Foreign investments wipe out NTT DoCoMo's profits

The plummeting value of telecoms stocks has nearly obliterated NTT DoCoMo's profits.

Net profits fell to 862 million yen or £4.5m (€7.2m), a fraction of the £1.94bn (€3.1bn) it reported a year ago and the lowest for the company since its Tokyo listing in 1998.

The plunge largely came from a special loss of 813bn yen (€6.95bn) for write-downs taken on the reduced value of stakes in NTT DoCoMo's foreign partners - AT&T Wireless in the US, Dutch telecoms firm KPN Mobile, KG Telecommunications of Taiwan and Hutchison 3G UK Holdings.

Taking minority stakes in overseas telecoms firms is a major part of NTT DoCoMo's strategy in its quest to grow as an international player.

Chief executive Keiji Tachikawa says he's sticking by that strategy despite the losses and defends the investments as long-term, meant to lift the global competitive edge of his company.

Mr Tachikawa says he's counting on a turnaround this year because no further investment losses are expected.

He says its mobile business in Japan is continuing to do well, with revenue rising from its hit i-mode internet-linking service.

In 2001, i-mode attracted 32m users who are exchanging e-mail, searching for restaurants and downloading cartoon pictures, all on mobile phones.

Mr Tachikawa says i-mode is already expanding abroad through DoCoMo's foreign partners.

It has begun recently in Germany and Holland, and it is set to begin later this year in the US.

Operating revenue for the 2001 financial year totaled 5.17 trillion yen (€0.044 trillion), up 10% from 4.69 trillion yen (€0.040 trillion) the previous year.

NTT DoCoMo says handset sales will climb in some parts of the world, but growth in Japan will increasingly come from relaying data and video, rather than charges for talking.

Its new 3G service, which can zap information at up to 40 times the speed of current mobile phones and includes a videophone, fell short of company expectations.