Rating agency Standard and Poor's (S&P) has given Esat Telecom an improved rating following its acquisition by British Telecommunications. As a subsidiary of BT, all of the Esat ratings had been equalised with those of BT, the agency said.

Esat's ratings have been put on CreditWatch with negative implications in line with the BT ratings, pending a full ratings review.

S&P is currently reviewing the ratings of both companies and expects to complete this review within the next two months.

In the meantime, it has upgraded its single B+ long-term corporate credit and senior unsecured ratings in Esat Telecom to AA+. In its reviews, S&P said it would focus on BT's domestic and international strategy, its acquisition and funding policies and on the size and quality of its forecast earnings and free cash-flows. The agency said a key element in the review would be an assessment of BT's internal credit protection targets, given its aggressive expansion strategy and the competitive pressures it faced.