NTT reported before close today and despite strong Q4 figures, the shares were down 3% on a weak FY24 guidance. Despite a strong Q4 which was well flagged last quarter, the mobile ARPU trend is disappointing; perhaps as DCM is starting to lose higher end customers to SoftBank’s integrated plan. Our brief takeaways below.
Softbank delivered a strong beat on EBITDA and net profit this quarter, with mobile accelerating as the benefits of financial integration into mobile plans continued to flow through. Guidance was mixed however, impacted by the ¥150bn investments going into generative AI. As a result, compared to a scenario without these investments, the guided EBIT was lower by ¥30bn/year for FY24 and FY25, but in line with previous figures.
LY delivered yet another strong EBITDA beat, ahead of consensus by 16%. Against consensus expectations, FY24 guidance was in line for revenue while ahead on EBITDA. Encouragingly, the company has also laid out a bullish EPS target of more than ¥20 for FY25 (vs. ¥18.7 previously) which reflects the company’s focus on efficiency and profitability, and would be positive if the company can achieve it.
PLANO, Texas--(BUSINESS WIRE)-- , a digital business and IT services leader, has developed a Sustainable Device-as-a-Service solution in collaboration with HP that embraces sustainability and the circular economy in end-to-end device lifecycle management. The solution enables organizations to embed and operationalize sustainability into the lifecycle of endpoint devices. It is part of NTT DATA’s holistic approach to help organizations accelerate their end-to-end sustainability transformation journey to Net Zero targets and beyond. NTT DATA’s Sustainable Device-as-a-Service, integrating HP Ma...
Rakuten has seen stronger customer growth recently. In this note, we analyse whether Rakuten is on track to hit its target 8-10m customers and ¥2,500-3,000 ARPU by year end, and what this means for Rakuten’s target EBITDA breakeven by Dec 2024.
We ran our Asia Telco tour last week. This time we met 12 companies in 3 countries (Korea, Japan, Thailand). Telco share prices in all 3 of these countries have been pretty strong recently as telcos continue to benefit from generally positive themes: growth, return on capital and shareholder remuneration are all typically improving.
PLANO, Texas--(BUSINESS WIRE)-- , a global digital business and IT services leader, announced a collaboration with Stonebranch, a leading provider of workload automation and job scheduling solutions, to revolutionize replatforming of mainframe workloads to the public cloud. This strategic partnership aims to support flexible hybrid work strategies and continuous modernization for enterprises seeking to transform their core business processes. Stonebranch Universal Automation Center (UAC) offers native support for UniKix by NTT DATA, their mainframe-rehosting software suite, to modernize the ...
We met with all 3 of the incumbent Japanese Telcos & Rakuten in Tokyo this week. Every time we visit we are reminded of how much better the telco industry is in Japan vs other DMs and we continue to be of the view that Japanese incumbents are in a “Golden Age”; ARPU inflection is being held back a little we think by voice weakness post-Covid but is likely to come through over time. The integration of financial services though is a game changer and means SB is the likely medium term “winner” in t...
Service revenue trend was softer on slower non-mobile this quarter. Collectively, mobile revenue trend (Consumer + Enterprise) maintained its second consecutive of growth and operators are implying a strong Q4. For instance, Softbank is expecting Consumer MSR to rebound this year (at flat YTD); NTT implying a strong Q4 EBIT on cost reductions and streamlining of non-core assets like Real Estate.
In our 2010 Japan Perspective, written close to the nadir of the bear market, we discussed what was wrong with Japan, but also what it was starting to do right. Fourteen years on, the Nikkei 225 - though not yet Topix - has hit a new all-time high. This report looks at how Japan built on those things that were going right, while also starting to address what else needed to be done, and looks at whether more is needed to be done if the market rally is to continue from here.
Such a sharp rally in a stock that we are negative on impels us to question our thesis. In this short note we try to address the question of whether Rakuten is at a turning point, or, in other words: “Are we wrong to be negative”. Plus model update.
Wireless spectrum is one of the most valuable commodities in the telecoms market. Japanese telcos have previously been issued spectrum for free. But what if it starts to be auctioned? In this note, we use our new proprietary SpectrumHub Global Database to calculate the likely cost of mmWave spectrum in Japan. We also look at the total value of all spectrum held by the incumbents, to address the implications if Japan were to move to auction for all spectrum.
Rakuten’s topline trend was slower but overall losses eased further on lower mobile losses. Despite this, EBIT was still behind consensus this quarter (Q4: -¥33bn vs ¥-28bn consensus). Non-GAAP Mobile loss improved from ¥81bn to ¥71bn but the loss was still higher than expectations.
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