Nippon Telegraph&Telephone Corp.

The stable outlook on NTT reflects our view that the group's consolidated profitability will temporarily decline in fiscal 2019 due to mobile phone rate cuts and intensifying competition in its mobile communications business but will moderately recover thereafter. We believe the NTT group can sustain its leading position and competitiveness in domestic telecommunications by maintaining its solid customer base through high quality communication networks and price cuts. We also expect the NTT group to maintain its sound financial standing under disciplined financial management. We may consider downgrading NTT if competition in fixed-line and mobile communications markets continues to intensify, significantly weakening the group's market position; or if its consolidated EBITDA margin is highly likely to fall below 27% for a

... & Telephone Corp. (NTT) group is likely to maintain an overwhelming position in the domestic fixed-line and FTTH markets, as well as a leading position and strong customer base in the domestic mobile communications market, in S&P Global Ratings' view. The Nippon Telegraph & Telephone Corp. group has a share of about 70% of the domestic fixed-line and FTTH markets. We expect 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 likely to further intensify due to both government initiatives to promote competition and the full entry to the market of Rakuten Inc., the Japan-based online marketplace operator and electronic commerce company. We believe core subsidiary NTT DOCOMO Inc. (##-/Stable/A-1+) is equipped to deal with the competition. The company has ample cash flow backed by the...

Full Report