P’s upgrade of the sovereign ratings on the State of Qatar.
Fitch Ratings reassigned an issuer default rating of “A+” in early 2010.
Qtel expects no material impact from the Moody’s rating change as the solid company performance has been acknowledged by the rating agency.

The one notch downgrade mainly results from Moody’s change in assumptions and methodology regarding government support in line with other Government Related Issuers.  This follows similar rating actions for other GRIs in the GCC region after the debt restructuring announcement of Dubai Holding in late 2009. Moody’s considers government support of Qtel to still be high but Qtel does not benefit from an explicit guarantee of the Qatari Government or a special legal status.  However, Moody’s continues to assume government support to be high and underpinned by interventionist government policies in support of the economy and a track record of government bail-outs, in recent years most visible for the local banking system.  More specifically, Qtel benefits from a high direct and indirect Qatari Government ownership level (68%) that has been maintained through the participation in the past rights issues, government board representation and the existence of a golden share. 
Moody’s also affirmed the Baseline Credit Assessment (BCA) and notes an improved operating performance, a high cash level and a strengthened financial profile within the board’s guidance.