KDDI wins Wi-Fi spectrum, prompting protest by Softbank

Bloomberg, Kyodo

The Internal Affairs and Communications Ministry has decided to allocate wireless spectrum to KDDI Corp. as the nation’s mobile carriers seek to boost download speeds.

KDDI, Japan’s second-biggest mobile carrier, will get the right to use the new 2,500 MHz spectrum after the ministry adopted a regulatory panel’s recommendation Friday.

Units of both Softbank Corp., the nation’s third-largest mobile carrier, and KDDI applied for spectrum, the ministry said July 10.

The bandwidth hasn’t previously been released and is part of the government’s plan to make new spectrum available as consumers increasingly use smartphones and tablets to surf the Internet.

Global smartphone shipments jumped 47 percent to 230 million in the second quarter from a year ago, Strategy Analytics said in a report Friday.

The regulatory panel concluded that KDDI presented better utilization plans for frequency assets inside buildings and tunnels, according to the ministry.

“The value of spectrum will rise as data traffic increases,” said Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo. “Companies cannot buy spectrum whenever they want.”

The spectrum will be allocated to UQ Communications Inc., a KDDI Corp. affiliate.

After the announcement, Softbank lodged a petition against the decision.

Softbank President Masayoshi Son said the decision is unfair and he requested records relating to the advisory opinion.

“Softbank will be at a huge disadvantage,” he said in an interview. “The process is ridiculous and very unfair. We need to fight for our users. I’m fully prepared to die if necessary to say this.”

Son said his company may file an administrative lawsuit if the ministry decides not to disclose the records.

DoCoMo profit drops

Kyodo

NTT DoCoMo Inc. said its group net profit for the April-June period fell 3.8 percent from a year earlier to ¥158.01 billion, due mainly to increased sales expenses amid intense competition with rivals that sell Apple iPhones.

Group operating profit dropped 5.8 percent from a year earlier to ¥247.47 billion, DoCoMo said Friday. But its operating revenue grew 3.9 percent to ¥1.11 trillion as its smartphone sales surged 34.4 percent from a year earlier to 3.35 million units.

DoCoMo, Japan’s leading mobile carrier, said profit was hurt by rising operating expenses, which grew ¥56.4 billion to ¥866.1 billion from a year earlier.

The company left unchanged its earnings forecast for the full business year to next April 1. It expects to chalk up a group net profit of ¥510 billion, up 3.9 percent from the previous year, and operating profit of ¥840 billion, up 0.3 percent, on operating revenue of ¥4.64 trillion, up 3.8 percent.

DoCoMo President Kaoru Kato was unperturbed.

“We have gotten off to a solid start to achieve our annual goal,” Kato said.

DoCoMo has been falling behind its rivals in attracting new customers despite starting a campaign in May featuring substantial discounts for two popular smartphones to combat the popularity of the Apple iPhone.

Although DoCoMo’s discount campaign on Sony Mobile’s Xperia A and Samsung Electronics Co.’s Galaxy S4 helped spur replacement demand, it did not lead to an increase in new subscribers.

In June, DoCoMo saw net subscribers drop for the first time in five months, while Softbank Mobile Corp. and KDDI Corp. posted gains. In the three-month period through June, its net growth in subscriptions came to 87,000, far smaller than the 266,000 added in the year-earlier period.

On the possibility of introducing iPhone handsets, Kato said the company’s stance has not changed, though “we’re always studying various options by monitoring market developments.”

Kato said the company will stick with its marketing strategy of focusing on a limited number of smartphone models. Customers using conventional mobile phones have been induced to switch and helped reduce defections to other carriers.

Sales of the Xperia A, launched May 17, reached about 1.1 million units, while those of the Galaxy S4 came to around 550,000 after it debuted May 23, DoCoMo said.