The ratings on Nippon Telegraph&Telephone Corp. (NTT) reflect the consolidated business and financial strength of the NTT group of companies. The ratings also take into account uncertainties stemming from the group's expansion strategy and the deregulation of the telecommunications industry in Japan. NTT has a very strong position in Japan's telecommunications market, controlling more than 90% of the local call market and 50% of the long-distance market. Its majority-owned wireless telephone subsidiary, NTT DoCoMo Inc. (AA/Negative/A-1+), accounts for nearly 60% of cellular subscribers in Japan. NTT's financial performance is strong. Its operating margin before depreciation is around 30% and its cash flow is stable. Funds from operations covered close to 60% of the company's net debt in fiscal
