Fitch cut its credit rating on
Friday amid concerns about a "deterioration" of Cingular's business.
The international ratings agency reduced its rating on the company's senior unsecured long-term debt to A- from A. It also cut the company's short-term commercial paper rating to F2 from F1. The ratings outlook remains negative, Fitch said.
Cingular Wireless is the country's second-largest wireless carrier and is a privately held joint venture co-owned by
Cingular lost subscribers in the third and fourth quarters of last year, as its competitors began showing glimmers of a rebound. Last year it saw its operating cash flow slip 3% to $4.3 billion. Capital spending also jumped 16%, as the company raced to upgrade its national wireless network to GSM standards.
"The rating outlook remains negative based on the recent trends in operating performance, technology platform concerns and competitive issues," Fitch said. "If Cingular is not successful in stabilizing operational results and continued deterioration occurs in operating performance during 2003, a further downgrade is likely."
Shares of BellSouth rallied a day after Baby Bell shares took a hit from Thursday's mixed FCC decision on new telephone competition policies. BellSouth stock closed the day up 90 cents, or 4.4%, at $21.50. SBC shares dropped 58 cents, or 2.7%, to $20.73.