NTT Corp H1 net income slips 0.8%, but operating revenues inch up; plans JPY3tn investment in 5G

7 Nov 2018

Nippon Telegraph and Telephone Corp (NTT Corp) has published its consolidated financial results for the six months ended 30 September 2018, highlighting that net profit fell 0.8% to JPY559.726 billion (USD3.779 billion), down from JPY564.079 in the corresponding year-ago period, as operating revenues rose 1.8% to JPY5.793 trillion from JPY5.691 trillion and operating profit climbed 3.1% to JPY1.071 trillion from JPY1.038 trillion. EBITDA for the six-month period improved to JPY1.752 trillion from JPY1.733 trillion; EBITDA margin was 30.2%, down 0.2% y-o-y compared to 30.4% previously. The carrier said it had made ‘steady progress toward’ achieving its annual plan, noting that ‘both operating revenues and operating income increased to highest-ever 2Q levels’.

Looking ahead, for the full year NTT Corp expects attributable net income of JPY880 billion, unchanged from its initial forecast. However, it has revised upwards its full year operating revenue which is now expected to be JPY11.900 trillion, up from JPY11.830 trillion previously, while its forecast for operating income is unchanged at JPY1.690 trillion.

Operationally speaking, NTT Corp closed out September 2018 with a total of 21.541 million high speed broadband subscribers, up from 21.235 million at September 2017, broken down as 690,000 FLET’S ADSL connections (down from 849,000), 20.851 million FLET’S Hikari fibre-optic broadband subscriptions (compared to 20.386 million) and 18.154 million IP telephony Hikari Denwa accounts (17.924 million). The group’s mobile arm NTT DOCOMO reported 77.050 million 3G and 4G mobile subscribers at the same date – up from 75.361 million a year earlier – of which 52.502 million are Xi-branded LTE users and the remainder using its FOMA (3G) service.

In terms of its future investment plans, the group plan to invest JPY3 trillion over the next five years on advanced research activities and next generation 5G mobile communications networks at mobile arm NTT DOCOMO. Under its medium-term business strategy, unveiled 6 November, the telecoms behemoth will also seek to strengthen its overseas businesses through the reorganisation of group units and cut JPY800 billion in costs over the next five years.

TeleGeography notes that earlier this month DOCOMO president and CEO, Kazuhiro Yoshizawa, was quoted as saying that the Japanese carrier aims to launch a pre-commercial 5G service in September 2019. In a conference call with investors and analysts, Yoshizawa also said that the operator plans to deploy full-blown commercial 5G services across Japan by mid-2020, with customers able to experience 5G services during the Rugby World Cup 2019. DOCOMO has already signed up some 1,800 partners to its 5G Open partner programme, through which it aims to create 5G-based solutions, and expects to have boosted this to 5,000 by the end of 2021.