NTT Docomo Inc. said Friday that sales and profits dropped in the first quarter compared with the previous year, on slumping voice call revenue and discounts for two-year contracts.
The telecom giant posted ¥1.07 trillion in sales, down 3.4 percent, ¥209 billion in operating profit, down 15.3 percent, and ¥136 billion in net profit, down 13.7 percent.
Docomo said revenue from voice calls plunged by ¥26.8 billion.
In addition, the ¥45.8 billion cost of providing monthly discounts for customers on two-year contracts hit earnings, the carrier said.
Despite the drops, “this fiscal year is a preparation period for further growth” for next year, Docomo President Kaoru Kato said. In that light, he argued, the first quarter went well.
For instance, to stop the drop in voice call revenue, Kato said Docomo in June became the first to launch a flat-rate voice calling plan, which drew more than 6 million customers.
“The new plan is a big asset” for growth, he said.
Kato also said the number of subscribers defecting to other carriers fell compared with the same quarter in 2013, apparently due to the introduction of the flat rate.
For the full year, Docomo is forecasting ¥4.59 trillion in sales, up 2.9 percent from 2013, ¥750 billion in operating profit, down 8.4 percent, and ¥480 billion in net profit, up 3.3 percent.