SemiOT:NTT's Net Profit Drops 4% As VOIP Erodes Earnings
Associated Press
November 9, 2005 10:04 a.m.
TOKYO – Nippon Telegraph & Telephone Corp. reported a 4% drop in net profit for the April-September half-year as the popularity of Voice over Internet Protocol and other cheaper services eroded the telecom company's earnings.
Fiscal first-half profit at Tokyo-based NTT totaled ¥330.7 billion ($2.8 billion), down from ¥344.6 billion in the year-earlier period. Sales slipped 1.7% to ¥5.2 trillion from ¥5.3 trillion. NTT didn't break down quarterly numbers.
The shift to Internet Protocol telephoning -- a technology that uses data transmission over the Internet to allow people to talk on the telephone -- and the expected arrival of newcomers in mobile services have been threatening the former government monopoly's domination over Japanese telecommunications.
The dramatic growth at NTT's mobile unit, NTT DoCoMo Inc., which had helped sustain profits at NTT, has dwindled as the Japanese mobile market has become saturated in recent years. Also hitting NTT's earnings was a drop in voice-related services in both fixed-lines and mobile operations.
For the full year ending March 31, 2006, NTT revised its net-profit forecast upward to ¥525 billion from a previous forecast of ¥440 billion. But the company lowered its sales forecast to ¥10.7 trillion, below the ¥10.6 trillion the company had previously forecast.
NTT says income from people talking on phones will likely continue to decrease, but revenue from Voice over Internet Protocol, or VOIP, services will increase. The introduction of cheaper fees in both telephone and cellphone services has also pushed down the average bill for each customer |
