Vodafone Japan’s Losses To Widen

Despite a decentish 3Q. It looks as if Vodafone K.K.’s first good subsciber uptake month in a while - last December - has been too little and too late to prevent Japan’s number 3 carrier from posting a wider full-year loss for the year to March 31, 2004. Today, the carrier announced that its 3Q consolidated operating revenues increased from 385 billion yen for the three months to September to 1.28 trillion yen for the quarter to December 30, 2003.

See the press release Here.

It wasn’t all bad news for Vodafone K.K. in the last quarter, but last year’s dramatic uptake in subscribers to 114,200 hasn’t been good enough for the company to maintain its estimates of full-year losses.

In a Jan 28. summary, the company said it was revising its loss for the full year to March 31, 2004 to 114 billion yen from 104 billion yen, nearly 10% worse than previously expected due, as the company put it “to an intensifying competitive environment” and barrels of cash Vodafone is laudably throwing at service and network improvements.

On the negative side of things, there was cold comfort for the company in last December’s upswing in subscriber adds, because 114,200 only represented 22.5% of the total adds for the month and there are only three carriers. Of course, WWJ readers will know that Vodafone and DoCoMo both lost big time to KDDI, which took the lion’s share again for what was the third consecutive month. On the other hand, Vodafone only managed 33,200 adds in October and 35,500 adds in November. Cold comfort indeed.

Vodafone’s gentle ARPU slide continued as well, with the company reporting a drop to 6,760 yen in November from 6,760 yen in October, although there was a recovery to 6,690 yen in December.

On the positive side, churn was down and the company’s market share in strategic terms remains at 18.5%. It would seem that the Happy Packet discount rates and the new phones put out by the company were sorely needed and somewhat helped the company in December. But it seems equally valid to assume that the company has to keep pounding its discount rates drum to customers and back this up with a batch of new handsets and services in the spring. If it doesn’t, a series of more serious slides could be on the books.

DoCoMo is due to launch its flagship FOMA 900is in a few weeks. What Vodafone K.K. needs is a high-speed 3G reply.

– The Editors.