KDDI’s net profits dip despite rising sales

24 Apr 2007

Japanese telecoms group KDDI reported a 2% dip in net income from JPY190.6 billion to JPY186.7 billion (USD1.61 billion to USD1.57 billion) in the year to 31 March 2007, despite a rise in operating income and revenue, driven by strong gains at its mobile unit. In the year to 31 March, KDDI reported a 9% increase in operating revenues from JPY3.06 trillion to JPY3.34 trillion and operating income climbed 16.2% to JPY344.7 billion, from JPY296.6 billion previously. KDDI said strong performances from its mobile operations, au Corp and TU-KA Group, offset declines from its fixed line operations, although their efforts failed to prevent a drop in full-year net income.

The group’s mobile operations posted operating revenues of JPY2.67 trillion, up 6.7% year-on-year, with au Corp contributing JPY2.61 trillion (+11%) and TU-KA JPY66.8 billion (-61.9%). Net profit from wireless operations stood at JPY209.5 billion, up 44% from JPY145.3 billion in fiscal 2006. KDDI said it added 816,000 net additions as a result of mobile number portability (MNP), which was introduced in October 2006, with au Corp reporting a net gain of 853,000 users and the soon to be phased out TU-KA losing a net 37,000 in the same period. KDDI had a total of 28.19 million mobile users at the end of March 2007, of which 14.55 million were au WIN (CDMA2000 1xEV-DO) users. ARPU for au Corp subscribers was JPY6,610 in 2006-07, down from JPY7,040 last year. More than three-quarters (77%) of the au WIN subscriber base are on flat-rate price plans, KDDI said. Churn was also down 0.18% year-on-year.

In the fixed line segment, KDDI said operating revenues rose by 15.3% to JPY714.4 billion on the back of increased sales of its Metal Plus voice calls service and the merger with Poweredcom. Operating losses were trimmed to JPY49 billion, from JPY61 billion previously, but this did not help prevent net losses reaching JPY23.4 billion, from a net income of JPY26.4 billion in fiscal 2006. KDDI started April 2007 with 2.81 million Metal Plus customers and as a result of the integration of TEPCO’s FTTH business, also counted 590,000 fibre users.

Japan, KDDI (au)