DoCoMo 4Q net income down 38% on competition

28 Apr 2011

Japan’s largest mobile operator by subscribers, NTT DoCoMo, said its fourth-quarter net income slumped 38% year-on-year, amid intense competition for new users in the domestic market. The cellco, the wireless arm of Nippon Telegraph & Telephone Corp (NTT), booked net profit of JPY45.5 billion (USD554.6 million) for the three months ended 31 March 2011, compared with JPY75.4 billion in the corresponding year-earlier period. DoCoMo’s operating profit for the January-March 2011 quarter declined 34% y-o-y from JPY131.6 billion to JPY86.2 billion, on revenue that dipped to JPY1.015 trillion from JPY1.042 trillion previously. For the full year, DoCoMo said revenue was down 1.4% at JPY4.224 trillion and net income fell 0.9% to JPY490.5 billion. Full year operating profit however, rose 1.3% y-o-y to JPY844.7 billion. The cellco is now forecasting net profit of JPY502 billion, operating profit of JPY850 billion and revenue of JPY4.23 trillion for its current financial year.

NTT DoCoMo is facing a renewed challenge from its main rivals, and in particular number three player Softbank Mobile. As reported in CommsUpdate earlier this month, Softbank Mobile added the most net new mobile users of any of Japan’s network operators in the year to 31 March 2011, eclipsing DoCoMo which achieved that feat in the previous year. Softbank added a net 3.532 million contracts in the twelve months to 31 March 2011, compared to a little under 1.928 million for DoCoMo. Meanwhile, KDDI Corp’s au service took third spot thanks to net gains of around 1.127 million, with eMobile in fourth at 766,100. In March 2011 alone Softbank topped the list for the twelfth month in succession with 498,100 new customers – aided by the popularity of the iPhone 4 device.