TEXT-S&P: NTT's US$750 Million Notes Rated 'AA'
(The following was released by the rating agency)
TOKYO (Standard & Poor's) July 12, 2012--Standard & Poor's Ratings Services today assigned its 'AA' rating to Japan-based telecommunications company Nippon Telegraph & Telephone Corp.'s (NTT; AA/Stable/A-1+) US$750 million 1.4% notes due July 18, 2017.
The ratings on NTT reflect its established leading position in Japan's fixed-line, mobile communications, and broadband markets and its strong earnings and profitability in its mobile business, which has an almost 50% share of the mobile communications market. Also, in Japan's broadband business, NTT is by far the largest fiber-to-the-home (FTTH) service provider. We also factor into the ratings an increase in contributions that its system integration (SI) business has made to the company's total earnings and which we expect to continue; another factor is its minimal financial risk profile, backed by strong cash flow. At the same time, constraints on the ratings include a possible slowdown in the pace of improvement in earnings from FTTH services, depending on changes in regulations and the competitive environment, and intensifying competition in the mobile communications market.
RELATED CRITERIA AND RESEARCH
General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
2008 Corporate Criteria: Analytical Methodology, April 15, 2008