Continued price cuts hit Docomo financials - Mobile World Live

Continued price cuts hit Docomo financials

29 JUL 2019

NTT Docomo, the largest mobile operator in Japan, suffered a double-digit drop in profit and mobile revenue in its fiscal Q1 as new tariffs mandated by the government pushed ARPU lower for another quarter.

The operator’s net profit for the April to June period fell 11.9 per cent year-on-year to JPY192 billion ($1.77 billion). Operating revenue dipped 1.5 per cent year-on-year in the quarter to JPY1.16 trillion, with mobile service turnover falling 18.6 per cent to JPY700 billion. Equipment sales declined 6.1 per cent to JPY168 billion.

Broadband service revenue rose 17.5 per cent to JPY78.9 billion, while its smart life business recorded a 1.7 per cent increase in revenue to JPY111 billion.

The company, with a 38 per cent market share by subscribers, said it achieved only JPY20 billion of JPY130 billion in targeted cost savings for fiscal 2020.

Mobile subcribers increased 3 per cent year-on-year to 78.9 million. Nearly 5 per cent of its subs base moved to the new mobile pricing plans introduced on 1 June.

Mobile ARPU dipped marginally by JPY50 from fiscal Q1 2018 to JPY5,250 at end-June.

Capex for the period fell 21.7 per cent to JPY97.9 billion. The operator said it will deploy 5G services at eight stadiums and various other locations across the country for the Rugby World Cup starting 20 September.

In May and June Docomo repurchased 19.5 million shares worth about JPY48.2 billion and will spend another JPY252 billion on stock buybacks until April 2020.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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