Nippon Telegraph and Telephone (NTT), Japan's top telecommunications company, reported an 18.5% dip in profit for the first fiscal quarter on continuing declines in income from its fixed-line business.
Costs to promote its broadband Internet services as well as its mobile operations also hurt group net profits at Tokyo-based NTT, which posted a 144.7 billion yen ($1.3 billion) profit in the April-June quarter, down from 177.6 billion yen ($1.55 billion) the same period the previous year.
Quarterly sales inched up 0.9% to 2.62 trillion yen ($22.9 billion) from 2.6 trillion yen ($22.7 billion) a year earlier.
Gains that NTT scored in revenue from Internet data transmission weren't enough to offset its lagging fixed-line business.
Although NTT's mobile carrier unit NTT DoCoMo still dominates the Japanese market, and the service still continues to grow, that operation saw its profit slide 21% in the latest quarter, despite rising revenue.
Expenses at NTT DoCoMo were also higher, mostly related to selling new handsets, while service prices have been plunging because of intensifying competition.
NTT, a former government monopoly, kept its forecast for the full fiscal year ending March 31, 2007, unchanged at 500 billion yen ($4.4 billion) profit on 10.8 trillion yen ($94.3 billion) sales.