(Associated Press via NewsEdge) NTT DoCoMo said its profit dropped 21% in the last quarter, as rising expenses helped offset increased revenues.
Net income fell to 163.5 billion yen ($1.41 billion) in the April-June period, the company's fiscal first quarter, compared with 207.9 billion yen ($1.8 billion) a year earlier, the Tokyo-based company said in a statement.
Sales rose 2.7% to 1.22 trillion yen ($10.5 billion), from 1.19 trillion yen ($10.3 billion).
Competition to win customers in Japan's cutthroat cell phone market is intense despite the ballooning costs to develop new mobile technologies. Handset prices decline quickly, making it difficult for companies to make profits.
Millions of Japanese use mobile phones to exchange email, search for restaurants, looks up train schedules, store photos and listen to music. Earlier this year, a service began that allows users to watch digital TV on some handsets.
First-quarter profit at DoCoMo was partly eroded by a 46.4 billion yen ($400 million) increase in operating expenses in the period, more than 60% of which were related to selling new handsets
But the percentage of subscribers using DoCoMo's more lucrative FOMA high-speed service continued to make progress as more customers shifted from cheaper services. Just over half of DoCoMo's 51 million users now subscribe to FOMA.
DoCoMo has been banking on new services to drum up revenue as it fends off tougher competition and falling phone rates.
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