DoCoMo net profit up 37%, maintains forecast

31 Oct 2008

Japan’s leading wireless carrier by subscribers NTT DoCoMo has reported a 37% rise in net profit for its fiscal second quarter ended 30 September on lower handset subsidies and buying costs, and maintained its full-year profit forecast. Reuters reports that DoCoMo’s profit increase comes in the wake of its November 2007 decision to introduce a new business model that cut handset subsidies and locked customers in on longer plans, albeit with the fillip of instalment payment plans. DoCoMo’s rivals KDDI and Softbank have introduced similar business models, with the former last week reporting a 27% rise in quarterly profit for the three months to 30 September, while Softbank said profit in the period increased 7% year-on-year. DoCoMo however, notes that the new strategy has reduced handset sales and has cut its sales and profits targets accordingly. Nonetheless, operating profit in the period under review rose to JPY280.5 billion (USD2.85 billion), from JPY204.6 billion a year earlier, although revenues dipped 4% to JPY1.1 trillion. For the full-year to 31 March 2009 the cellco is forecasting operating profit of JPY830 billion, below the JPY866 billion projection in a poll of 15 analysts by Reuters.