DOCOMO books 8% fall in net income in fiscal first quarter

28 Jul 2017

Tokyo-based NTT DOCOMO has published its latest financial results, showing the carrier booked net income (attributable to shareholders) of JPY189.939 billion (USD1.708 billion) for the three months ended 30 June 2017, down 8.2% from JPY206.854 billion in the same period a year ago, as operating revenue increased 2.5% to JPY1.137 trillion from JPY1.109 trillion, mainly due to an increase in optical-fibre broadband service (‘docomo Hikari’) revenues on the back of user volume growth, as well as the recovery of mobile communications services revenues as a result of growth in packet consumption and a decrease in the negative impact of the cellco’s ‘Monthly Support’ discount programme. Operating income for the three months under review declined by 7.0% to JPY278.299 billion, and pre-tax earnings dipped 4.6% to JPY281.846 billion as Japan’s largest wireless operator by subscribers noted that competition in the domestic telecommunications market has intensified, due to the government’s pro-competition policy, the rise of low-cost smartphones offered by MVNOs and other factors.

The company noted that operating expenses from its telecoms business increased by JPY49.0 billion, or 6.1%, to JPY858.400 billion, due primarily to an increase in expenses associated with the expansion of docomo Hikari revenues, an increase of the sales commissions incurred for agent resellers due to growth in the total amount of smartphones sold and an increase of depreciation expenses.

NTT DOCOMO closed out 30 June 2017 with a total of 75.114 million mobile subscribers, up 4.9% on an annualised basis, of which some 45.659 million were 4G (branded ‘Xi’, up 14.5%) and 29.455 million were 3G (‘FOMA’, down 7.1%). In the three-month period under review DOCOMO sold a total of 5.849 million handsets, broken down as 2.305 million new Xi subscriptions, 763,000 upgrades from FOMA 3G services, 2.090 million upgrades from existing Xi subscriptions, 445,000 new FOMA subscriptions, 7,000 downgrades from Xi to FOMA and 239,000 FOMA upgrades from existing FOMA subscriptions. The average churn rate of 0.67% was up from 0.62% year-on-year, while average monthly ARPU of JPY4,600 marked a 6.2% improvement y-o-y. Average monthly minutes of use (MOU) was unchanged at 136 minutes.