The operations will position it well to absorb the evolving competitive pressures in the domestic cellular market, the rating agency said in a statement issued from Hong Kong.

The rating was upgraded toBa1 from Ba2 with a positive outlook.

The positive outlook reflects Moody's expectation that DTAC will execute its business growth plan in a conservative manner, and such planned growth will potentially further strengthen its subscriber base and operating cash flow," the ratings agency stated.

"Moody's also believes DTAC will benefit from Telenor's presence as a strategic shareholder, its technical and operational expertise and management guidance.

"However, these strengths are tempered by the increasingly competitive nature, as penetration rises, of the cellular market in Thailand, the potential for more aggressive pricing strategy by key competitors, and DTAC's large capex plan, including negative free cash flow in the coming year.

"Low dependence reflects the fact that DTAC is predominately operating in Thailand and contributes moderately to the EBITDA [earnings before interest, tax,depreciation and amortisation] of Telenor, which itself has a relatively diversified income stream.

"Low support reflects Moody's belief that Telenor has the flexibility to divest its stake in DTAC if political or regulatory issues seriously affect its investment. At the same time, Moody's has considered DTAC's strategic fit with Telenor and the higher level of economic exposure to 69.3 per cent from 40.3 per cent," the ratings agency said.