Japan's largest telecom group NTT said Friday its operating profit for the first half dropped 18.4 percent as its cellphone unit DoCoMo suffered a slump amid a price war. Nippon Telegraph and Telephone Corp reported an operating profit of 563.99 billion yen (5.0 billion dollars) for the six months to September, down from 691.52 billion yen a year earlier.
Net profit plunged 33.0 percent to 195.17 billion yen while revenue slipped 1.2 percent to 5.19 trillion yen, it added. NTT DoCoMo reported in late October its net profit dropped 20.4 percent from a year earlier to 246.5 billion yen. DoCoMo has been the big loser of Japan's introduction a year ago of "number portability," which lets customers switch carriers without changing numbers and has sparked increased price competition.
"We saw a relatively large profit decline at NTT DoCoMo due to the introduction of the new discount service," NTT president Satoshi Miura told a press conference. Miura said it was NTT's "foremost challenge" to stop its market share from being further eroded.
Despite the slump in its mobile phone business, however, NTT raised its full-year earnings forecast due to capital gains from the return of pension assets that it had handled on behalf of the government. The company now projects operating profit of 1.32 trillion yen for the year to March 2008, up from an earlier estimate of 1.11 trillion. Net profit is seen at 530 billion yen, up from 460 billion yen, but the revenue forecast was cut to 10.6 trillion yen from 10.7 trillion.
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