NTT DoCoMo Inc. said Thursday its operating profit for the fiscal first half fell 7.8 percent due to the heavy cost of incentives paid to handset vendors.

Operating profit for the April-September period stood at 590.11 billion yen, while revenue rose 6.4 percent to 2.54 trillion yen.

Net profit soared to a record 356.43 billion yen, compared with 4.17 billion yen during the same period a year ago, when the company took a hefty one-time charge to write down overseas investments.

“Thanks to the introduction of camera-equipped handsets, replacement demand was greater than we expected, and it affected expenses,” DoCoMo Chief Executive Keiji Tachikawa told a news conference.

The firm, 61.6 percent owned by former state monopoly Nippon Telegraph and Telephone Corp., is the nation’s largest mobile phone operator, with a 57 percent market share.

The company said the popularity of its mova505i series prompted subscribers to upgrade, pushing up operating costs.

The firm said it sold 13.9 million conventional second-generation handsets during the period, with 9.7 million being upgrades by current subscribers.

Company officials said it pays incentives averaging 31,000 yen per unit to vendors, which use the subsidies to mark down handsets. The incentive per unit remained almost unchanged from a year ago, they said.

The number of subscribers to the firm’s conventional cell phones rose 1.2 percent to 44.04 million during the six-month period.

This level of growth was outpaced by smaller rival KDDI.

During the period, average monthly revenue per unit (ARPU) of conventional cell phones fell 1.2 percent to 8,060 yen because increased fees from data transmission could not offset the continuing slide in voice communication.

ARPU is a closely watched barometer in the telecommunications sector.

The voice ARPU has been steadily declining because more people use i-mode and other messages as the main means of mobile communication.

Its FOMA third-generation service meanwhile posted faster-than-expected growth, leading the company to upgrade its full-year subscriber target to 2 million from 1.46 million.

The number of FOMA users more than trebled to 1 million in the six-month period. Subscribers used more services available over the high-speed wireless network, pushing ARPU up 34.9 percent to 10,120 yen.

FOMA, launched two years ago, suffered a weak start due to its short battery life and small coverage areas.

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