Japan's NTT DoCoMo warns profits for this year will likely be well down


Sat, Oct 28, 2006 - Page 10

NTT DoCoMo warned yesterday that increasingly cut-throat competition in Japan's cellphone market would leave a big dent in its profits this year as its first-half earnings were down by almost one quarter.

With recent changes to industry rules making it easier for customers to change mobile operators, NTT DoCoMo warned that conditions were likely to get even tougher and forecast a steep fall in earnings this year.

Net profit dropped 19.6 percent to ?309.82 billion (US$2.62 billion) in the half year to last month compared with a year earlier when the group booked large gains from the sale of shares in Hutchison 3G UK Holdings.

Operating profit fell 7.4 percent to ?516.89 billion as revenues rose 0.4 percent to ?2.38 trillion, helped by the introduction of new handsets with credit card functions and built-in music players.

Company president and chief executive Masao Nakamura said the operator would "strive to achieve" its target of ?810 billion in operating profit for the year amid increasing rivalry for customers.

NTT expects a full-year net profit of ?488 billion, down 20.1 percent from a year earlier, on revenue of about ?4.80 trillion, down 0.7 percent.

"While the competitive environment is expected to become increasingly fierce, we aim to increase our competitiveness by responding swiftly to the changes in the market," Nakamura said in a statement.