TOKYO (AFP) - NTT DoCoMo has warned that increasingly cut-throat competition in Japan's cellphone market would leave a big dent in its profits this year as its first-half earnings slumped almost 20 percent.

With recent changes to industry rules making it easier for customers to change mobile operators, NTT DoCoMo warned that conditions were likely to get even tougher and forecast a steep fall in earnings this year.

Company president and chief executive Masao Nakamura even accused newcomer Softbank of misleading customers with advertisements suggesting its larger rivals overcharge for their services.

Net profit dropped 19.6 percent to 309.82 billion yen (2.62 billion dollars) in the six months to September compared with a year earlier when the group booked large gains from the sale of shares in Hutchison 3G UK Holdings.

Operating profit fell 7.4 percent to 516.89 billion yen as revenues rose 0.4 percent to 2.38 trillion yen, helped by the introduction of new handsets with credit card functions and built-in music players.

Nakamura said the operator would "strive to achieve" its target of 810 billion yen in operating profit for the full year amid intensifying rivalry for customers and increasing costs from the shift to third-generation services.

DoCoMo expects a full-year net profit of 488 billion yen, down 20.1 percent from a year earlier, on revenue of about 4.80 trillion yen, up 0.7 percent.

"The number of handsets sold was smaller than we initially estimated, which translated into a cut of 33 billion yen to operating revenue," Nakamura said.

He promised to continue the firm's cost cutting efforts to offer cheaper services to customers.

"While the competitive environment is expected to become increasingly fierce, we aim to build our competitiveness by responding swiftly to the changes in the market," Nakamura said.

The market leaders plans to introduce 20 new handsets over the next six months.

An industry shake-up this week allowing Japanese to keep their phone number when switching mobile providers has prompted a fierce battle for customers.

Softbank Corp -- which recently bought British giant Vodafone's Japanese operations -- announced an aggressive discount package as it attempts to catch up with larger rivals NTT DoCoMo and KDDI.

But Nakamura said Softbank's campaign had falsely portrayed its rivals, essentially NTT DoCoMo, as over-charging.

"If you read the fine prints in Softbank's advertisement, you will see there are so many conditions attached to their so-called discount deals," he said.

"We are appalled by their approach and falsely characterizing Japanese mobile phone operators for over-charging. After closely reviewing Softbank's services, I see no reason for our customers to leave us for their deals.

"If mobile users are lured by Softbank's campaign, they will soon find out that they were given false promises," Nakamura said.