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 market, controlling 83% of the local call market, 65% of the intra-prefecture long-distance market, and 50% of the inter-prefecture market. However, the company is facing a decline in the number of subscribers to its voice communications services, amid a shift in demand to data communications services, and to mobile from fixed-line services. To ease these pressures, NTT has
