DoCoMo’s Q3 net profit slumps 29%; plans JPY160bn spend by 2015 to strengthen network

27 Jan 2012

NTT DoCoMo today released its preliminary financial results for its fiscal third quarter to 31 December 2011, showing a 29% year-on-year drop in net profit, and lowered its full-year outlook on the back of a decline in revenue from voice services and tax adjustments. The mobile carrier said net income for the three months under review fell to JPY95.60 billion (USD1.23 billion) from JPY134.24 billion in the same period a year ago, and noted a write-down in deferred tax assets due to a change in its corporate tax rate. DoCoMo said operating profit for October-December increased 3.6% year-on-year to JPY235.28 billion from JPYY227.03 billion, although revenue dipped 0.9% to JPY1.06 trillion. For FY2011/12, the carrier has lowered its forecast for net profit from JPY524 billion to JPY474 billion and has maintained its earlier projection for a 3.0% rise in operating profit to JPY870 billion and a 0.4% increase in revenue to JPY4.24 trillion.

In a separate development, DoCoMo says it is looking to spend JPY160 billion over the next three years to improve the resilience of its mobile network following a series of network failures in the last six months. Japan’s leading cellco by subscribers is struggling to contend with the explosion in data traffic generated by rising sales of smartphones. In the first phase DoCoMo intends to spend JPY4 billion by 31 March 2013 to correct network problems – the most recent of which took place this week. Going forward, the operator is ploughing a further JPY150 billion-plus in its infrastructure by 31 March 2012 to create a network capable of supporting more than 50 million smartphones.