NTT slashes profit forecast

NTT's mobile unit is doing better than its parent

Nippon Telegraph & Telephone, Japan's biggest phone operator, has cut its profit forecast for this year by almost a third.

Meanwhile, the country's number two maker of mobile handsets, Matsushita Communication Industrial (MCI), has slipped into the red.

MCI is best known as the manufacturer of Panasonic handsets.

NTT is a major global player, with substantial mobile phone, internet and data interests as well as a traditional fixed-line business.

Fixed line woes

It was the fixed-line business that prompted NTT to warn on profits. The phone firm has cut prices at its regional subsidaries, NTT East and NTT West, to cope with deregulation.

Our products have lost out to our competitors and that was the main problem

MCI president

NTT still expects to remain in profit in the year to March 2002, though the 30.5% reduction in expectations to 89bn yen ($128bn) now means profits will be 80% lower than last year.

NTT made 464.4bn yen in the 12 months to March 2001, climbing its way back to profitability.

Overtaken by NEC

Mobile phone maker MCI now expects to report a full-year loss for the first time since its stock market listing in 1968.

It went into the red in the six months to September 2001, reporting a net loss of 16.5bn yen ($134.7m) compared with a profit of $21.3bn yen for the same period of last year.

"Our products have lost out to our competitors and that was the main problem," MCI president Yasuo Katsura told reporters.

MCI was elbowed into second place in the Japanese mobile handset market by NEC earlier this year.