KDDI Corporation (TSE:9433, Financial) offers investors a what we view as a stable, well-capitalized business providing telecommunications services in Japan, the world’s most profitable telecom market. Though Japan is a competitive market, incumbents like KDDI have benefited from the tail end of the 4G network era. As 5G becomes the standard technology and network capacity increases, however, Japanese telecoms in general may find their pricing power constrained, which raises concerns about the longer-term stability of the operating environment for these businesses.
From First Eagle Investment (Trades, Portfolio)'s Global Value Team first-quarter 2020 shareholder commentary.
