DUBAI, (Reuters) – Ratings agency Moody’s has placed Qatar Telecommunications Co (Qtel) on review for a possible downgrade citing weak financial performance at its Indonesian unit.

A potential downgrade may impact $1.5 billion of the telecom operator’s debt, Moody’s said on Wednesday. Qtel’s Indonesian unit, PT Indosat Tbk, posted an 88 percent drop in its fourth-quarter net profit on Monday, as competition heated up and as the number of its subscribers fell by 9.3 percent last year.

Moody’s downgraded its outlook on Indosat, Indonesia’s second-largest mobile phone operator, to negative from stable on Wednesday.

“Following the change in outlook for Indosat in light of a weaker financial profile and Moody’s expectation of increasingly limited headroom under Indosat’s financial covenants, Moody’s is reviewing the impact this may have on Qtel,” said Martin Kohlhase, a Dubai-based Moody’s assistant vice president.

Qtel in 2008 bought a 40.8 percent stake in Indosat, later raising its holding to 65 percent, in a bid to tap growth potential in the world’s most populous Muslim country.

Qtel, which operates in 17 countries, has expanded rapidly abroad to mitigate the loss of its monopoly after Britain’s Vodafone entered the Qatari market. Its focus has been on acquisitions in the Middle East and North Africa region, the Indian subcontinent as well as south east Asia.

Qatar-listed Qtel reported a 7.9 percent decline in fourth-quarter profit earlier this week.

Qtel shares closed down 1.3 percent on the Qatari bourse Wednesday.