KDDI, the largest mobile operator in Japan, reported double-digit increases in profit and revenue in its fiscal Q3 2018, but a surge in MVNO turnover hid a downward trend in au mobile service revenue.
The operator’s net profit in the quarter ending 31 December 2017 grew 10.9 per cent year-on-year to JPY161 billion ($1.47 billion) on revenue of JPY1.34 trillion, up 10 per cent.
Mobile turnover dipped slightly to JPY446 billion from JPY449 billion in fiscal Q3 2017, with MVNO revenue growing from JPY1.14 billion to JPY6.85 billion in the recent quarter. The increase in MVNO income offset a 1.9 per cent year-on-year drop its au mobile services to JPY446 billion. Revenue from handset sales grew 36.6 per cent to JPY311 billion.
Au mobile subscribers increased by 2.5 million year-on-year to 50.3 million.
Total ARPA (average revenue per account) rose 1.7 per cent year-on-year to JPY6,500, but slipped by JPY60 sequentially due to the introduction of new price plans. In a research note, Jefferies equity analyst Atul Goyal said he expects ARPA to recover in the second half of next fiscal year after a series of one-year promotions ends.
The company, which holds a 41 per cent share of the country’s mobile subscribers, said in a statement it aims to expand au ARPA and at the same time promote its MVNO business with UQ Communications, Jupiter Telecommunications and Biglobe.
KDDI announced a number of management changes, with current president Takashi Tanaka to replace Tadashi Onodera as chairman on 1 April. Makoto Takahashi, who leads the value-added business unit, will take over as president and Hirofumi Morozumi will assume the position of vice chairman.
The operator also announced a JPY50 billion share buyback plan due to be implemented by the end of the fiscal year.