A strong position in both the fixed-line and mobile telecommunications markets in Japan. Stable cash flow, despite deteriorating profitability in the fixed-line business. Ongoing cost reductions and a prudent investment policy, following losses on overseas investments in the past. A likely further decline in fixed-line service volume. A relatively weak capital structure in an otherwise strong financial profile. The rating on Nippon Telegraph&Telephone Corp. (NTT) reflects the NTT group's strong operating base in both the fixed-line and mobile markets and its ability to maintain stable cash flow despite deteriorating profitability in its traditional local fixed-line business. The rating also takes into account valuation losses on foreign investments by group companies. NTT maintains a dominant position in Japan's fixed-line
