Japan-headquartered mobile operator KDDI posted solid results for its fiscal Q4 2018, with a surge in profit despite a dip in mobile revenue amid an increasingly competitive environment.
The operator’s net profit for the quarter, which ran to end-March, rose 8.9 per cent year-on-year to JPY82 billion ($748 million), with consolidated revenue up 4.5 per cent to JPY1.28 trillion.
Mobile revenue, including MVNO contributions, fell 1.1 per cent in the quarter from the prior-year period to JPY437 billion. MVNO turnover increased 29 per cent to JPY8.2 billion as subscribers rose by 866,000 to 1.78 million. Handset sales increased nearly 17 per cent to JPY249 billion.
KDDI president Makoto Takahashi said in a statement that over the past two years the environment surrounding the domestic telecoms market had changed dramatically, with the services provided by the country’s major mobile operators becoming homogenised, while low-cost smartphones supplied by MVNOs have spread.
“Even as the three major operators have entered into other fields outside of telecoms seeking to create new earnings, companies of various industries have entered the mobile market as MVNOs, thrusting the industry into an era of competition across industry boundaries. We expect to see this competition heat up even more intensely [this fiscal year],” he said.
The operator added 3.74 million mobile subscribers over the past year to end March with 52.3 million. Average revenue per account (ARPA) inched up by JPY60 year-on-year to JPY6,410 at the end of the quarter.
KDDI expects capex to rise slightly in the current fiscal year to JPY570 billion compared with JPY561 billion in fiscal 2018.
Operating revenue for fiscal 2019 is forecast to increase to JPY5.15 trillion from JPY5.04 trillion in FY2018, with the full-year net profit rising to JPY620 billion from JPY573 billion in the year to end-March.