Japan’s largest operator NTT Docomo reported a sharp increase in net income for its fiscal Q3 as service revenue expanded 6 per cent and both opex and capex fell.
For the quarter ending 31 December, Docomo’s net profit rose 43 per cent to JPY175 billion ($1.44 billion) on revenue of JPY1.17 trillion, which was up 1.3 per cent year-on-year.
Service revenue rebounded during the quarter to JPY717 billion, which the operator said was due to the positive impact of its new billing plan, which gives customers more flexibility in bundling services, and strong uptake of its fibre broadband service, Docomo Hikari. Equipment revenue fell 17 per cent to JPY241 billion.
Docomo said its Hikari customers rose to 1.25 million at the end of the year after adding 420,000 in the last quarter. Half its Hikari customers subscribe to its mobile plans and more than 20 per cent of fibre users have switched to higher data packages, it said.
Its mobile user base increased by 4.3 million from April to December to 69.6 million.
Operating expenses declined 2 per cent to JPY945 billion during the quarter, with the cost of sales dropping 12 per cent to JPY237 billion. Capex fell 17 per cent to JPY362 billion for the first nine months of its fiscal year.
Aggregate ARPU increased 4.7 per cent to JPY4,230 ($34.90) year-on-year in the quarter. The company said it broadened its ARPU definition to include the Hikari fibre broadband service. Packet ARPU and Hikari ARPU are now combined in the data ARPU figure, which increased 7.5 per cent to JPY2,990.
Following pressure from the government, the operator plans to introduce in March a plan for low data usage customers. The Share Pack 5 plan is priced at JPY6,500 and allows users to select the amount of voice and data to meet their actual usage.
It expanded the number of LTE base stations 29 per cent to 126,000 over the past nine months. Of that total, 13,500 are ‘premium 4G’ sites, up from 900 last March. It is targeting 18,000 premium sites by the end of its fiscal year. It also launched LTE with three-band carrier aggregation in 538 cities.
Its outlook for the full fiscal year forecasts operating revenue to increase 2.4 per cent, operating costs to rise about 1 per cent and operating income to expand 11 per cent to JPY710 billion.