TOKYO (Reuters) - Shares in Japan’s big telcos jumped on Tuesday after market leader NTT Docomo announced smaller-than-feared price cuts, alleviating concerns about a profit-dampening price war.
NTT Docomo shares were up 3.5 percent in early Tokyo trading, with KDDI Corp up 5.6 percent and SoftBank Corp up 2.7 percent.
Japan’s big three telcos are under government pressure to reduce carrier fees to help stimulate consumer spending in other parts of the economy. The market entry of Rakuten in October is also likely to increase price pressure.
After market close on Monday, NTT Docomo said it would cut carrier fees by as much as 40 percent. Many of its users will not see reductions of that scale and the new price plans, widely seen as complex, do not include handset fees.
“We don’t see a large negative impact on (NTT Docomo’s) earnings and see a low probability of other companies responding with large price cuts,” SMBC Nikko analyst Satoru Kikuchi wrote in a note.
Despite the jump, shares in SoftBank Corp, which listed in December, continue to trade below their IPO price.
By contrast, shares in parent SoftBank Group Corp, which were up 1.9 percent on Tuesday morning, have in recent days been trading at a 19-year high following a share buyback and with growing expectations for the value of its investments in tech firms like Uber Techologies [IPO-UBER.N], which is due to list.
Reporting by Sam Nussey; Editing by Christopher Cushing