NTT DoCoMo Inc. said Thursday it may, if necessary, post appraisal losses on its overseas investments for the 2001 business year due to stock price movements.
Japan’s largest mobile phone operator said in a brief statement, however, that no specific decisions on the issue have yet been made.
It was reported earlier in the day that the DoCoMo group will book 1 trillion yen in special losses for 2001, due to heavy losses on investments in overseas mobile phone firms.
Hefty extraordinary charges are expected to push NTT DoCoMo into the red for the first time since it went public in 1998, with its group net balance posting losses of some 100 billion yen for the year.
This marks a striking contrast with the net profits of 365.5 billion yen logged the previous year.
Behind the steep appraisal losses are sharp falls in the stock prices of some foreign telecommunications firms in which NTT DoCoMo holds stakes, such as AT&T Wireless Services Inc. of the U.S., according to a report in a business daily.
AT&T Wireless shares are now trading at less than $9 on the New York Stock Exchange, well below the book value of about $22 that NTT DoCoMo bought them at.
Meanwhile, NTT DoCoMo President Keiji Tachikawa said the company will review its unprofitable operations, such as its pager services.
“We need to push ahead with management reforms, as the mobile phone market has moved into an era of steady growth from rapid growth,” Tachikawa told a news conference.
The number of subscribers to NTT DoCoMo’s pager services plunged to 847,000 at the end of February, from around 10 million three years ago.
Personal handy-phone system services are among the other operations subject to this review, Tachikawa said.
Pager services lost 3.5 billion yen and PHS services lost 27.6 billion yen in the first half of the 2001 business year, according to NTT DoCoMo’s consolidated results for the six-month period that ended in September.
Tachikawa added that NTT DoCoMo plans to launch its third-generation mobile phone services in Europe and Hong Kong later this year.
The new-generation cell phone services will offer extremely rapid data transmission and will allow users to access video and CD-quality audio directly from the Internet.
Japan Telecom tieup
Japan Telecom Co. said Thursday it has agreed with Qwest Communications Corp. of the United States to jointly offer international data communications network services in Japan, the U.S. and Europe.
Japan Telecom, the nation’s No. 3 telecommunications carrier, had been looking for a foreign partner in this area after capital ties with British Telecom PLC. of Britain and AT&T Corp. of the U.S. were severed when mobile phone operator Vodafone Group of Britain took over Japan Telecom last fall.
Under the new alliance, the two companies will be able to offer more cost-competitive international services by mutually using trans-Pacific data network cables between Japan and the U.S., the company said.
Using networks of KPN Qwest, Qwest’s European unit, Japan Telecom will be able to offer services with its own brand in 18 European countries, including Austria, Belgium, Denmark, Finland, France, Germany, Spain and the United Kingdom.
Japan Telecom will also serve as a sales agent for Japanese customers of Qwest and KPN Qwest.
Meanwhile, Japan Telecom will maintain separate business tieups with BT and AT&T, which place greater emphasis on larger multinational corporate customers, a Japan Telecom spokesman said.
Depending on customers’ needs, Japan Telecom will offer joint international services either with Qwest, BT or AT&T.
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