Number Portability Spooks Investors
The next several months could be very bumpy for Japan’s Big 3 cellular service providers. First, KDDI Corp. just reported record Q1 earnings but failed to see a further rise in its share price since it also warned of uncertainty in the 3rd and 4th quarters, which is when number portability becomes available. Strong earnings were priced in given recent strength in retaining subscribers. KDDI understandably left its full year forecast in place projecting a lower y-o-y net profit on higher revenue. However, that does allow it to raise its forecast this autumn if number portability is not as severe as anticipated. Its shares lost 2.15% on the day.
Shares of NTT DoCoMo (DCM) (Tokyo: 9437) are trading near an all-time low and could obviously go lower if it too voices concerns about number portability when it reports earnings on Friday, July 28th. DoCoMo’s ordinary shares lost 0.60% Friday in Tokyo.
Softbank Corp (SFTBF) (Tokyo: 9984) has experienced nearly a complete reversal giving up most of the gains from its multi-year share price peak early this year. The market doesn’t seem to be buying the synergies of Softbank and Yahoo! Japan (Tokyo: 4689) as they would be applied to the former’s acquisition of Vodafone Japan. Continue>>