KDDI reports fall in profits, but raises full year forecast

25 Jan 2007

Japan’s second largest mobile operator by subscribers KDDI has reported a 4.7% drop in net profits for the three months to 31 December, partly the result of higher spending on incentives to win mobile users from rivals NTT DoCoMo and Softbank Mobile following the introduction on mobile number portability (MNP) on 24 October. Operating profit stood at JPY86.63 billion (USD713.8 million) in the three months under review, down from JPY90.9 billion a year earlier, as retailer commissions for handset sales and other costs jumped. Nonetheless the operator signed up more new subscribers than its rivals in the post-MNP regime and in December alone, KDDI added a net 297,500 mobile users, compared with just 97,000 new additions at Softbank and a net loss of 87,600 for DoCoMo – its first loss ever.

KDDI says it has lifted its forecasts for the full year to 31 March 2007. It has upped its operating profit forecast to JPY342 billion (USD2.84 billion) from an earlier estimate of JPY318 billion. The market expects KDDI’s annual profit to reach JPY331.2 billion this year, according to a poll of 18 analysts commissioned by Reuters.

Japan, KDDI (au)