The Pakistan Credit Rating Agency Limited
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Muhammad Harris Ghaffar

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PACRA Assigns Initial Entity Ratings to Trans World Enterprise Services (Pvt.) Limited

Rating Type Entity
(30-Jun-22 )
Action Initial
Long Term BBB
Short Term A2
Outlook Stable
Rating Watch -

Trans World Enterprise Services (Private) Limited (“the Company” or “TES”) ratings reflect an emerging business profile and strapping presence in the telecommunication industry. The core function of TES is to provide reliable internet connectivity services through a scalable FTTH (fiber to the home) network, True IPTV & Voice. TES is backed by Pakistan’s TIER-1 network operator Trans World Associate Limited (“TWA”) which is the parent company and possesses exclusive & consortium ownership of the submarine fiber optic cable networks system and is the leading connectivity provider for Pakistan and Afghanistan. Numerous companies exist in the FTTH market segment where strength is primarily derived by owned and self-laid length of fiber optic cable network. The service period is also a prerequisite for geographical penetration in the market which results in capturing market share in its respective niche. Assigned ratings take comfort from TES association with its parent company TWA. Currently, TES is expanding its operations in all three major cities of Pakistan, namely Lahore, Karachi & Islamabad. The Company has successfully laid almost 4,000 Kms fiber optic and additional 2,000 Kms are in progress. The Company expects sizeable growth in revenues through (FTTH) by leveraging its enhanced area coverage for the acquisition of new customers. Currently, Company has modest losses and expects to achieve break-even during the calendar year 2022. The board of Directors of the company are overseeing the business and besides the quarterly board meetings, BoD members take monthly briefing on the financial performance and network expansion progress. The operations of the Company are augmented by a team of professionals and industry specialists. The company has implemented a robust internal control system across the organization which is complemented by top-notch IT, business insight & intelligence, and financial reporting solutions. The financial risk profile of the Company is characterized by moderate coverages and cashflows. Capital structure is leveraged; encompassed by long-term borrowings and modest equity, however, by 30 June 2022, the parent company has increased its paid-up capital by 44%. Moreover, the holding company intends to further strengthen TES’s equity through a structured mechanism.
The ratings are dependent upon improvements in revenue and profitability while retaining sufficient cashflows and coverages. However, adherence to maintaining its debt matrices at an adequate level is a precondition.

About the Entity
Trans World Enterprise Services (Private) Limited was incorporated in Pakistan as a private limited Company on 28 February 2011 under the Companies Ordinance, 1984. TES is a wholly-owned subsidiary of Trans World Associates (Private) Limited. The Board consists of two directors and both are executive directors. Mr Kamran Malik is the president of the Company and a reputable professional having vast telecom industry experience.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.