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The affirmation of Silknet JSC’s ratings reflects its stable market position as a strong number two telecoms operator in Georgia, low leverage and positive free cash flow (FCF) generation. They also reflect longer-term 5G strategic uncertainty in a less stable macroeconomic environment. The company’s small absolute size and high FX exposure is a weakness, while a record of related-party transactions entails higher credit risk than suggested by the company’s comfortable operating and financial profile. Entrenched Market Positions: We expect Silknet to broadly sustain its competitive positions in a highly consolidated but also relatively small market of 5.7 million mobile and 1.1 million internet retail customers. Georgia is predominantly serviced by two large operators, Magticom and Silknet, with the third largest, Celffie, far behind, and other smaller players holding just a fraction of the market. Silknet’s revenue market shares were 36% in mobile and 34% in fixed-line broadband segments in 3Q24.