Stock Research and Analysis

by Ross MacMillan

Bulls Say

NTT owns 66.7% of DoCoMo, Japan's largest wireless telecom firm, a business that we think is well positioned. DoCoMo has growing data ARPU, low churn, a high dividend relative to government debt, and a net cash position.
The firm has a solid balance sheet and is generating over JPY 500 billion annually in free cash flow, which it is using to increase its dividend, pay down debt, make acquisitions, and buy back stock.
As the fibre network rollout slows NTT should be able to reduce capital intensity and boost cashflows Read more 

Bears Say

NTT's return on invested capital leaves a lot to be desired, as rates are low, especially for an incumbent fixed-line telecom operator.
In 2010, KDDI acquired control of J:COM, the largest cable television operator in Japan, and has since merged its ownership with Sumitomo into a JV, which allows it to offer a quadruple play of services: fixed and wireless telephony, broadband, and television.
DoCoMo has been slowly losing wireless market share as Softbank and KDDI grow faster thanks to the iPhone. Even though DoCoMo now offers the iPhone, we think this trend will continue. Read more 

Management

We rate NTT's stewardship as Standard. NTT's management team has been with the firm for decades. Satoshi Miura started in 1967 and moved from CEO to chairman. The new CEO is Hiroo Unoura, who started in 1973 and was most recently executive vice president   Read more 

Profile

NTT owns 66.7% of the separately listed NTT DoCoMo, the largest wireless operator in Japan with 63 million subscribers. This stake accounts for about two thirds of its market   Read more 

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