The Pakistan Credit Rating Agency Limited
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Sohail Ahmed Qureshi

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PACRA Maintains Entity Ratings of Trans World Associates (Pvt.) Limited

Rating Type Entity
(01-Sep-23 )
(02-Sep-22 )
Action Maintain Initial
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Trans World Associates (Pvt.) Limited (“the Company” or “TWA”) is principally engaged in establishing, maintaining and operating a private fiber optic submarine cable system, and landing station and provide telecommunication services under the license issued by the Pakistan Telecommunication Authority (PTA). The Company is a subsidiary of Orastar Limited, who increased its shareholding to 90% during January 2022 after the purchase of 51% shareholding from Orascom Investment Holding. Primarily, there are only two companies in Pakistan having direct access to the submarine fiber optic cable network, PTCL and TWA. TWA is the only private telecom Tier-I operator (which is backed by owned and self- laid submarine cable network) in Pakistan which owns a 1,300 KM submarine cable system TW1and they are also a consortium member of the 20,000 KM fiber optic cable system SEA-ME-WE 5 with branch landing in Karachi. All internet traffic in Pakistan largely comes through PTCL and TWA. TWA has built its reputation by providing reliable backhaul connectivity services to Pakistan’s leading ISPs and telecom operators. During CY22, the topline clocked in at ~PKR 8,744mln, reflecting a growth of ~32.4%. The company’s revenue which are invoiced in USD, have contributed to the steady growth of its topline growth. This growth is also attributed to the increased utilization of bandwidth. Pakistan Telecommunication Authority (PTA) latest data related to internet maximum utilization revealed that, in April-23 Pakistan witnessed a remarkable surge in internet usage, reaching a peak utilization of approximately 4.8 Terabits per second (Tbps), compared to the previous year's April figure of around 3.8Tbps. The elevated trend of online media streaming can be attributed to the increased usage of the internet. The board of TWA is more of an advisory nature as all members are well-experienced and possess technical expertise along with strapping industry- specific experience. BoD members take monthly briefings on the financial performance and 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. IPT (Internet Protocol Transit) lease is TWA’s prime product and the core strength of the Company lies in its after-sales support and quality service assurance. The Company is achieving diversification through their wholly owned subsidiary TES by providing (FTTH) and integrating vertically close-to-end consumers. TWA is also a consortium member in SEA-ME-WE 6 (under construction) which is set forth for sustainable future growth. It’s anticipated that the project will reach its completion by the end of CY25.The Company’s financial risk profile is considered adequate with comfortable coverages, cashflows and working capital cycle. Capital structure is moderately leveraged where borrowings are mainly comprised of long-term borrowings to support network and capacity expansion.
The ratings are dependent upon sustainability in Company’s revenue, margins, profitability and vigorous financial matrix. As the capital structure becomes leveraged, maintenance of sound financial discipline is imperative to hold.

About the Entity
TWA incorporated in Pakistan as a Pvt. ltd Company on October 01, 1980. Board consists of 7 directors which include 5 non-executive and 2 executive directors. Mr. Junaid Iqbal is the CEO while Mr. Saad Muzaffar Waraich is the President of the Company, both having a strong telecom industry profile.

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.