2012/01/27

Japan telecom bosses take pay cuts for system woes

TOKYO, January 27, 2012 (AFP) - The president and five other top executives of Japan's biggest mobile phone operator will take pay cuts to apologise for a series of network troubles, NTT DoCoMo said Friday.

The firm admitted that it has struggled to deal with growing data traffic as smartphones boom in popularity, and pledged fresh investment to tackle the issue.

President Ryuji Yamada will have his remuneration reduced by 20 percent for three months while the other executives will take a 10 percent trim over the same period, NTT DoCoMo said in a statement.

The cuts were "a clear means of taking responsibility for causing the series of network malfunctions, and leakage of personal information," it said.

NTT DoCoMo's most recent network problem came on Wednesday after the company renewed equipment to boost data processing capability, leaving 2.52 million subscribers offline for several hours.

In December, it suffered disruptions to its smartphone e-mail service, leading to a system glitch in which e-mail senders' addresses were replaced by those of other users.

The firm plans to invest 164 billion yen ($2.1 billion) by March 2015 to beef up its network and try to stabilise operations "in line with the rapid increase in the number of smartphone users," it said.

NTT DoCoMo is trying to grab a bigger slice of Japan's expanding smartphone market, but faces stiff competition from rivals Softbank and KDDI, both of which offer Apple's hugely popular iPhone, which it does not.

The firm, which is part of the Nippon Telegraph and Telephone group, separately said its net profit for the nine months to December fell 11.1 percent from a year earlier to 394.6 billion yen.

Operating profit fell 1.9 percent to 743.8 billion yen for the period on revenue of 3.17 trillion yen, down 1.1 percent.

NTT DoCoMo slightly downgraded its full-year net profit forecast from 514 billion yen to 474 billion yen due to corporate taxation changes.