KDDI, the second largest mobile operator in Japan, reported mixed results for its fiscal Q2 ending 30 September, with its profit falling slightly and revenue gains driven by value added services (VAS), and growth in subscribers and average revenue per account (ARPA).
The operator’s fiscal Q2 net profit dipped 1.9 per cent year-on-year to JPY156 billion ($1.38 billion) due, in part, to a rise in strategic investments aimed at generating future growth, KDDI said in its earnings statement.
Consolidated operating revenue increased 3.9 per cent to JPY1.22 trillion. The company said the gain was driven by a small rise in mobile turnover, higher revenue from its growing VAS business, which includes e-commerce site au Wallet Market, along with an increase in revenue from its Myanmar venture with state-run MPT.
Mobile ARPA rose 2.2 per cent year-on-year to JPY5,970 in the recent quarter, while mobile subscriptions increased by about 2.5 million to 49.7 million. The number of MVNO subscribers over the same period rose by 240,000 to 1.3 million.
KDDI’s VAS business reported an 18.6 per cent year-on-year increase in operating revenue to JPY124 billion during the quarter. It said the growth was mainly due to higher turnover from app service au Smart Pass and revenue growth in the commerce and settlement businesses generated by its au Wallet prepaid credit card.
The number of valid au Wallet cards increased 11 per cent year-on-year to 21.8 million at end-September.
KDDI, with a 24 per cent market share, said it achieved 57.1 per cent of its consolidated operating income target for the full fiscal year ending 31 March 2018 during the quarter.