NRA has assigned credit rating ''A'' to OLO DEL PERU SAC

August 1, 2013

The company OLO del Peru (the former name - Yota del Peru) was established in 2010 in the city of Lima, the capital of Peru, as a subsidiary of the Group Yota with the purpose of developing the broadband Internet access in major cities of the country.

In 2011, a group of investors on an equal footing became the largest shareholders of the Peruvian company Yota del Peru. As a result of this transaction, the Group Yota completely withdrew from the shareholders of this project. The Company was renamed into OLO del Peru («OLO»).

OLO del Peru is the only company in Peru, which has the concession for the provision of wireless broadband access to the Internet in the range of 2.5 MHz  with the channel width 22 MHz throughout the country and 78 MHz in the region of Lima. The concession for the use of frequencies is technically neutral, which allows to further perform the migration of the network to a promising LTE standard. According to the Concession Agreement, OLO is present in the most economically developed regions of the country (17 provinces) and covers almost 50% of the total population.

The commercial launch of the network in Peru was held September 7, 2012 under the brand name of «OLO». By the end of 2012, 273 base stations were put into operation covering the four largest cities in the country, including the capital – the city of Lima, in which 31% of the population lives. In 2013, there are plans to further expand the network in the provinces.

Operational management of the project is commissioned to the Group Multinet, which has a long history of interaction with a group of new investors of the Company's as well as the experience in emerging markets. The core of the team of Multinet Group includes experts who have experience in the key positions in the largest telecommunications companies in Russia.

The Agency has been provided with a business plan and cash flow forecast of the Company, according to which it is planned that revenue in 2013 will amount to more than 22.7 million U.S. dollars, and this figure will double by the end of 2014. The number of subscribers as per the results of 2013 should be more than 101 thousand people (according to the results of 2012 – 13 million people), and up to 2014 this figure will be more than 177 thousand people. In order to finance its current activities, the Company raises foreign debt financing. In line with available forecasts of free cash flow, a conclusion can be made that the Company will earn enough money to repay the principal debt on the loan as well as the interest payments.

"The factors that are having a positive impact on the credit rating of the Company include powerful shareholders and a high degree of support, a positive trend of operational and financial performance indicators as per the results of the reporting periods, the professional staff  having a very considerable experience in the telecommunications industry, as well as experience in implementing similar projects, good market presence prospects and the availability of a clear development strategy.

At the same time, the Agency emphasizes that the business of the Company is still found in its development stage and requires significant investments; thus, the Agency can not evaluate the success of the implementation of the announced business plan with a sufficient degree of probability. The Company does not enjoy a long history of activity and at the current time the Company is in a fairly high degree of dependence on related parties in terms of operational support and funding. The Agency will be monitoring the key operational and financial performance indicators of the Company and their compliance with the stated projections, which will have a decisive impact on the keeping up of the current credit rating level", - observes Tatiana Kovaleva, a senior analyst at the National Rating Agency.

Corporate website: https://olo.com.pe/

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