Nippon Telegraph and Telephone Corp. on Friday released its first consolidated financial statement since its group reorganization in July, posting pretax profits of 825 billion yen on the group sales of 10.4 trillion yen for fiscal 1999.

NTT East Corp. and NTT West, the two local call operators, also posted their financial statements for the period from July through March.

NTT East recorded pretax profits of 56.7 billion yen against an earlier projection of 29 billion yen in April, and NTT West posted pretax losses of 43 billion yen against projection of losses of 70 billion yen.

The solid results, however, may undermine the government’s position in ongoing talks with the United States on deregulating the nation’s telecommunications monolith, which has been singled out by several economists for squelching Internet usage in Japan.

The U.S. government is demanding that the NTT group lower interconnection rates charged to other telecom firms, hoping that competition in the market leads to lower costs for Internet users.

NTT has been arguing that there is no room for a large reduction and that implementing one would seriously hurt NTT East and West, which it claims are already in severe financial straits.

At Friday’s press conference, NTT Corp. President Junichiro Miyazu failed to give a clear explanation why the two firms showed much better performances than they had claimed during the bilateral government talks.

“(The improvement) is probably because of accumulation of small (efforts),” he said. “We don’t know how (the financial status) will become in the next year or the year after that.”

Miyazu added that he did not even know if and how much the total traffic on NTT’s lines increased in fiscal 1999.

Of the 10.4 trillion yen sales of the NTT group, those from Internet-related and business data transmission business accounted for 20 percent, and cellular business accounted for 34.6 percent.

Traditional voice business over land lines continued to fall, dropping to 45.4 percent and below the 50 percent level for the first time ever.