NTT DoCoMo Inc. said Thursday its group net profit for the fiscal half plummeted 95.3 percent year-on-year to 4.17 billion yen, due to hefty appraisal losses on its overseas investments.

On an unconsolidated basis, the nation’s largest cell phone operator, majority owned by Nippon Telegraph and Telephone Corp., posted a net loss of 168.35 billion yen, compared with a loss of 27.81 billion yen a year earlier.

DoCoMo said it took a midterm charge of 307.8 billion yen in writing off valuation losses at three overseas carriers — 167.6 billion yen at AT&T Wireless Services Inc of the U.S., 67.9 billion yen at KPN Mobile N.V. of the Netherlands and 72.2 billion yen at Hutchison 3G U.K. Holdings Ltd.

The valuation losses continued to flow despite the fact that in fiscal 2001, which ended March 31, the firm took a charge of more than 800 billion yen in appraisal losses from the investments.

DoCoMo invested in the carriers at the height of the Internet bubble in an attempt to make its proprietary 3G technology a de facto global standard that would put it in position to sign lucrative licensing deals.

“We gravely accept the fact that we incurred appraisal losses and therefore had to greatly lower our projections for the full year,” said DoCoMo president and CEO Keiji Tachikawa.

He said that he and other senior officials took responsibility for the losses by cutting their monthly salaries 10 percent to 20 percent, effective from this month through the end of March, as well as by forgoing seasonal bonuses.

Group sales during the six-month period ending on Sept. 30 inched up 1.9 percent to 2.38 trillion yen, while group operating profit grew 17.5 percent to 639.98 billion yen.

Revenue from mobile phone services edged up only 0.2 percent to 1.64 trillion yen from a year ago. Company officials attributed the dull growth to changing user behavior, as customers rely more on text messages, which cost a few yen each, than on expensive voice calls.

Reflecting the trend, revenue from packet communication, which includes proceeds from e-mail services, grew 23.8 percent from last year to 417.3 billion yen.

The strategically important third-generation cell phone business, however, remains stagnant, with short battery life and small coverage area turning off users.

The lackluster performance of the hand sets has forced the company to scale down projections for the number of 3G users. It now expects 320,000 FOMA subscribers by the end of this fiscal year — far fewer than the initial projection of 1.38 million.

Given the massive write-down, the firm revised downward its projections for the full year to March, with group net profit down to 182 billion yen from the initial forecast of 511 billion yen, and group revenue down to 4.68 trillion yen from 5.37 trillion yen.

The firm, which adopted U.S. accounting rules as of this midterm earnings report, said there were some discrepancies in figures when compared with the report complied under the old system.

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