Leading positions in the Austrian telecom market. Profitable international mobile operations. Solid free cash flow generation. Transparent and conservative financial policy. Fierce competition and regulatory pressure in the saturated Austrian telecom market. Expectations of declining profitability, in part due to rigid cost structure in Austria. Material emerging market exposure. The ratings on Telekom Austria AG reflect our view of the group's sustainable leading market positions in Austria. Furthermore, despite the near-term economic challenges, we believe Telekom Austria's profitable international mobile operations help diversify its revenue base and mitigate domestic pressure. We expect the mobile operations to keep generating meaningful, albeit somewhat declining, profit margins, which we consider likely to support the group's so far solid consolidated free cash flow (FOCF)
