DoCoMo subscriber gains hit profits

29 Oct 2004

Japan’s largest wireless operator NTT DoCoMo has seen interim net profits fall 6% as it concentrates on winning more 3G subscribers. At the end of September 2004 the company’s net income fell to JPY335.2 billion (USD3.2 billion) compared to JPY356.4 billion in the same period last year. Revenues were down 3.3% to JPY2.45 trillion (USD23.4 billion), with full-year sales forecast at JPY4.82 trillion, down 4.5% year-on-year.

DoCoMo is keen to increase customer uptake for its FOMA 3G service and has been offering extra incentives to retailers to encourage them to push its latest range of handsets and flat-rate tariffs. Profits were also hit by increased marketing costs and lower service revenues. Average revenue per user (ARPU) across all services stood at JPY7,370 at the end of September, down from JPY7,890 in March. ARPU from FOMA services fell from JPY10,280 to JPY10,030, while non-3G ARPU dropped from JPY7,830 to JPY7,070.

Fortunately for DoCoMo the push to sign up 3G customers has met with some success; at the end of September it had 6.49 million FOMA subscribers, more than double the total at the end of March. Total customer numbers were up from 46.33 million to 47.36 million over the six months.