DoCoMo has seen its profits fall with increased competition in the Japanese mobile market, and expects the situation to get worse with the introduction of mobile number portability. “Net profit dropped 19.6 percent to 309.82 billion yen (2.62 billion dollars) in the six months to September compared with a year earlier when the group booked large gains from the sale of shares in Hutchison 3G UK Holdings...Operating profit fell 7.4 percent to 516.89 billion yen as revenues rose 0.4 percent to 2.38 trillion yen, helped by the introduction of new handsets with credit card functions and built-in music players.” From Bloomberg: “NTT DoCoMo Inc., Japan’s largest mobile-phone company, said first-half profit fell 20 percent as it spent more on network improvements and marketing to fend off increased competition from KDDI Corp. and Softbank Corp...Net income was 310 billion yen ($2.6 billion) in the six months ended Sept. 30, from 385 billion yen a year earlier, the company said in a statement to the Tokyo Stock Exchange today. Sales rose 0.4 percent to 2.383 trillion yen.”
The company is also refusing to get into a price war with Softbank, claiming there are hidden conditions in Softbank’s price plans.
Bloomberg is linking the fall in profits to costs associated with promoting mobile content. “DoCoMo and rivals are focusing on music and other services that encourage users to download data through its high-speed network to help offset declines in revenue from voice services and lure new users. The strategy is pushing up DoCoMo’s costs because it subsidizes the more expensive handsets required for its Foma high-speed or third-generation system.”
The average revenue per user for data rose from 1,880 yen a year ago to 1,980 yen this quarter, although that’s a long way from making up the fall in other revenue..."Total average revenue per user for DoCoMo’s Mova and Foma services fell 4.7 percent to 6,720 yen in the three months ended Sept. 30. Voice revenue fell to 4,740 yen per user in the second quarter from 5,170 yen a year earlier”.