Nippon Telegraph&Telephone Corp.

The stable outlook on NTT reflects our view that the NTT group can maintain a leading position and competitiveness in domestic telecommunications by maintaining its solid customer base through price cuts supported by ample EBITDA. We expect group efforts to reduce costs, particularly fixed-line and FTTH services, to offset a decline in profitability in the mobile communications business. As a result, its consolidated EBITDA margin will likely fall, but only marginally, in our view. We expect the NTT group to maintain extremely sound financial standing in the immediate future under prudent financial management. We may consider downgrading NTT if we see a further material deterioration in the NTT group's market position and consolidated profitability. This may occur if: Competition in

... & Telephone Corp. (NTT) is likely to maintain a leading position and a strong customer base in an increasingly competitive domestic mobile communications market. It also maintains an overwhelming market position in Japan's fixed-line and FTTH markets. The NTT group has an overwhelming share of about 70% of the domestic fixed-line and FTTH markets. S&P Global Ratings expects the group to maintain strong competitiveness in the maturing FTTH business with an increase in its number of customers through wholesales services. In the domestic mobile communications market, competition is intensifying due to both government initiatives to promote competition and the planned market entry of Japan-based online marketplace operator and electronic commerce company Rakuten Inc. We think the NTT group can maintain a leading position, a solid customer base, and competitiveness in the domestic mobile communications market thanks to its high communication...

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