Weak fixed and mobile results drag NTT’s profit down 26%

6 Feb 2006

Japan’s largest telecoms company Nippon Telegraph and Telephone Corp (NTT) has reported a 26% drop in quarterly profit to JPY253.7 billion (USD2.13 billion) from JPY343.4 billion a year earlier, as weaker than expected results from its fixed line and mobile units combined to undermine its bottom line. According to Reuters, the telco’s landline operations ‘are struggling to cope with falling prices amid dwindling voice traffic as customers spend more time on mobile and internet phones.’ Although NTT DoCoMo, which accounts for more than 70% of the parent’s turnover, had a steady first half in its fiscal year ending March 2006, it posted a sharp drop in profits in the third quarter to 31 December as it increased incentives, sold more phones and racked up increased costs related to consulting and other non-core businesses. NTT expects an operating profit of JPY1.16 trillion (USD9.8 billion) for the full year to March, down 4.1% from JPY1.21 trillion a year ago, and below analyst expectations of JPY1.19 trillion, according to Reuters estimates.

Japan, NTT (NTT East & NTT West), NTT DOCOMO