DOCOMO ‘off to a good start’ in 2016 as revenues, profits climb

29 Jul 2016

Japan’s biggest mobile network operator (MNO) by subscribers NTT DOCOMO has published its financial results for the quarter ending 30 June 2016 (1Q FY2016), showing that operating revenues climbed 3.0% to JPY1.109 trillion (USD10.57 billion), operating income increased to JPY299.3 billion from JPY235.4 billion, and net income rose 22.6% to JPY206.9 billion. Further, the wireless carrier reported that operating expenses were trimmed by around JPY32 billion to JPY809.4 billion. DOCOMO reported solid performance from each of its three main operating divisions, with its Telecommunications business contributing operating income of JPY270.4 billion (up 27.3% y-o-y) on revenue of JPY894.9 billion, Smart Life generating operating income of JPY17.2 billion (+1.9%) and its ‘other’ businesses chipping in with income of JPY11.7 billion. CAPEX in the company’s fiscal first-quarter stood at JPY97.1 billion.

Operationally, the MNO closed out June with a total of 71.614 million mobile subscribers, representing a 6% increase on an annualised basis, noting too that the total number of smartphone/tablet users signed up to its services climbed 13% y-o-y to 33.44 million. Churn, however, edged upwards to 0.62% from 0.59% amid intensified competition due to what the carrier terms ‘the government’s pro-competition policy, market entry by MVNOs and other factors’. To drive take-up of 4G services, the MNO expanded the coverage of its ‘Premium 4G’ service to 1,203 cities across Japan and 30,900 base stations as of 30 June 2016. Furthermore, from June 2016 it added a new carrier channel, at 3.5GHz, compatible with carrier aggregation (CA) technology, which it says allows it to offer a higher quality network service to end users. The total number of LTE-enabled base stations stood at 143,500 nationwide at the same date, as the number of 4G (Xi brand) subscriptions increased to 39.893 million from 32,609 million at end-June 2015.

Finally, the company reported that its fledgling fibre-optic broadband service ‘docomo Hikari’ – launched in March 2015 – had amassed a total of 2.07 million users by the end of June, a five-fold increase from the 410,000 figure reported the previous year.