DoCoMo’s full year profits slide on 3G-related costs

27 Apr 2007

Japan’s leading mobile operator by subscribers, NTT DoCoMo, says its full year net profit fell by 25% in the year to 31 March 2007, compared with a year earlier, as increased costs related to its efforts to migrate users to 3G services in an intensely competitive domestic mobile market, undermined its bottom line. DoCoMo posted net income of JPY457.3 billion (USD3.84 billion) in the twelve-month period, down from JPY610.5 billion in fiscal 2005-06. Operating profit dipped 7% to JPY773.5 billion, despite a marginal 0.5% rise in revenues to JPY4.79 trillion. Operating costs were up 2.1% at JPY4.01 trillion as the operator upped spending to entice users on to its FOMA network, and spent more to combat the threat of mobile number portability – introduced in October 2006. The cellco’s net profits were also impacted by the absence of one-off gains, which bolstered the firm’s fiscal 2005-06 performance. In the company’s last financial year, DoCoMo booked a one-time gain of JPY62 billion from the sale of its 20% stake in Hutchison 3G UK Holdings Ltd.

At the end of March 2007 DoCoMo said the number of subscribers to its 3G service reached 35.53 million, accounting for 67.5% of the total of 52.64 million. The cellco aims to have 80% of its subscribers using its FOMA service by the end of March 2008.