MILAN: Ratings agency Standard & Poor's said on Thursday it cut Italian telephone company Telecom Italia's long-term credit rating to BBB- from BBB, with a stable outlook.
"The downgrade follows our downward revision of the group's business risk profile and reflects our view that Telecom Italia's debt leverage, although likely to subside somewhat, will remain too high to sustain the 'BBB' rating level, given the lower business risk profile assessment," the agency said in a statement.
The group, which has a debt pile of around 28 billion euros, will continue to face very challenging conditions in its domestic telecom market in 2013-2014, Standard & Poor's said.
Its liquidity is adequate, the ratings agency said, adding that Telecom's revenue will fall by about 3 percent in 2013 and 2 percent in 2014.
Telecom Italia's board meets on Thursday to mull the spin-off of its fixed line network in a move that could cut debt and free up capital for new investment.
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