(April 9, 2002) - What do you get if you cross a Japanese telecom colossus with a massive overseas investment program that yields nothing by way of immediate return? Answer: a $15.87 billion item labeled "special losses" on your annual accounts for 2001-2.

That is the largest ever charge taken by a Japanese company, save for those in the financial sector. But it is exactly what NTT, the Nippon Telegraph and Telephone Corp., unveiled this week. Fully 70% of the special losses are attributed specifically to its NTT DoCoMo mobile unit, reflecting the going south of its massive overseas investment program, conducted in alliance with NTT Communications, its long-distance and international subsidiary.

NTT DoCoMo's credit rating was unaffected, however, demonstrating that no one should yet write off i-mode itself, only that the $15.87 billion investments were made, after all, at the very height of the telco bubble. A profit recovery even as early as 2002/3 is not out of the question, as 2.5G and 3G networks come alive around the world.

What did the special losses do to DoCoMo's balance sheet? Well, the mobile giant reported its first ever net loss, and canceled directors' bonuses for the year, as well as shaving 20% off the salaries of President Keiji Tachikawa and NTT DoCoMo's Chairman, too.

The four main companies outside Japan with which DoCoMo has become financially involved, as reported throughout 2001 by WBT, are AT&T Wireless in the U.S., Hutchison 3G in the UK, KPN Mobile in Holland, and KG Telecom in Taiwan.

The writedown is calculated to end the uncertainty regarding the value of DoCoMo's overseas investments and allow the company to concentrate in 2002 on its home market, where the competition is increasing steadily amid Japan's deflationary market environment. NTT itself faces renewed pressure from the U.S. to lower mobile phone interconnection rates and provide what a recent U.S. government report calls "cost-oriented" and "reasonable" prices.