Etisalat Etisalat is one of the most well known telecom companies of the United Arab Emirates.

Operating in more than 18 countries the company has crossed the 140 million subscriber base in 2011, and has healthy revenues USD 8.4 billion in January, 2010. The 18 countries are spread across the Asia, Middle East and Africa with a market cap exceeding AED 80 billion and is the second highest credit rated Telecommunications Company globally on the Fitch scale and ranked fourth on the S&P list. It is the pioneer in the launch of 4G commercial services on the nation-wide spread LTE network promising to deliver high speed data connectivity to its customers. It aspires to be among the top 10 leading cellular service providers across the world. The company invested in Thuraya Telecom, the leading international satellite mobile service provider, expanding the reach of the companys network across the entire planet. The vision of the company is A world where peoples reach is not limited by matter or distance, making the people stay connected wherver they are on the planet and nourish the telecom services with new technologies to generate opportunities across the globe. The mission of the company is To extend peoples reach nourished by the values of Energy, Openeness and Enablement. The International investments of the company include:

Thuraya Excelcomindo (XL) Indonesia Canar, Sudan Etisalat Nigeria (EMTS) PTCL , Pakistan Etisalat Misr (Egypt) Zantel, Tanzania Etisalat Afghanistan

technologia - Etisalat Software Solutions Private Limited (ESSPL) Atlantique Telecom (AT) Millicom Sri Lanka TIGO Etihad Etisalat Mobily Saudi Arabia Etisalat DB Telecom India PVT LTD.

Etisalat is highly responsive to the costomer needs that is visible in the the satisfaction of its customers. The PEST analysis of the comapny yielded the following results: Political: the company follows business ethics and complies to all legalities in their operations. The end result has been thatpolitically it has been helipful to the society. Econmic: the continuous growth rate in the recent years while maiantaining econmic stability in serving and exapanding the opeartions. Socioal: Valuing the idess and opinions of the employees no matter waht their nationality is the reason for the suiccess story of Etisalat. They treat all the workforce on equal terms and no discrimination whatsoever. Technology: the introduction of new technologies as they arrive including the launch of 4G is the strength of Etisalat. The comapny has a just utilisation of its network resources making it successful. Credit Analysis The five Cs of credit analysis include:

Capacity Capital Collateral Character Conditions

Capacity:

The company has a net cash flow of AED 3.9 billion in 2010 with AED 6.4 billion in borrowings and AED 10.3 billion in cash. Thus the company has a strong cash flow position and hence a loan of AED 10 million can be granted to Etisalat.

Capital:

Capital spent by Etisalat during the year 2010 was AED 5.8 billion with the revenues increasing by 2% to amount to AED 31.9 billion.

Collateral:

The company has strong credit risk management policy of taking optimum collaterals when lending out money to mitigate the risks when defaults are encountered. In 2009 the amount of collateral received was AED 295 million.

Character:

The company has seen growth in the number of aggregate subscribers and revenue in the year 2010, which is equally supported by its international operations. The top end results for the year comprise of about 23% operations internationally. The UAE operations have witnessed a slight decline because of market saturation within, but their strategic investment schemes have benefitted their international expansion plans. Etisalats associate company, Mobily, has been key to their success and with their careful and sustained policies marked by sound judgement, the company expects resources, further adding to the reputation in market, opening opportunities for

handsome acquisitions that may develop. It is important to note that Etisalat has significant assets such as Etisalat Academy, technological expertise and their own Smart Hub which would not only allow them to indulge in acquisitions but also would help synergise, hence bring into effect substantial value addition. Thus, the company enjoys stability and at the same time is exploring numerous opportunities of growth internationally which ensures good reputation and prospects since UAE market is reaching saturation.

http://etisalat.ae/index.jsp?lang=en&type=content&currentid=6d88e15c0b56a010VgnV CM1000000a0a0a0a____&contentid=f365903507b4e210VgnVCM1000000c24a8c0RC RD&parentid=ed38800d1f52a010VgnVCM1000000a0a0a0a____

Conditions:

The company has been operating in UAE for quite some time and has found revenues stagnant. Thus the strategy of company to indulge in overseas business involving international operations is helpful in expansion. The company maintains a healthy balance sheet inspite of the global meltdown which is reflected greatly in its investment grade credit rating. The cash position is further strong which gives it strong short term liquidity that is viable in pursuit of expansion.

http://www.etisalat.ae/assets/docs/financial/2010/flash/chairman.html

Thus, the credit rating analysis for the company is positive and hence, it is favourable to grant a 10 million AED loan to the company. Given its condition, where it is looking to expand and increase its global presence, global investors are definitely required by the company. The overall revenues have been increasing because of international operations, hence the company is likely to grow, which is good news for any investor. The strong credit risk management policy followed by the company ensures safety of invested money. Further, in November 2010 the
company introduced Global Medium Term Note (GMTN) and Sukuk programmes to appease investors that simplifies the management of its profile of debt maturity and provides for greater diversity as far as funding is concerned. The strategic might in terms of capital and technological expertise is also significant to its reputation and forms a formidable part of its strategic asset.