Fitch Ratings has today upgraded China Mobile (Hong Kong) Limited's ("CMHK") Long-term Foreign Currency Issuer Default Rating ("IDR") to 'A' from 'A-' (A minus). The Outlook on the rating is Stable.

Fitch's upgrade of CMHK reflects the company's solid operating performance and further improved financial profile with consistently strong positive free cash flow ("FCF") generation leading to reduced debt levels, a rising net cash position and very strong financial ratios.

Fitch, however, warns that CMHK's credit strengths could be undermined by competition in China's mobile market, which is expected to intensify given the prospect of fixed-line incumbents commencing mobile services should the Chinese government award more than two 3G licenses.

Nevertheless, Fitch does not expect the regulatory changes and increasing competition in the domestic mobile sector to materially alter CMHK's operations and weaken its overall credit profile in the near-term given its established high-end customer base, brand name, operational expertise, robust cash flows and its propensity to maintain a conservative financial profile.

By People's Daily Online