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Moody's lifts Net Servicos to B1
Moody's Investors Service said it upgraded Net Servicos de Comunicacão SA's global local currency corporate family rating to B1 from B3 reflecting the better-than-expected growth in Net's pay-TV and broadband subscriber base, reduced foreign exchange exposure, improved operating and financial performance, as well as its enhanced liquidity position following the successful issuance of new debentures in September 2005.
The outlook is stable.
The B1 global local currency corporate family rating continues to be supported by Net's position as Brazil's largest pay-TV company. Net has a 37% market share nationwide and operates in an attractive area that includes six of the country's main metropolitan cities with favorable consumer demographics. Net's rating is further supported by its growing broadband and digital TV businesses, as well as the new voice service it offers with shareholder, Embratel, the agency said.
At the same time, Net's B1 rating continues to reflect the very cyclical nature of the cable TV business. Growth prospects for Net's pay-TV business are particularly limited in Brazil, where disposable income levels are low and open-air TV is dominant, with a 91% share of viewers.
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