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November 10, 2009

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Profits decline at Japanese telecom giant

JAPAN'S biggest telecommunications company, Nippon Telegraph and Telephone Corp, said yesterday that its net profit tumbled 38 percent last quarter due to slumping mobile phone operations.

Slowing cell phone sales led the Tokyo-based company to modestly lower its revenue outlook for the fiscal year.

For the July-September period, NTT's income dropped to 142.7 billion yen (US$1.58 billion) from 230.8 billion yen last year. Group revenue fell to 2.495 trillion yen from 2.571 trillion yen, while operating profit shrank 14 percent to 321 billion yen.

The company cited weakness at its mobile communications unit, NTT DoCoMo Inc, Japan's top cell phone carrier by subscriber base. Last month, NTT DoCoMo said net profit in the recent quarter tumbled 20 percent amid lower revenue from phone calls and handsets. NTT owns about two-thirds of NTT DoCoMo.

The company noted that Japan's mobile market was reaching a saturation point.

"The competition among carriers to acquire customers and enhance services is becoming increasingly fierce," NTT said.

As a result, NTT lowered its revenue forecast for the fiscal year through March 2010. It now expects revenue of 10.17 trillion yen, down from its earlier estimate of 10.30 trillion yen.

Its shares fell 1.6 percent to 3,680 yen yesterday compared with a 0.2 percent gain in the benchmark Nikkei 225 index. The company announced earnings after trade closed yesterday.

Separately, NTT DoCoMo yesterday announced a share buyback plan that sent its stock price up 1.6 percent to 130,800 yen.



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