Docomo expects tough second half - Mobile World Live

Docomo expects tough second half

01 NOV 2018

NTT Docomo reported steady gains in profit and overall revenue in its H1, but mobile sales were broadly flat and it expects net profit for the full fiscal year to drop 10 per cent.

The operator recorded a 3.8 per cent year-on-year increase in net profit to JPY407 billion ($3.6 billion) for the six months ending 30 September. Operating revenue increased 4.1 per cent to JPY2.39 trillion, with telecoms service revenue up 4.9 per cent to JPY1.96 trillion. Mobile turnover was down slightly to JPY1.44 trillion.

Equipment sales jumped 22 per cent to JPY390 billion in H1 and revenue from its smart life business inched up 0.7 per cent to JPY223 billion.

Rate cuts
Docomo confirmed reports earlier in the week it will introduce low-cost plans in its fiscal Q1 (April to June 2019), cutting rates by between 20 per cent and 40 per cent, and returning about JPY400 billion to subscribers per year. A survey found nearly half of customers think its plans are difficult to understand, so it is moving to simplify them.

Mobile subscribers increased 2 per cent year-on-year to 77 million at end-September, with LTE users accounting for 68 per cent of the total (up from 61.5 per cent at end-September 2017). Mobile ARPU stood at JPY5,300.

Capex was down 4.5 per cent year-on-year to JPY255 billion. The operator said it plans to invest an addition JPY10 billion on pre-commercial 5G services.

Its outlook for fiscal 2018 (ending 30 March) forecast operating revenue to increase by JPY70 billion to JPY4.86 trillion, mainly due to an increase in equipment sales associated with higher smartphone prices. Operating profit is expected to be stable at JPY990 billion due to higher expenses including cost of equipment sold.

It expects net profit to fall by 10 per cent from fiscal 2017 to JPY670 billion, mainly due to an increase in income taxes associated with an agreement for a new business cooperation with Sumitomo Mitsui Banking Corp.

The company announced it will spend JPY600 billion on share repurchases from 1 November to 31 March 2019.

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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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