Nippon Telegraph and Telephone Corp (NTT) [NYSE: NTT] reported a return to profit in its fiscal year to end-March 2003 following a record loss the previous year, but highlighted growing concerns at falling sales and a slowdown in momentum of its restructuring process. In 2002-03 NTT made a profit of JPY233.4 billion (USD1.1 billion), turning round last year’s loss of JPY834.7 billion, but NTT President Norio Wada conceded that the company’s results received a ‘major lift’ from cost cutting and that the reductions which aided a return to profit in 2002 would be lower during the current year, and would force it to find other ways to boost income. The former state-owned monopoly operator also experienced an unwelcome ‘first’, in that revenues fell for the first time ever as a result of declining demand for voice services from traditional fixed line services. Sales dipped by 0.9% to JPY10.92 trillion as more and more customers migrated to alternative, cheaper internet-based call services or mobile phones. The company says that it expects sales to remain flat during 2003 and is turning its focus to developing its broadband ADSL internet access and IP-based services portfolio. Nonetheless, in light of the dwindling sales it is anticipating further cost-cutting measures, including a further 3,900 redundancies to follow the 7.2% reduction in its headcount last year.