NTT Docomo Inc., the nation’s largest wireless operator, said a price war with other carriers and discounts on the latest iPhones may threaten its full-year forecast after adding the Apple Inc. devices to lure customers.
Curbing subsidies on mobile phones will give competitors an advantage as customers shop for the best deal, Chief Financial Officer Kazuto Tsubouchi said in an interview Thursday at the company’s Tokyo headquarters. NTT Docomo is projecting operating profit of ¥840 billion in the 12 months ending March 31.
NTT Docomo added the iPhone 5s and 5c in September as it battles SoftBank Corp. and KDDI Corp. for subscribers amid an aging population. The move helped it add the most users in December, the first time it led monthly additions among wireless carriers since 2011, before its rivals fought back with new discounts.
“Competition got extremely tough in February and March. The company will likely make a decision to gain new customers aggressively even by giving up earnings targets,” said Hitoshi Hayakawa, an analyst at Credit Suisse Group AG in Tokyo. “The harsh marketing battle will likely continue as long as operators offer discounts.”
NTT Docomo shares rose 0.2 percent to ¥1,691 at Thursday’s close in Tokyo. SoftBank added 0.9 percent and KDDI declined 0.6 percent.
The company’s forecast compares with the ¥841 billion average of 14 analyst estimates compiled by Bloomberg. Full-year net income may total ¥510 billion, NTT Docomo said Jan. 31.
“We are in a grueling war,” Tsubouchi said. “We may have to decide to win the battle for subscribers even by giving up the ¥840 billion target.”
SoftBank, controlled by billionaire Masayoshi Son, has offered the iPhone since 2008 and second-ranked KDDI Corp. followed in 2011, enabling both to win market share from Docomo.
NTT Docomo had resisted offering the iPhone because Apple’s iTunes store competes directly with its dmarket, an online store for music, videos and games. The benefits of offering Apple’s smartphone outweigh negatives, Tsubouchi said.
SoftBank is offering discount plans for families that subscribe to its iPhone service. A four-member family that switches to the iPhone 5c could save ¥309,120 over three years, according to the company’s website.
KDDI is offering a cheaper monthly fee for iPhone users who switch from other operators. Additional discounts are available for subscribers who sign up for the company’s fixed-line services, according to the KDDI website.
In February, NTT Docomo added the most net new subscribers, with 267,900 users, followed by SoftBank with 266,000 and KDDI with 220,500.
NTT Docomo had 62.6 million subscribers as of Feb. 28, while KDDI had 40 million and SoftBank had 35.3 million.
February through early April is the biggest business season for wireless operators as parents typically buy a smartphone for children who pass entrance exams for universities or high schools, Tsubouchi said.