NTT Docomo makes gains in virus headwind

NTT Docomo recorded modest profit growth in the first quarter of its fiscal year, despite a decline in mobile revenue due to a plunge in handset sales.

In a statement, the operator said the environment surrounding its business had changed significantly due to the entry of new operators including MVNOs, and the effects of Covid-19 (coronavirus).

While it forecast operating revenue for its fiscal year ending 31 March 2021 to decline 1.7 per cent to JPY4.57 trillion ($43.2 billion), it expects operating income to increase 3 per cent to JPY880 billion as a result of company-wide cost efficiency improvements.

In fiscal Q1 (to end-June), net profit rose 1.5 per cent year-on-year to JPY195.3 billion, with operating revenue falling 5.3 per cent to JPY1.098 trillion.

Mobile service turnover dipped 2.7 per cent to JPY681 billion due to a significant drop in international roaming. Equipment sales plummeted 46.3 per cent to JPY90 billion as lockdown measures kept customers away from shops.

Smart Life sales jumped 30.3 per cent to JPY145 billion; other business revenue, including enterprise, was flat at JPY110.4 billion.

Mobile subscriptions rose 2 per cent cent to 80.6 million. ARPU was nearly unchanged at JPY4,250.

Capex fell 7.2 per cent to JPY90.8 billion.

5G progress
The operator reported steady progress in subscriber acquisition and coverage expansion, ending June with 149,000 next-generation users and targeting 2.54 million by end-March 2021.

It introduced 5G service in late March: by the close of fiscal Q1 the service was available in 92 cities, with a target of 500 by the close of the year.