Japan’s second largest operator KDDI reported strong growth in both income and revenue in its fiscal H1 as it added subscribers and grew ARPU. But rivals NTT Docomo and SoftBank reported mixed results for the period despite modest growth in subs and ARPU.
KDDI added 2.5 million subscribers over the past year, boosting its user base by about 7 per cent to 37.4 million, while ARPA (average revenue per account) rose 2.5 per cent to JPY6,130 ($50.45) from a year ago.
Smartphone penetration hit 56 per cent in the last quarter, with 53 per cent of its customers on LTE plans. The number of customers signing up for its au wallet more than doubled from a year ago to 15.8 million.
Its net income for its fiscal H1 increased 22.3 per cent to JPY277.5 billion ($2.28 billion) and operating revenue rose 6 per cent to JPY2.15 trillion. Service revenue grew 7.2 per cent to JPY1.68 trillion, as its ‘3M strategy’ (multi-use, multi-network and multi-device) promotions have started to yield results, the company said.
Its EBITDA margin improved 4.5 points to 33.9 per cent during the January-to-September period.
In September it started offering a ‘data carryover’ service that allows customers to carry over unused data amounts to the next month.
Capex during the period was down 21 per cent year-on-year to JPY255 billion, with mobile spend accounting for 51 per cent of the total. For FY2016 capex is forecast to drop 10 per cent to JPY600 billion.
Since signing a joint-venture agreement with Myanmar’s MPT in July 2014, the state-run operator’s subscriber base has expanded almost 2.5 times to nearly 16 million.
Slowing service revenue
Meanwhile, NTT Docomo posted mixed results with its net income in its fiscal H1 ending 30 September rising 6.3 per cent to JPY462 billion, while operating revenue was up 1.9 per cent to JPY2.21 trillion.
But its telecoms service revenue fell 19.4 per cent to JPY19.4 trillion, despite an improvement in ARPU, which rose almost 2 per cent to JPY4,190.
The company added 1.9 million subscribers over the past year and smartphone users rose 17 per cent to 30.75 million. It said 95 per cent of the smartphones in use are LTE-enabled, up from 87 per cent a year ago.
Its capex dropped by 73 per cent to JPY219 billion from H1 of 2014.
SoftBank, the country’s third largest mobile player, also reported a mixed bag of H1 results, as operating revenue grew 10 per cent to JPY4.42 trillion while net income dropped by 24 per cent to JPY426.7 billion.
EBITDA increased 22 per cent to JPY1.31 trillion.
Both its Japanese and US operations posted solid gains in EBITDA and revenue. Its telecoms business in Japan saw EBITDA rise 5 per cent to JPY642.9 billion and revenue increase 6 per cent to JPY1.5 trillion, while mobile service revenue inched up 0.09 per cent to JPY971 billion.
SoftBank added about 600,000 subscribers over the past six months, taking its total to 31.6 million, and ARPU rose marginally to JPY4,720.
SoftBank’s finance costs rose 26 per cent to JPY215.6 billion due mainly to an increase in US operator Sprint’s interest expenses caused by the yen’s year-on-year depreciation against the US dollar.
SoftBank said its turnaround strategy for Sprint is on track, with an expected $2 billion reduction in opex in FY2016 and $1 billion to $1.2 billion earmarked over the next 18 months to improve its network. It is also boosting its financing options by expanding its network vendor financials and setting up a handset leasing company.