Fitch assigns 'A+' ratings to Tulip Telecom

Ratings agency Fitch had assigned a low default risk to Tulip Telecom with a stable outlook on the back of the company's extensive network coverage in India.

"Fitch Ratings has assigned India's Tulip Telecom Limited a National Long-Term rating of 'A+(ind)'. The outlook is stable," the ratings agency said in a statement.

An 'A' rating denotes expectations of low default risk relative to other issuers or obligations in the same country.

"The ratings reflect Tulip's extensive network coverage within India... The ratings also reflect the company's leadership position in the multi-protocol label switching virtual private network (MPLS VPN) segment," Fitch said.

Tulip's 9,000-km fibre network covers over 300 cities across the country.

"Fitch expects Tulip's upcoming data centre facility in Bengaluru to drive revenue and profit growth in the medium-term as it has already won contracts with revenue potential of Rs 585 crore over the next five years," Fitch said.

The agency added that it has also factored in Tulip's "strong financial performance" in 2010-11 and the first quarter of 2011-12.

Tulip's revenue jumped to Rs 2,350 crore in 2010-11, a growth of 19.6 per cent over the previous fiscal. During the first quarter of the current fiscal, its revenue went up by 24.5% to Rs 6,500 crore.

Established in 1992, Tulip is an end-to-end data connectivity services provider. It provides data services, IT infrastructure and network solutions to enterprise clients and the government.