Market leading NTT DoCoMo’s consolidated financial results for the six months ending Sept. 30th were announced last week at this press conference in Tokyo. Operating revenues were up 6.4% while operating income was down 7.8% with earnings per share 3.9% lower when compared to the same period last year. Dr. Kenji Tachikawa, President and CEO stated “During the first six months of fiscal year ending March 31, 2004, the Japanese cellular phone market posted robust growth with the number of net additional subscribers reaching 2.94 million. The enviroment surrounding our business, however, became harsher as the competition among mobile telecom companies intensified..” He also had some interesting comments about their strategy going forward to year end. Full Program Run-time 14:57
Excerpt from Paul Kallenders Viewpoint Article
DoCoMo had a good half-year to September 30, posting a net income of 365.4 billion yen compared to 42 billion yen a year ago with DoCoMo pushing a bunch of happy buttons for journalists, claiming that sales were boosted by FOMA and mova handsets, and climbing data revenues. DoCoMo managed to boost its cell phone subscribers by 7% to 45.04 million mainly due to their 505 series handsets. Old Faithful i-mode finally passed the 40 million subscriber mark, but better for DoCoMo?s strained PDC network, president Tachikawa has now tossed another projection in the ring, upwardly revising the company?s FOMA subscriber target to 2 million from 1.46 million by March 31, 2004.
But lets look at this from a different angle. DoCoMo also reported its first decline in consolidated pretax profit since its listing in October 1998 while KDDI’s group pretax profit more than tripled. DoCoMo was unable to offset the increase in incentives paid to sales agents, which run at an average of 31,000 yen per unit — and this resulted in an 8 percent decline in operating profit to 590.1 billion yen.
Cellie sales jumped 25 percent to 14.7 million units, but about 70 percent of these were to existing members, so they didn?t generate much fresh revenue.
For the full fiscal year through March 31, DoCoMo projects a record operating profit of 1.09 trillion yen, up 3 percent from the previous year.
There were a lot of fun figures pouring out of the DoCoMo press mill. FOMA revenues climbed to 36.3 billion, up 565 percent compared to the same 6 months last year. (But last year there were only a handful of subscribers!) Oh happy times: FOMA ARPU has broken the ten grand mark, which must be melodious music to Big D?s ears. Voice ARPU, packet ARPU and aggregate ARPU were 6,650, 3,470 and 10,120 yen respectively.
More convincingly, the 505i series really brought home the bacon both in terms of subscribers (see previous Viewpoint) but also in packet communications revenues, which increased 23.9 percent over last year to 517 billion yen? until you read more closely. Then you?ll find that aggregate ARPU for i-mode dropped to 8060 yen (down 1.2 percent) from a year ago. With more bells and whistles than a Latin American carnival on its PDC 505s, it seems that DoCoMo has reached the limit of what it can possibly squeeze out of its subscribers. All the more reason now to move folks to FOMA, wethinks.
The complete text of Dr. Tachikawa’s statement [.pdf] is Here
— The Editors.