Nov. 6 (Bloomberg) -- NTT DoCoMo Inc., Japan’s largest mobile-phone operator, aims to rely on dividend payments and strategic investments to raise its share price from record lows, Chief Financial Officer Kazuto Tsubouchi said.

“The dividend is our top policy choice, followed by investments in growth areas; buying back shares comes after that,” Tsubouchi said in an interview in Tokyo today. “The share price is just too low.”

DoCoMo fell to as low as 128,600 yen in Tokyo trading today, the lowest since listing in October 1998, as handset sales decline and industrywide data-transmission rate cuts sap profit. President Ryuji Yamada last week said the carrier may buy back shares if the stock falls to a record.

“There’s a sense of unease about the company because it lacks a clear strategy for the future” and profit is declining, said Shinji Moriyuki, an analyst at Mitsubishi UFJ Financial Group Inc. in Tokyo. Any share-price gains stemming from DoCoMo’s policies would be limited without a specific recovery plan, said Moriyuki, who has a “market perform” rating on the company.

The Tokyo-based company last week maintained its plan to increase its dividend payout 8.3 percent to 5,200 yen ($57) in the 12 months ending March 31, its first increase in two years. DoCoMo paid 4,800 yen last fiscal year.

Shares Bought Back

The carrier bought back 1.2 trillion yen worth of stock over the past five fiscal years, according to data on its Web site.

DoCoMo slid 1.1 percent to close at 128,700 yen on the Tokyo Stock Exchange. The stock has lost 27 percent this year, compared with a 10 percent gain by the benchmark Nikkei 225 Stock Average in the period.

Net income declined 21 percent to 137.3 billion yen in the three months ended Sept. 30, the company said last week, citing the impact of lower data rates. Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 17 percent to 233.4 billion yen in the period, as sales slumped 3.4 percent to 1.06 trillion yen.

The company last week trimmed its revenue forecast 2.4 percent to 4.276 trillion yen for the 12 months to March 31, citing a lower handset shipment target. DoCoMo aims to sell 18.2 million mobile phones this fiscal year, 7.6 percent fewer than its previous estimate and a 9.6 percent decline from a year earlier.

Earnings Outlook

Net income will probably climb 4.5 percent to 493 billion yen this fiscal year, DoCoMo said last week. Operating profit may slip to 830 billion yen from 830.9 billion yen a year earlier.

The carrier and Softbank Corp. and KDDI Corp. are offering cheaper plans to encourage data use as revenue from voice traffic declines. DoCoMo in August cut its basic monthly flat- rate plan tariffs 20 percent to attract users and help achieve its annual target of shipping 1 million handsets capable of surfing the Internet and downloading music, videos and software.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net; Yoshinori Eki in Tokyo at yeki@bloomberg.net.

Last Updated: November 6, 2009 02:38 EST