Japan's leading wireless provider,
, said Wednesday that net profits plunged 99% for the latest year as overseas investments continued to gush red ink. But the company rolled out a cheerier forecast for 2002.
The publicly traded wireless division of
Nippon Telegraph & Telephone
blamed the profit freefall on a 813 billion-yen writedown from losses incurred on international investments. After the writedown, profit for the year ended March 31 plunged to a paltry 862 million yen ($6.7 million) from last year's robust 365 billion-yen profit.
Still, the stock rose 90 cents to $63.50 as investors bid up tech and telecom names in the wake of
solid third-quarter numbers Tuesday. The
index was up 6.5% around midday.
DoCoMo's problem investments include a 20% stake in Hutchison 3G UK Holdings, a 15% share of KPN Mobile and a 21% stake in Korea's KG Telecom. Back in 1999, DoCoMo also invested more than $10 billion for a 16% stake in
( AWE). The companies are collaborating on refining a version of DoCoMo's wildly popular mobile data service, I-mode.
The investments are part of DoCoMo's strategy to spread the gospel of advanced wireless Internet services beyond its core Japanese audience. The company was one of the first to deploy such advanced services, but not before a series of delays pushed the product's launch to last October.
Last Friday, a Japanese newspaper quoted AT&T Wireless CEO John Zeglis saying I-mode would be launched in the U.S. this fall. An AT&T spokesman corrected those reports, saying AT&T Wireless' fall launch essentially will be of an updated version of its current mobile data service, called mMode, which was launched last month in several test markets, including Chicago, Dallas, Seattle and Florida. More cities will be added by the end of the year. (The service won't be dubbed I-mode in this country -- drawing the ire of DoCoMo's Japanese investors, according to reports.)
mMode represents a gambit to tack Internet data services on top of AT&T Wireless's new GSM, or global system for mobile communications, standard, in an effort to expand its market amid a global slowdown in tech spending. Accessing these services requires users to buy new phones costing between $80 and $200.
The investment setback notwithstanding, DoCoMo forecast 2002 profits would climb back toward 2000's airy heights to 511 billion yen, on revenue of 5.37 trillion yen. DoCoMo expects no further losses on its overseas investments this year.
For the latest fiscal year, revenues jumped 10.4% to 5.17 trillion yen, boosted by increases in both cellular and I-mode subscribers in Japan. DoCoMo added 13% more users to its vanilla offerings, while I-mode users jumped 48%.
Next year, its 3G services are expected to skyrocket 1,443% to 1.3 million subscribers. I-mode users are expected to expand a more moderate 14.4%, while cellphone subscribers are expected to rise only 4.2% as the company begins to sway users over to more advanced and profitable services.