Cost-cutting helps drive NTT’s first-quarter net income up 11.7%

6 Aug 2010

Japanese telecoms behemoth Nippon Telegraph and Telephone Corp (NTT) has reported net profits of JPY155.94 billion (USD1.80 billion) for its fiscal first quarter ended 30 June 2010, up 11.7% from JPY139.56 billion in the corresponding year-earlier period, on the back of cost-cutting measures at its fixed line and internet operations. Revenue slipped slightly to JPY2.499 trillion from JPY2.502 trillion in the year-ago quarter. Group operating income of JPY339.65 billion was 4.3% higher year-on-year, while pre-tax profits climbed 4.8% to JPY341.61 billion. For FY2010/11 the company maintained its forecast of net profit of JPY 500 billion, up 1.6% year-on-year, on revenues which are expected to dip 0.2% to JPY10.16 trillion, and operating profits of around JPY1.17 trillion. The state-backed telecoms giant said moves to cut costs at its regional fixed line units NTT East and NTT West helped to offset lower income from its traditional cash cow NTT DoCoMo. The company has also reduced its workforce and lowered operating expenses at these companies.

NTT added a net 588,000 ‘Flets HIKARI’ fibre-optic (FTTH) broadband customers in the period under review, increasing its total to 13.84 million. In addition, the operator added a net 506,000 optical IP telephony customers (HIKARI Denwa), for a total of 10.65 million, bust said the ADSL customer base continued to contract, losing 129,000 customers in the quarter for a total of 3.25 million. Traditional voice service subscribers (PSTN) declined by 882,000 lines in its first quarter to June, down to 37.45 million, although NTT DoCoMo added 432,300 net mobile lines for a total of 56.51 million subscribers.