Moody's gives Kcell a Baa3 investment-grade rating, one notch above Fitch

Moody's Ratings has assigned Kcell a long-term issuer rating of Baa3 with a stable outlook, the Kazakh mobile operator's first investment-grade rating and one notch above its BB+ rating from Fitch, Kcell said in a statement published by the Kazakhstan Stock Exchange on 29 September.

The rating leans heavily on ownership. Moody's cites support from Kcell's controlling shareholder Kazakhtelecom and the operator's full integration into the group of Samruk-Kazyna, the sovereign wealth fund, and assesses the likelihood of extraordinary state support "should the need arise, as high", Kcell said in its English press release. Kazakhtelecom provides fibre infrastructure, converged products, cross-selling and financial support, including guarantees on certain debt facilities, the release says.

What holds the rating back

On the operating side, Moody's points to Kcell's position as Kazakhstan's second-largest mobile operator, its spectrum holdings, nationwide coverage, 5G leadership, improving subscriber trends and recent market share gains, the release states. The constraints are the investment programme: elevated capital expenditure tied to the 5G rollout and network modernisation, temporarily negative free cash flow and the need to monetise recent investment. The agency expects free cash flow to turn positive and credit metrics to improve over the next one to two years as capital spending moderates, the release says.

Moody's assesses Kcell's liquidity as sufficient to cover its debt obligations, capital expenditure and operating needs over the next 12 to 18 months, and the stable outlook reflects an expectation that EBITDA will improve gradually as investment slows, Kcell said in its statement. Kcell's release summarises the agency's view; Moody's own rationale is not attached to the filing.

The numbers behind it

Kcell's revenue rose 10.8 per cent year on year to KZT 138.4 billion in the first half of 2026, EBITDA rose 13 per cent to KZT 53.8 billion for a margin of 38.9 per cent, and net profit increased 40.5 per cent to KZT 7.9 billion, the release says. Capital expenditure exceeded KZT 32 billion in the half. The subscriber base grew 11.2 per cent to 9.05 million.

The company put more than 650 base stations into service in the first half, over half of them 5G-capable, taking its 5G base station count to 3,034, the company said in its release. It reports population coverage of 91.37 per cent for 4G and 64.29 per cent for 5G, figures that are the company's own and not those of the regulator.

Chief financial officer Sabigat Rakhmetov said in the release that the company works with Halyk Bank, Bank of China Kazakhstan and Nurbank as well as the Development Bank of Kazakhstan and the Eurasian Development Bank, and is "highly active across the KASE and AIX capital markets". He said the rating "significantly broadens Kcell's capabilities in the financial markets". The release does not say whether the company plans a bond issue or a refinancing on the back of it.

Fitch first rated Kcell BB in 2017 and upgraded it to BB+ in 2020, the release says. The split leaves Kcell investment grade at one agency and one notch below it at the other. Kcell is the only mobile operator in the Samruk-Kazyna portfolio, chief executive Askar Zhambakin said in the statement, adding: "We are currently executing a large-scale network and 5G infrastructure development program."

Governance changes at the parent are also under way. Kazakhtelecom called an extraordinary general meeting for 7 October with a single item on changing the composition of its board of directors, according to a KASE notice of 2 September. The notice does not name the directors involved, and Moody's view of Kcell, as summarised by the company, rests on the strategic relationship with Kazakhtelecom continuing.