NTT DoCoMo reports 25% drop in profits for fiscal 2006

April 28, 2007
By Ken Worsley

Earlier in the week, telecoms firm KDDI announced a 16% increase in profit for the last financial year, bolstered by the strength of its AU mobile brand. We almost wondered out loud if their competition would be down by greater or less than 16% on the year…

NTT DoCoMo, it turns out, was hit a bit harder. On Friday, the firm announced a 25% loss in profits, after being hit hard by a deluge of customers fleeing after number portability was introduced last October, and massive spending on network upgrades.

Although NTT has spent heavily on building a 3G network, which they were the first to unveil in Japan, the plan is still negative in terms of ROI. Speaking at a news conference, President Masao Nakamura had this analysis of the results:

On the whole, we lost 630,000 subscriptions in the year to March, which isn’t really a good result. The reason is clear. Our customers left us either over the weakness of the 3G network or the expensive fees. We’ve been frantically strengthening our network but it is difficult to erase our customers’ first impression that the FOMA network is weak.

At least he knows what’s wrong and isn’t afraid to say it. That is a big first step. Although the annual report caught all t he news attention, NTT made two other announcements on the same day: NTT DoCoMo Announces Termination of PHS Services and NTT DoCoMo to Terminate CITYPHONE Service.

Filed Under IT, Technology, Telecom