Japanese mobile operator NTT DoCoMo has agreed to pay USD443 million for a 7% stake in the Philippines’ largest telecoms company Philippine Long Distance Telephone (PLDT). The move is the latest in a series of acquisitions made by the Japanese cellco, which was badly burnt when its previous international investments turned sour. On 21 December 2005 DoCoMo announced it was to pay USD560 million for a 10% stake in South Korean counterpart KT Freetel (KTF). The deal, the largest overseas investment by a Japanese firm since 2001, was made through the allocation of new shares and the acquisition of KTF treasury stock. The strategic tie-up between the two cellcos is designed to help speed up the proliferation of W-CDMA technology, pioneered by DoCoMo. KTF, which controls more than 30% of the Korean mobile market, has made it clear that its strategy is focused on developing W-CDMA.
NTT DoCoMo also reported a 7.7% drop in profits to JPY693.48 billion (USD5.89 billion) for the first nine months of the fiscal year, but declined to revise its full-year forecast for the full year to March 2006 (JPY830 billion), saying its overall performance was being driven by strong demand for its high speed 3G service FOMA. At the end of December 2005 around 40% of the cellco’s 50.4 million-strong subscriber base was signed up the service. DoCoMo has benefited from strong customer growth, low churn and solid ARPU due to a lull in price-cutting competition in the country. However, in a sign that this could soon change, the operator said it planned to expand the availability of its flat rate 3G data offerings from March this year. As it stands, DoCoMo’s all-you-can-use data plan is available only to customers who paid at least JPY6,930 a month for voice service. However, it will shortly offer the same plan to all FOMA users on contract plans introduced after November 2005.