Japan’s biggest mobile network operator in terms of subscribers, NTT DOCOMO, has lifted its full year profit forecasts after recording a strong first half performance. The cellco is now targeting net income of JPY490 billion (USD4.06 billion) for the financial year ending 31 March 2016 (FY2015), up from an earlier forecast of net profit of JPY470 billion. DOCOMO, the mobile arm of Japan’s former state-owned monopoly Nippon Telegraph & Telephone Corp (NTT Corp), reported the renewed profit guidance on the back of a JPY42 billion, or 1.9%, increase in operating revenues to JPY2.215 trillion, despite what it termed ‘the lasting negative impact from the “Monthly Support” discount programme’, as operating income climbed by 15.8% to JPY462.6 billion. Operating expenses, on the other hand, fell 1.2% in the first half of the fiscal year to JPY1.752 trillion, attributed to ‘decreases in selling expenses and network-related costs as a result of cost efficiency improvements’, which helped offset an increase in costs associated with increased revenues in DOCOMO’s smart life and other businesses. As a result, net income increased by JPY57.6 billion (22.2%) year-on-year to JPY317.1 billion, yielding a 5.8% return on income – up 1.1 percentage point on the corresponding period a year ago. CAPEX reached JPY219.5 billion, down 25.0% y-o-y, as DOCOMO continued to expand the service coverage of its LTE network. In the first six months of the current financial year, the cellco increased the number of LTE-enabled base transceiver stations (BTS) to 115,400 nationwide (as of 30 September 2015), of which the number of BTS compatible with its ‘PREMIUM 4G’ branded service – launched in March 2015 and based on LTE-A technology – was expanded to 7,700, providing service in 640 cities across Japan. Further, the operator notes that in September this year it launched a new service offering downlink speeds of up to 262.5Mbps in selected areas of Tokyo, Osaka and Nagoya.
On the operational front, DOCOMO closed out September 2015 with a total of 68.494 million mobile users, up 6.5% (a net 4.199 million) from 64.295 million a year earlier, of which 34.504 million were 4G (Xi) subscribers, up 31.6%, and 33.989 million were on its FOMA 3G network (down 10.7%). The carrier sold 12.041 million handsets in the six-month period, up 10.0%, the majority of which (>7.4 million) were either new Xi subscriptions or 4G handset upgrades. Churn rates were unchanged at 0.58% and monthly blended ARPU eased to JPY4,100 from JPY4,160 previously, despite a 2.9% increase in data ARPU to JPY2,920.