After years of spectacular growth, NTT DoCoMo Inc. on Wednesday said group net profits in fiscal 2001 plunged 99.8 percent to 862 million yen due to losses on strategic foreign investments.

DoCoMo wrote off a record 812.8 billion yen in special losses, offsetting most of its record-high operating profits of 1 trillion yen.

In April, the company forecast a first ever net loss of 36 billion yen for the just-ended fiscal year.

The nation’s No. 1 cell phone operator attributed the upward revision to cost-cutting efforts and the strong business performance of packet data communication, adding that the earlier prediction was based on September forecasts.

The bulk of the extraordinary loss was attributed to investments in foreign telecom companies whose share prices have plunged over the past couple years. The stakes were bought as the centerpiece of DoCoMo’s strategy to to make its 3-G technology a global standard.

By company, DoCoMo suffered a 506 billion yen impairment loss in AT&T Wireless Services Inc. of the United States, a 30 billion yen loss in KG Telecommunications Co. of Taiwan and a 14 billion yen loss in Hutchison 3G U.K. Holdings Ltd.

“Globally, the cellular (stock) market was in an abnormal situation in fiscal 2001, ” said DoCoMo President Keiji Tachikawa at a news conference Wednesday in Tokyo.

DoCoMo’s domestic sales and pretax profits, however, marked significant growth over the previous year.

The company posted 5.17 trillion yen in consolidated sales, up 10.4 percent from a year earlier, while pretax profits grew 24.2 percent to 853.3 billion yen.

DoCoMo’s cellular business is at a turning point, Tachikawa said, noting that revenue growth from the voice communication business is slowing down as cellular data communication marks significant improvement.

Revenue from regular voice communication was 3.27 trillion yen, up 5.2 percent, while revenue from packet data communication — most of which came from the company’s i-mode service — increased by 102.5 percent to 715.6 billion yen.

DoCoMo also said it will transform its eight regional operating companies into wholly owned subsidiaries through stock transactions on Nov. 1 as part of preparations for a consolidated tax payment system to be introduced this fiscal year.

For fiscal 2002, DoCoMo predicts sales will increase 3.9 percent to 5.37 trillion yen, pretax profits will increase 13.8 percent to 971 billion yen and net profits to be 511 billion yen.

“We want to bring the situation back to normal in fiscal 2002,” Tachikawa said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.