Telecommunication 'War' : DoCoMo profits slip amid Japan's mobile war

Japan's largest mobile telephone operator, NTT DoCoMo Inc., said Friday its net profit fell by more than 20 percent in the first half of its business year amid a price war.

NTT DoCoMo, the pioneer of third-generation mobile phone services, slightly revised down its sales forecast for the full year as it intends to introduce new discount plans to entice customers.

The company, a unit of telecom giant Nippon Telegraph and Telephone Corp., has been the big loser of Japan's introduction a year ago of "number portability," which lets customers switch carriers without changing numbers.

"Since the launch last year of number portability, our business environment has continued to be challenging," NTT DoCoMo president Masao Nakamura told a press conference.

In the first half to September, NTT DoCoMo said its net profit slipped 20.4 percent from a year earlier to 246.5 billion yen (2.16 billion dollars).

Operating profit slid 21 percent to 408.5 billion yen and revenue was down 2.4 percent at 2.3 trillion yen.

NTT DoCoMo said the year-on-year fall in operating earnings was mainly due to an accounting change, but that it forecast tough times ahead.

A recent survey showed that Softbank Corp., which bought the troubled Japanese operations of Britain's Vodafone last year, beat NTT DoCoMo and second-place KDDI Corp. in winning new subscribers for the fifth straight month in September.

NTT DoCoMo said it would introduce new discount plans for customers in the third quarter and also continue spending to boost infrastructure.

The company cut its revenue forecast for the full year by 1.3 percent to 4.67 trillion yen, which would represent a fall of some 2.5 percent from the previous financial year.

"The competition in the Japanese cellular phone market is expected to become increasingly fierce in the future," a company statement said.

NTT DoCoMo said it still expected its net profits for the year to increase by just over four percent to 476 billion yen and operating profit to inch up 0.8 percent to 780 billion yen.

Total operating costs rose 2.7 percent in the first half as NTT DoCoMo spent more on marketing and infrastructure.

But even as it tried to bring more customers to its third-generation service, the company said it suffered another slip in the most recent quarter in the amount of revenue generated by each subscriber.