KDDI revenue, profits climb on mobile growth and non-telecoms business

6 Nov 2019

KDDI (au), Japan’s second largest telecoms operator by subscribers, reported that consolidated operating revenue rose 6.3% year-on-year to JPY1.318 trillion (USD12.2 billion) for its fiscal second quarter ending 30 September 2019, as solid growth in subscribers, mobile revenue and ARPU combined with a strong performance from its non-telecoms (e.g. financial, energy) business. Operating income reached JPY297.607 billion from JPY272.330 billion in the corresponding period of 2018 and EBITDA rose 14.1% to JPY470.756 billion; EBITDA margin was 35.7% (up 2.4 percentage points on an annualised basis). However, operating profit declined 1.4% to JPY553.407 billion, due to costs related to measures taken to keep clients before the introduction of the new rules on bundling provisions. On 1 October 2019 the revised Telecommunications Business Law took effect in Japan, obliging mobile network operators to charge communications fees and handset prices separately, meaning that customers can purchase smartphones from carriers without subscribing to their respective communications services.

KDDI’s Personal Services segment contributed revenue of JPY1.149 trillion, compared to JPY1.076 trillion in 2Q18, broken down as ARPA revenue (JPY569.363 billion), MVNO revenue (JPY15.693 billion), Fixed-line revenue (JPY198.284 billion), Handset revenue (JPY160.668 billion) and Other (JPY183.278 billion). The consumer segment also saw operating income rising 5.3% y-o-y to JPY250.620 billion, as EBITDA climbed to JPY405.047 billion from JPY361.307 billion previously. Further, KDDI’s Business Services segment also reported steady growth with revenue rising 6.7% to JPY233.918 billion, operating income up to JPY45.313 billion and EBITDA rising to JPY64.853 billion from JPY49.976 billion in the year-earlier quarter.

The carrier closed out September 2019 with a total of 57.279 million KDDI au subscriptions, up from 56.368 million at the end of June, while FTTH connections increased from 4.555 million to 4.597 million. Additionally, the group’s WiMAX division UQ Communications reported 33.828 million users on its books at end-September 2019, up from 33.336 million in June 2019.

KDDI, which deployed its first fifth-generation base stations in September, plans to launch commercial 5G services at end-March 2020 and aims to deploy 50,000 sites by 31 March 2023.

Japan, KDDI (au)