Nippon Telegraph & Telephone Corp may take Japanese yen 2 trillion (US$15 billion) in charges, mostly to write down overseas investments by its mobile phone unit, resulting in the biggest loss ever reported by a Japanese company, the Nihon Keizai newspaper reported.
The charges, also to reflect unspecified cost cuts in domestic operations, will result in a loss of as much as Japanese yen 1 trillion for the year ending tomorrow, according to the newspaper report, which cited unidentified sources.
NTT spokesman Yo Takahashi said "no concrete decision has been made" on any charges. The company posted a statement to that effect on its Web site at http://www.ntt.co.jp. The reported loss would surpass the record Japanese yen 684.4 billion loss by Nissan Motor Corp in the year ended March 2000, Kyodo said.
Half the charges, or Japanese yen 1 trillion, will be taken at mobile phone unit NTT DoCoMo Inc, while Japanese yen 500 billion will come from two regional subsidiaries, NTT East Corp. and NTT West Corp, Kyodo said.
Long-distance operator NTT Communications Corp is likely to post a Japanese yen 100 billion loss, the report said. NTT DoCoMo will write off Japanese yen 260 billion from its investment in KPN Mobile NV of the Netherlands.
DoCoMo wrote down Japanese yen 262.7 billion in the six months ended Sept. 30 for the value of its 15 percent stake in KPN Mobile. In a January filing to the US Securities and Exchange Commission the company said it may have to write down more on its overseas investments in the second half. It has put Japanese yen 1.9 trillion into overseas companies, including AT&T Wireless Services Inc.
DoCoMo's shares have declined 61 percent from a February 2000 high on expectations it will struggle to recoup the investment. They fell Japanese yen 8,000 to 352,000 on Friday. NTT shares have dropped 37 percent over the last 12 months and yesterday declined Japanese yen 5,000 to Japanese yen 504,000.
Tokyo-based DoCoMo will decide how much of its investment in AT&T Wireless to write down after the fiscal year ends, President Keiji Tachikawa told reporters in Tokyo yesterday.
DoCoMo holds stakes in KPN Mobile, AT&T Wireless, Hutchison 3G UK Holdings and Taiwan's KG Telecommunications Co.
Shares of AT&T Wireless, in which DoCoMo invested US$10 billion, recently traded at less than half what it paid for its 16 percent stake.
If the value of an investment falls by more than 50 percent, DoCoMo has said it will consider a writedown. AT&T Wireless is the biggest of DoCoMo's overseas investments.
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