• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

NTT Fiscal 2005 Profit Down 30 Percent

Posted on: Friday, 12 May 2006, 06:08 CDT

By YURI KAGEYAMA

TOKYO - Profit at Nippon Telegraph and Telephone plunged 30 percent for the fiscal year ended March 31, as a drop in revenue from traditional fixed-line telephones and lower prices in mobile services crimped earnings, Japan's top telecommunications company said Friday.

Nippon Telegraph and Telephone Corp.'s net profit totaled 498.7 billion yen ($4.5 billion) in fiscal 2005, down from 710.2 billion yen the previous fiscal year.

Full-year sales for the Tokyo-based company totaled 10.74 trillion yen ($96.8 billion), down 0.6 percent from 10.81 trillion yen a year earlier.

Gains that NTT scored in revenue from Internet data transmission weren't enough to offset its lagging fixed-line business. The company didn't break down quarterly numbers.

Although NTT's mobile carrier unit NTT DoCoMo still dominates the Japanese market, and the service still continues to grow, prices have been dropping because of intensifying competition.

The former government monopoly expects 500 billion yen ($4.5 billion) profit on 10.8 trillion yen ($97.4 billion) sales for its current fiscal year ending March 31, 2007.

NTT said it will focus on wooing more users to its broadband service using optical fiber, which is among the fastest type of broadband available around the world.

NTT also hopes to boost users of a fast third-generation data transmission on mobile phones called Foma, which allows people to use handsets to watch video clips and relay more data. Japanese already use their cell phones to exchange e-mail, download music, check train schedules, search for restaurants and carry out other functions by accessing the Internet.

But competition is expected to intensify in coming months in Japan's telecommunications.

Number portability begins later this year in Japan, which will allow people to switch mobile carriers without changing their telephone numbers, and newcomers are expected to offer broadband and other services.

Softbank Corp., which is strong in this nation's broadband market with Yahoo! BB, has recently acquired British mobile company Vodafone Group PLC's Japanese unit.

Softbank dominates the country's market in Voice over Internet Protocol telephoning - technology that transmits phone calls over broadband Internet connections.

Its efforts have not only helped spread broadband in Japan but also brought down prices. Its expansion into the cell-phone business could also bring down prices for such services, although the company says pricing hasn't been decided.

Softbank bought the fixed-line company Japan Telecom Co. and the Japanese unit of British telecom Cable & Wireless PLC in 2004, and could put up a big challenge against NTT.

People subscribing to NTT's optical fiber broadband rose to 3.4 million people as of the end of March, up from 1.67 million a year earlier. The company plans to raise that to 6.1 million by March 2007.

Telephone subscription fell from 50 million to 46.9 million by March, and NTT foresees that trailing off to 41.9 million by the end of this fiscal year.

NTT shares, which have lost some of the gains it made last year, slipped 2 percent to 532,000 yen ($4,800) in Tokyo shortly before earnings were announced.

Source: Associated Press/AP Online

More News in this Category