BAKU, Azerbaijan, September 29. Moody’s Ratings
has assigned Kcell JSC a first-time Baa3 long-term issuer rating
with a stable outlook today, while its Baseline Credit Assessment
(BCA) was set at ba2, Moody’s announced.


The Baa3 rating incorporates Kcell’s ba2 BCA, as well as Moody’s
assumption of high default dependence and strong extraordinary
support from the Government of Kazakhstan, which ultimately
controls the company through Kazakhtelecom and Sovereign Wealth
Fund Samruk-Kazyna.


“The Baa3 issuer rating reflects Kcell's strong competitive
position as Kazakhstan's second-largest mobile telecommunications
operator,” the ratings agency said.


According to Moody’s, Kcell’s position is supported by its
nationwide network coverage, high-quality spectrum holdings,
leadership in 5G, improving subscriber trends and recent market
share gains.


The agency expects Kcell to start generating positive free cash
flow and improve its credit metrics over the next one to two years
as capital expenditure moderates and recent network investments
increasingly support revenue and EBITDA growth.


Moody’s also pointed to Kcell’s close strategic relationship
with Kazakhtelecom, including access to fiber infrastructure,
converged products, customer cross-selling opportunities and
financial support through guarantees on certain debt
facilities.


The rating is constrained by Kcell’s concentration in
Kazakhstan, elevated capital expenditure related to the 5G rollout
and network modernization, as well as uncertainty over the
company’s ability to monetize recent network investments through
sustained tariff and average revenue per user growth while
maintaining subscriber numbers and market share.







The ratings agency expects a high likelihood of extraordinary
government support if needed, citing Kcell’s importance to
Kazakhstan’s digitalization objectives, national telecommunications
infrastructure and government connectivity programs. Moody’s noted
that this assessment is also supported by the state’s ownership and
oversight through Samruk-Kazyna and a track record of support,
including 70 billion Kazakh tenge in direct funding.


Moody’s assigned Kcell a G-3 Issuer Profile Score, with
governance risks primarily linked to its integration within the
Kazakhtelecom group, large-scale investment program and ultimate
government ownership. These risks are partly mitigated by Kcell’s
public listing and independent directors on its board.


The agency noted that as of June 2026, the company held KZT2.1
billion ($4.4 million) of cash and KZT6.8 billion ($14.2 million)
of short-term treasury bills, together with KZT38.5 billion ($80.5
million) of available committed bank facilities.


"These liquidity sources are sufficient to cover debt
maturities, capital spending requirements and operating needs over
the next 12-18 months. We expect the company to continue drawing
committed facilities to fund the final phase of its 5G investment
programme before free cash flow gradually turns positive during
2027", Moody’s said.


Today, Moody’s has also affirmed the Government of Kazakhstan’s
local and foreign currency long-term issuer ratings at Baa1, with a
stable outlook. The agency also affirmed the foreign currency
senior unsecured debt and MTN programme ratings at Baa1 and
(P)Baa1, respectively.


Kcell is one of Kazakhstan’s largest mobile telecommunications
operators, providing mobile communication, high-speed internet and
digital services.