The ratings on Telekom Austria AG reflect Standard&Poor's Ratings Services' view of the group's "satisfactory" business risk profile and "intermediate" financial risk profile. Telekom Austria's business risk profile is supported, in our view, by its sustainable leading market positions in the Republic of Austria (AA+/Negative/A-1+). Furthermore, the group's international mobile operations help diversify its revenue base and generate meaningful profit margins. These factors are tempered by the saturation of, and fierce competition in, Austria's declining telecommunications services market, in our opinion. We also consider that the group's international mobile operations continue to face meaningful competitive and regulatory pressures and significant country risks, notably in Belarus. We also note that Telekom Austria has a rigid cost structure because of
