Business

DoCoMo profit falls 13% in line with fee discounts

NTT DoCoMo Inc. said Friday its first-quarter net profit dropped 13 percent to 170.38 billion yen due to an expanded discount program to protect its subscriber base.

For the April-June period, the revenue of the nation’s largest wireless operator slid 2.5 percent to 1.22 trillion yen.

Senior Executive Vice President Masayuki Hirata told a news conference that DoCoMo has made solid progress toward its full-year goal and did not change its earnings forecast for the current fiscal year.

After years of growth, the wireless giant has forecast a fall in earnings and revenue for this fiscal year, as it is introducing deeper fee discounts and a flat rate for its i-mode cell phone Internet service to stave off rapid encroachment by rival KDDI Corp.

The firm also projects heavier spending as it steps up efforts to lure more subscribers to its FOMA third-generation mobile phone services.

During the period, the number of FOMA subscribers grew more than eight-fold from the previous year to 4.58 million. Total DoCoMo mobile phone subscribers increased 4 percent to 46.41 million during the same period.

To promote sales, the company gives retailers bigger commissions on FOMA handsets than popular second-generation models.

Meanwhile, KDDI said Thursday its net profit for the first quarter grew 17.6 percent to 51.66 billion yen on revenue of 720 billion yen, up 4.4 percent from the same period a year earlier.

The strong performance of its au mobile-phone operations more than offset a fall in its fixed-line operations, which have suffered a decline in voice-traffic revenue as users defect to cheaper Internet-protocol phones.

The number of au subscribers grew 20 percent year on year to 17.59 million as of the end of June, with 84 percent using the third-generation services.

In June, KDDI agreed to sell its personal handy-phone business to a consortium led by Carlyle Group, a U.S. private equity fund, for 220 billion yen in October. The deal is expected to bring 31 billion yen in profit.

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