Nippon Telegraph & Telephone Corp has proven one of the world’s unhappiest privatisations, with the Japanese government’s approach of setting a price by auctioning a third of the issue, so that the price is set by only the most enthusiastic holders, leading to rotten share price performance and disappointed investors; its financial performance since privatisation has been pedestrian, and now Standard & Poor’s Corp says it has revised its rating outlook on the company to negative from stable. It affirmed its triple-A long-term and A-1 plus short-term ratings on the company, affecting about $14,000m of debt, but says the outlook revision reflects the fact that continued weak earnings will put pressure on its ability to fund capital expenditures and other spending internally – its operating profit is falling due to price competition with, and loss of market share to, the other carriers; Its earnings were expected to be supported by increases in monthly charges and directory inquiries fees, but approval for these rises has been delayed by a recent government decision to postpone increases in such fees, the agency said.
