Big writedown on cards for DoCoMo


DoCoMo launched the world's first 3G mobile service in Japan last year

TOKYO, Japan (CNN) -- Shares in Japanese mobile phone giant NTT DoCoMo jumped almost 5 percent Thursday after reports it would take a special charge of 1 trillion yen ($7.54 billion) on overseas investments.

DoCoMo, the largest company by market capitalization on the Tokyo Stock Exchange, was trading at 364,000 yen, a gain of 17,000 yen or 4.9 percent, near the close.

Shares in parent NTT shares were up 17,000 yen or 3.46 percent at 509,000 yen.

DoCoMo's offshore investments in mobile operators include 16 percent of AT&T Wireless Services in the U.S., 15 percent of KPN Mobile in the Netherlands, 20 percent of Hutchison 3G U.K. and 21 percent of Taiwan's KG Telecommunications.

It is using these investments to help launch its i-mode wireless Internet service in markets outside Japan, where i-mode has been hugely successful.

DoCoMo began i-mode services in Germany this month, with Belgium and Holland to follow soon and a rollout in the U.S. likely later this year.

But the downturn in global telco valuations since April 2000 means the company's investments face heavy writedowns.

Credit Suisse First Boston analyst Mark Berman told Reuters news agency he had been looking for a special loss of between 850 billion yen and 1.5 trillion for the current fiscal year.

The Nihon Keizai Shimbun business daily reported Thursday that in addition to taking a 1 trillion yen ($7.54 billion) special charge on its investments, DoCoMo would post a group net loss of 100 billion yen ($754 million) in the financial year that ends this month.

It said the telco, which had previously forecast a net profit of 255 billion yen for the year, would fall into the red for the first time since going public in 1998.

On track for record sales

DoCoMo will post the net loss despite being on track to post record figures for both group sales and operating profit, the Nihon Keizai said.

A DoCoMo spokeswoman declined to comment, ahead of a scheduled news conference by CEO Keiji Tachikawa later Thursday.

DoCoMo listed its shares on the New York and London stock exchanges on March 1 and now faces increased scrutiny from global investors.

After investing more than 1.8 trillion yen ($13.56 billion) in wireless carriers overseas, DoCoMo took a 263 billion yen ($1.98 billion) appraisal charge in the April-September first half on its investment in KPN Mobile.

It has been expected to take an additional charge on KPN after the Dutch company decided this month to take a 13.7 billion euro goodwill write-down on its stake in Germany's third-largest wireless carrier, E-Plus.

The Nihon Keizai said 600 billion to 700 billion yen of the charge would come on DoCoMo's 1.19 trillion yen ($8.97 billion) investment in AT&T Wireless Services, the third-largest wireless carrier in the United States.

DoCoMo's net profit in the year to March 2001 was a record 365 billion yen ($2.75 billion).