3G hinders DoCoMo's quarterly figures

August 1, 2004

Japan's NTT DoCoMo reported last Friday a 13.4% decline in quarterly net profit as fierce competition hurt its revenue, but remains confident of meeting its earnings forecast for the year.

Its net profit for the quarter ending June 30 fell to 170.38 billion yen from 196.8 billion yen a year earlier. Operating profit also fell 18% to 276.58 billion yen. Revenues fell 2.5% to 1.22 trillion yen from 1.25 trillion a year ago. (£1 = 194.94 yen)

Revenue has been hampered by the introduction of a fixed-rate data plan for its 3G FOMA service and price cuts for data services. DoCoMo is offering 10,000 yen more in subsidies for it 3G phones than on other models.

Despite positive subscriber growth, "cellular revenues decreased due to a decline in ARPU (average monthly revenue per unit) reflecting a reduction in rates".

DoCoMo left its forecast for the year to March 2005 unchanged. It is estimating a record net profit of 751 billion yen with pre-tax profit of 1.31 trillion yen.

The company expects operating profit to fall to 830 billion yen from 1.1 trillion yen a year earlier and revenue to decline 2.5% to 4.92 trillion yen.

DoCoMo had 46.4 million customers at the end of June and surpassed the 5 million mark for its 3G service in the middle of July.