Docomo to ramp up network spending following outage - Mobile World Live

Docomo to ramp up network spending following outage

30 JAN 2012

Japan’s NTT Docomo is to pump further capital into its mobile network over the next three years following another major outage last week.

The Wall Street Journal reports that the outage affected 2.5 million of Docomo’s 60 million mobile subscribers for about four hours. It is the fifth such incident at the network in the last six months. The exact cause is not known but some reports have linked it to an app on an Android smartphone.

"We are doing everything we can to regain our customers' trust," said Docomo CEO Ryuji Yamada at a news conference Friday. Yamada and five other executives are to take pay cuts of around 20 percent over the next three months to take responsibility for the outage.

The operator said it will spend JPY50 billion over the next three years to address the problems on the network, including JPY4 billion in its next fiscal year (ending March 2013) relating specifically to last week’s issue. It plans to spend a total of JPY160 billion to build a network capable of accommodating 50 million smartphones.

On Friday, Docomo reported a 29 percent decline in net profit to JPY95.60 billion (US$1.23 billion) for its fiscal third quarter (ended 31 December), due to tax adjustments and declining voice income. Revenue declined 0.9 percent to JPY1.061 trillion from JPY1.071 trillion a year earlier.  However, operating profit for the quarter rose 3.6 percent to JPY235.28 billion.

For the full fiscal year – which ends in March – Docomo lowered its net profit forecast to JPY474 billion from an earlier-projected JPY514 billion.