NTT DoCoMo, Japan's largest mobile telecoms operator, today posted a drop of more than 50 per cent in its first-half group net profit after writing down an investment in KPN that soured with the info-tech slump.
The write-off pushed the DoCoMo parent company into the red for the first time since 1994, with a net loss of 27.81 billion yen ($229.6 million) for the six months to September 30th, a sharp turnaround from a record profit of 101.4 billion yen a year ago.
In a widely expected move, DoCoMo booked an extraordinary loss of 262.7 billion yen on a consolidated basis as it wrote down its investment in Dutch mobile operator KPN Mobile.
DoCoMo bought a 15 per cent stake in the unlisted arm of KPN Telecom for 407.3 billion yen in August 2000 as part of its strategy to promote overseas use of its "i-mode" mobile Internet service and third-generation (3G) wireless technology.
"We're looking at this as just a transitory loss," DoCoMo president Mr Keiji Tachikawa told a news conference of the KPN Mobile move. "Our international strategy remains basically unchanged."
Early last month, DoCoMo launched the world's first 3G service, which offers sophisticated features such as videoconferencing but has been dogged by technical glitches and doubts about consumer interest.
DoCoMo spent 1.8 trillion yen last year buying strategic minority stakes in foreign partners, including a 16-percent stake in AT&T Wireless Group purchased for $9.8 billion in January, and analysts expect additional write-downs as this year's info-tech slide erodes their value.