Mobile phone company NTT DoCoMo will fall into the red for the first time after writing off the value of its overseas investments.
The telco had been attempting to enter the European market through companies like AT&T Wireless, KPN Mobile of The Netherlands, Hutchison 3G UK Holdings and Taiwan's KT Telecommunications, all of which suffered during the downturn in the market.
By writing off the losses in these companies, DoCoMo will be admitting to losses of between Y100bn (£522m) and Y150bn (£783m), compared with a net profit of Y365.5bn (£1.9bn) last year.
It is also likely to lead to a substantial net loss at parent company NTT.
Analysts at Credit Suisse First Boston expect DoCoMo to post extraordinary losses of between Y850bn (£4.4bn) and Y1,500bn (£7.8bn) on all its overseas investments.
In a report the analysts said that it made sense to perform the write off this year as it would not have too much impact on the company.
Almost every other firm in the sector is having to do the same thing, and writing the losses off means that DoCoMo can start the financial year with a clean slate and report a good profit next year.
Investors responded well to the news as a hint of the write off sent shares up by 3.8 per cent.
DoCoMo, which earlier this month listed on the London and New York stock exchanges, plans to introduce third-generation services overseas this year.
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