DoCoMo's half-year net income drops by 95%

NTT DoCoMo is to cut the salaries of its top executives after seeing a 95% drop in net income for the first half of the year.

NTT DoCoMo is to cut the salaries of its top executives after seeing a 95% drop in net income for the first half of the year.

NTT DoCoMo posted a net income of ¥4.2bn (£21.8m) for the first half of the financial year. The decline was the result of write-offs worth ¥573bn that were recognised during this period.

The company wrote down the value of its international investments in AT&T Wireless Services, KPN Mobile and Hutchinson 3G, because the stock prices and company values of these carriers continued to fall.

To take responsibility for the losses, the company decided to cut compensation for its executives, including president and chief executive officer Keiji Tachikawa, by 10% to 20% until the end of the year.

Tachikawa cited the collapsing stock prices of telecommunication carriers overseas for the losses, saying this was partly because the market's hyped expectations of third-generation (3G) had cooled.

Having launched the 3G Foma service for the first time more than a year ago, NTT DoCoMo hoped that good results for Foma would raise 3G expectations again.

However, the company has revised its forecast of Foma subscriptions for the year from 1.38 million down to 320,000.

"We are confident that we can achieve 320,000," Tachikawa said. NTT DoCoMo has 135,700 Foma subscriptions but most of its corporate clients are still trial users. The company is hoping corporate use will provide the boost Foma needs.

The company also cut its full-year net income projection to ¥182bn. However, the last projected number of ¥511bn is not an accurate comparison because in accordance with recently changed Japanese accounting laws, NTT DoCoMo has begun stating its financial results in accordance with US generally accepted accounting principles (GAAP).

NTT DoCoMo enjoyed a 24% increase in operating revenues from its packet communication I-mode service and has sold 2.5 million camera-equipped mobile handsets since it launched its first camera-equipped phone in June.

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