NTT reports falling profits as traditional voice revenues suffer

5 Feb 2007

Nippon Telegraph & Telephone Corp (NTT) has reported a 14.2% drop in net profits for the nine-month period from April-December 2006, largely the result of falling revenues from its fixed line and mobile business. The former monopoly, which was privatised in 1985, still derives more than 60% of its turnover from voice calls, but says that this is in decline as increasing numbers of users migrate to IP telephony to cut costs. Moreover, increased competition in the mobile segment has adversely impacted its 60%-owned mobile unit NTT DoCoMo which has been forced to cut prices to retain customers.

NTT reported that group net profit dropped to JPY410.1 billion (USD3.39 billion) in the first nine months of its current fiscal year to 31 March 2007, down from JPY477.8 billion in the corresponding year-earlier period. Operating profit was down 5% from JPY1.02 trillion to JPY966.7 billion, and group revenues were broadly unchanged at JPY7.93 trillion (JPY7.92 trillion previously). On a more positive note, NTT said that declining operating profit at its two regional fixed line businesses – NTT East and NTT West – was partly offset by NTT Data Corp. The system integration unit reported a doubling in profits in the period under review.