Telecoms: Valuation upgrades
Report by Astris Advisory Japan
FY23 has so far been a goldilocks scenario for Japanese telcos. Incumbents are moving closer to a recovery in high-margin, mobile service revenue growth with little competitive trouble from Rakuten Mobile despite it managing to grow subs by tapping under-served corporate users. While Kirk Boodry expects competitive intensity to step up in FY24, there are limits to how aggressive Rakuten can be and his positive outlook on the sector has not changed. IIJ is his top overall pick. He also moves KDDI ahead of NTT as his preferred large-cap telco.