���������ֳ�

Silknet JSC's ratings reflect its stable market position as a strong number two telecoms operator, low leverage that no longer constrains the rating and improved free cash flow (FCF) generation supported by the positive macroeconomic developments and outlook in Georgia. However, 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. Key Rating Drivers Stable Market Positions: We expect Silknet to broadly sustain its strong market positions as the second-largest telecoms operator in Georgia. The overall market is likely to remain stable as Cellfie, the smaller third-largest operator, has been losing its market share despite far more aggressive pricing than the two leading operators. Silknet's revenue market shares were 35% in mobile and 37% in fixed-line broadband in 2Q23. Slower Growth Likely: We believe the company is likely to maintain strong profitability, with EBITDA margins above 50%, even if it is facing slower growth in a lower inflation environment. Strong double-digit revenue growth in 2022-2023 was to a large extent driven by multiple price increases. Tariff revisions are less likely in a more stable macroeconomic environment.