NTT dials in record corporate loss in Japan


NTT's president is stepping down, as the company looks to its cell-phone subsidiary for advances

Alex Frew McMillan and wire reports

TOKYO, Japan -- Japan's former monopoly phone company, Nippon Telegraph and Telephone Corp., on Tuesday posted the largest one-year loss in the country's history, excluding banks.

NTT, as the company is known, said it lost 812.2 billion yen ($6.4 billion) for the year just ended in March.

Most of the damage stemmed from a 2.1 trillion yen one-time charge, for restructuring and to write down investments abroad.

In announcing the loss, NTT said President Junichiro Miyazu will step down, making way for senior executive vice president Norio Wada. That had been foreseen for some months.

Miyazu will remain on the board but will not take part in day-to-day operations anymore. He said the year's performance was an "aberration" and said it is very hard to predict performance in the modern telecommunications industry.

Increasing competition

NTT, which faces increased competition and which is attempting to recast its regional subsidiaries, forecast a profit for the year to next March.

The 812 billion yen net loss came off total sales of 11.7 trillion yen, up 2.3 percent over the prior period.

For the year to March 2003, the company predicted it would make a net profit of 361 billion yen. That is still below the 464 billion yen it made in the year ended March 2001.

NTT stock shrank 1.45 percent to 477,000 yen on Tuesday, on a day the tech-driven Nikkei rose 0.17 percent.

NTT's performance helped drag down the broader market, as measured by the Topix index. It closed 0.27 percent lower.

DoCoMo showed way

Industry analysts had anticipated the huge loss after NTT DoCoMo, NTT's cell-phone service subsidiary, scraped into a narrow profit amid large writeoffs on its cell-phone investments in Europe (full story).

NTT DoCoMo is now the largest listing on the Tokyo stock exchange, by market capitalization. The shares closed down 2.3 percent at 302,000 yen.

NTT, like AT&T in the United States, surrendered its monopoly position in the Japanese fixed line business. It is still the largest telecom company in the world.

Tokyo-based NTT is a holding company for NTT East and West, which it is reorganizing. It still owns around 65 percent of DoCoMo.