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Wednesday, 10 July, 2002, 12:14 GMT 13:14 UK
DoCoMo reveals loss after rewriting results
Man walks past NTT DoCoMo poster
DoCoMo made costly foreign investments
NTT DoCoMo, the giant company which dominates the Japanese mobile phone market, has revealed that it made a 116bn yen loss last year under US accounting rules.

The new figures contrast with the release in May of figures under Japanese accounting standards, which produced a narrow profit.

The change is the result of heavy write-offs of the company's high-priced foreign investments -

DoCoMo is struggling against the economic downturn and the increasing maturity of the mobile market in Japan.

It is also having problems with its expensive, finicky third-generation FOMA service, which is in danger of being eclipsed by competitors' systems.

Turnaround

The profit announced in May had taken observers by surprise, because it contrasted with DoCoMo's own predictions of a loss in the year to March 2002.

But according to the new numbers, prepared under the US's Generally Accepted Accounting Practices (GAAP), the loss is three times what the company had originally predicted.

And it compares with a 401.76bn yen net profit the previous year.

DoCoMo did not say why it had decided to recalculate its results under US rules.

But an increasing number of companies in the United States have been restating their profits.

The new figures show DoCoMo's sales increased 10.7% to 5.17 trillion yen, after a 25% rise the previous year.

Operating profits also rose - by 28.5%, half the 52.9% seen in 2000-2001.

Foreign headaches

But DoCoMo's adventures overseas were the real cause of the loss reported on Wednesday.

Its investments include KPN Mobile, the beleaguered Dutch operator, KG Telecoms in South Korea, AT&T Wireless in the US, UK third-generation venture Hutchison and its joint venture with AOL Time Warner.

In all, the cost to DoCoMo under GAAP was 624.6bn yen - more than enough, along with a tax load of almost 400bn yen, to push the company into the red.

See also:

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