Standard & Poor's said Friday its long-term rating for Nippon Telegraph and Telephone Corp. remains on credit watch for possible downgrading.
The U.S. credit-rating agency placed the firm's AA+ rating on credit watch on May 8, following the announcement by Japan's largest telecommunications carrier that it had signed an agreement to acquire all shares in U.S.-based Internet service provider Verio Inc.
S&P said the recent agreement between the United States and Japan providing for a cut in NTT's interconnection fees is not expected to influence the resolution of the company's placement on credit watch.
The agreement to lower the fees that NTT charges other companies to use its networks by about 20 percent over the next two years will not significantly damage NTT's consolidated profitability, as the increased traffic on the network should offset the losses, the rating agency said.
S&P is planning to meet with NTT's management to discuss the company's financial strategies for Verio and other acquisitions, the agency said.