Japan’s largest operator NTT Docomo unveiled plans to set up a consumer service subsidiary to drive overseas growth.

In a statement, the company explained NTT Docomo Global will work with local partners to deliver operator-enabling services, covering open RAN and global space-based non-terrestrial networks, and application services, such as digital retail and finance offerings.

On an earnings call, CEO Motoyuki Ii (pictured, left) noted it will create a new company in July combining group-wide assets, including NTT Digital and its OREX joint venture with NEC.

In the initial phase, the new company will focus on Southeast Asia and North America, then look to Europe and the Middle East. In addition, its existing connected-services business will be expanded globally to meet customer needs.

Docomo Global plans to invest in companies with strong distribution channels and brand power in local markets to develop a diverse portfolio, the statement added.

The operator also reported fiscal Q4 (ending 30 March) results today (10 May), offering a conservative outlook for fiscal 2024: net profit stable at JPY799 billion ($5.1 billion) and operating revenue up 1.7 per cent to JPY6.24 trillion. Revenue for its consumer business, covering mobile and Smart Life, is expected to be flat.

Ii explained due to price competition in the low-volume segment it is “fighting over” customers and failed to reach a target for ARPU growth in the quarter. 

He added ARPU continued to fall as a result of rapid uptake of new low-cost plans, noting the pace of the ARPU decline has slowed.

Mobile service revenue in fiscal Q4 fell 2.8 per cent to JPY626.3 billion. ARPU slid 2.2 per cent to JPY3,930, declining in 10 of the last 13 quarters.

It added nearly 10 million 5G customers year-on-year to end March with 30 million, or 41.2 per cent of its 72.9 million total subscribers.

Equipment sales rose 1.4 per cent to JPY208 billion. Smart Life revenue dropped 3.9 per cent to JPY294.9 billion; enterprise sales increased 4.5 per cent to JPY533 billion.

Net profit jumped 30.5 per cent to JPY167.6 billion, driven in part by growth in enterprise. Operating revenue rose 10 per cent to JPY441.6 billion.

Full-year capex was flat at JPY705 billion and forecast to rise 6.2 per cent in fiscal 2024 to JPY749 billion.