S&P Global Ratings has revised the outlook on state-backed Bahrain Telecommunication Co. (Batelco) to “stable” from “negative” in view of improved economic prospects in the Gulf state.

The ratings agency also affirmed its “B+/B” long- and short-term issuer credit ratings on the company, whose 77 percent stake is owned by the government.

The revision follows a ratings action on Bahrain on November 26, when S&P said the country’s outlook had been revised to 'stable' from 'negative' on the back of new fiscal reforms that seek to boost non-oil revenues.

“The stable outlook mirrors that on Bahrain, with any upside for Batelco dependent on a stronger sovereign rating,” the rating agency said.

“Our rating on Bahrain drives our long-term rating on Batelco because we view Batelco as a government-related entity, with a very strong link with the government.”

The Gulf state has recently announced plans to spend more than $30 billion in various strategic projects, create 20,000 jobs for its citizens and increase the value-added tax (VAT) to 10 percent.

According to S&P, the reforms are expected to improve the sovereign’s fiscal position.

zawya