TOKYO (AP) -- Profit at Japan's top mobile phone carrier NTT DoCoMo Inc. fell 25 percent in the most recent quarter as operating expenses increased amid intensifying competition.

Net income totaled 122.8 billion yen (US$1.03 billion (euro0.75 billion) in the April-June quarter, compared with 163.5 billion the same period a year earlier, the company said in a statement Friday.

Sales fell 2.9 percent to 1.183 trillion yen (US$9.94 billion; euro7.24 billion) from 1.219 trillion.

DoCoMo left unchanged its full-year earnings forecast ending March 2008. It predicts a net profit of 476 billion yen (US$4.00 billion; euro2.92 billion) on sales of 4.728 trillion yen (US$39.73 billion; euro28.95 billion), up 1.3 percent.

DoCoMo, which still dominates Japan's wireless phone market with 54 percent, is facing tough competition from rivals like KDDI Corp. and Softbank Corp., particularly since the October 2006 launch of number portability, which allows people to use their phone numbers even if they switch carriers.

The carriers also eagerly try to sign up more customers by offering high-speed, next generation services to earn higher profits.

Tens of millions of Japanese use mobile phones to exchange e-mail, download music and games, search for shops and access the Internet.

In the most recent quarter, DoCoMo said it spent 633.5 billion yen (US$5.32 billion; euro3.88 billion) in non-personnel expenses, up 4 percent from the same quarter of 2006, as part of its sales promotion drive of its new FOMA 904i series handsets.

The new handsets feature a "2in1" service, which allows users to carry two phone numbers and two mail addresses with a single handset and a "Chokkan Game" that is played using intuitive motion.

Also affecting DoCoMo's revenues and operating income was an increase of 7.8 billion yen (US$65.55 million; euro47.77 million) in depreciation and amortization under an accounting change of depreciation methods, the company said.

DoCoMo had 52.8 million subscribers out of the country's total 98.06 million cell phone users, as of June 30, 2007, according to the nonprofit Telecommunications Carriers Association.

KDDI came in second with 28.71 million and Softbank had 16.44 million subscribers.

NTT DoCoMo shares closed 2.3 percent down to 170,000 yen (US$1,428.57; euro1,041.08) on the Tokyo Stock Exchange Friday.