Japan’s KDDI reported strong results for the first half of fiscal 2015 as smartphone penetration passed the 50 per cent mark and ARPU continued to climb slowly.

The 3.8 per cent increase in its revenue to JPY2.13 trillion ($19.5 billion) was driven by higher data revenue during the April to September period. The company added 2.5 million mobile subscribers from a year ago and increased smartphone penetration to 52 per cent of its user base.

Its net income jumped 41.9 per cent to JPY231 billion ($2.1 billion), but almost half of the rise was attributed to an extraordinary loss from a year ago.

Operating expenses rose 2.4 per cent to JPY1.74 trillion year-on-year, which was mainly due to an increase in the country’s communication facility fee as well as higher depreciation and amortisation of its LTE network.

KDDI, Japan’s number two mobile player with a 26 per cent market share, said revenue from handset sales fell as it sold just 3.9 million units in H1 compared to 4.5 million during the same period a year ago. And because a higher percent of sales were smartphones, the handset discount increased by JPY110 to JPY1,040 per unit.

Overall ARPU increased JPY60 to JPY4,280 from a year ago (H1 2013), which the company said maintains the positive momentum since it reversed the downward trend in Q4 of the last fiscal year. Data ARPU rose JPY260 to JPY3,450 while voice ARPU was down JPY90 to JPY1,870. It reported a churn rate of 0.63 per cent for H1.

To support its LTE carrier aggregation network launched in May, it said it has deployed more than 10,000 base stations and plans to roll out another 10,000 by the end of December.

During H1 it added 260,000 FTTH customers, bringing its total to 3.29 million.