DoCoMo H1 net profit drops on higher 3G costs

27 Oct 2006

Japan’s leading wireless carrier by subscribers NTT DoCoMo has posted a 20% drop in net profits for the fiscal first half year ended 30 September, on the back of rising costs related to its efforts to migrate customers to its 3G mobile platform. In a statement the company said net profits for the six-month period fell to JPY309.8 billion (USD2.6 billion), down from JPY385.3 billion in the corresponding year-ago period, and operating profit fell 7.4% to JPY516.9 billion, despite a 0.4% rise in revenues to JPY2.38 trillion. Operating costs were up 2.8% at JPY1.87 trillion as DoCoMo spent more to encourage a speedier transfer of customers to its 3G network FOMA and on preparing for the introduction of mobile number portability (MNP) from 24 October. The drop in net profits was due in part to the absence of the one-off gains reported in the first half of last year when DoCoMo booked a special capital gain of JPY62 billion from the sale of its 20% stake in Hutchison 3G UK Holdings Ltd.

At the end of September DoCoMo had 29.1 million people signed up to FOMA, or 55.8% of its total user base. It hopes to boost the proportion of 3G users to around 66.6% by the end of its fiscal year in March 2007.