KDDI Earns $256.5 Million on Popularity of 3G Service
KDDI Earns $256.5 Million on Popularity of 3G Service

KDDI Earns $256.5 Million on Popularity of 3G Service

KDDI Earns $256.5 Million on Popularity of 3G Service

KDDI Corp. reported group net profit of 30.87 billion yen for the fiscal third quarter, while boosting its full-year-earnings forecast by five billion yen, citing healthy consumer demand for its flagship “au” mobile-phone service, lower marketing costs, and restructuring. For the quarter ended Dec. 31, KDDI posted sales of 695.08 billion yen and operating profit of 56.80 billion yen.

It was the Japanese telecommunications provider’s first release of quarterly earnings. The company didn’t provide year-earlier numbers for comparison. One of the main factors behind KDDI’s solid earnings has been strong demand among consumers for its third-generation mobile-communications service, based on “CDMA2000 1x” technology developed by U.S. wireless-telecommunications company Qualcomm Inc. KDDI’s introduction of a movie-mail service and advanced preinstalled features on “au” cellphone handsets have also led to increased use of data-communications services, resulting in higher average revenue per user from these services. CONTINUE

COMMENTARY: In a mail message to investors, CSFB telecoms analyst Mark Berman provided the following synopsis of KDDI’s Au revenues:

** CDMA 1X ARPU (3Q): 9,240 (voice 7,080, data 2,160)

** Total AU ARPU (3Q) (cdmaOne 2G and CDMA 1X 3G combined): 7,640 (voice 6,440, data 1,200)

Compare these figures to NTT DoCoMo:

** 3G FOMA ARPU (3Q) = 7,750 (voice TBA, data TBA)

** 2G ARPU (3Q) (PDC 2G only): 8,200 (voice 6,430, data 1,770)

While DoCoMo doesn’t release combined 2G & 3G figures like KDDI does, nor does it break out voice and data from overall FOMA ARPU, it appears that overall 3G ARPU on CDMA 1X is higher than on FOMA W-CDMA by 19.2 percent. Also, in KDDI’s case, 3G ARPU is higher than combined 2G and 3G ARPU (for both voice and data), while in DoCoMo’s case, 3G ARPU is lower than just 2G ARPU.

Clearly, FOMA is hurting, and provides significantly less revenue to the carrier despite the network incurring greater capex costs this year (and next) than 2G (which, obviously, is already fully built-out). KDDI, in comparison, has spent a lot less to install the 1X upgrade. More grim news for FOMA!