NTT’s £2bn bucks telecoms trend

Published on Thursday 10 May 2001 01:00

NTT DoCoMo, Japan’s largest mobile phone operator bucked the gloom hanging over the telecoms market and posted a better than forecast £2 billion net profit.

The result was driven by growth in demand for its i-mode mobile internet service.

For the year ended 31 March, NTT DoCoMo said that consolidated net profit jumped 45 per cent to a record 365.5 billion yen (2.1 billion), while revenues grew 26 per cent to 4.69 trillion yen.

The company said i-mode, which allows users to surf the web over their mobile phones, is now used by 22 million Japanese customers, or 60 per cent of all NTT DoCoMo subscribers.

Keiji Tachikawa, president and chief executive of NTT DoCoMo, said: "We are very pleased with the results and they are above our original expectations. This shows that i-mode has become one of our main pillars."

Tachikawa warned, however, that the market for i-mode would likely reach saturation at 80 per cent of its mobile phone customers.

NTT DoCoMo had planned to bring its third generation internet-enabled phones - which will offer faster internet access and more sophisticated features such as video and audio transmission - to the market at the end of May.

The company announced last month, however, that it is postponing the launch of 3G until the beginning of October to give it more time to eliminate any technical problems. Despite the delay, NTT DoCoMo yesterday forecast even better results for the current year, saying its profits will rise to 390 billion yen on sales of 5.3 trillion yen.

Tachikawa said the postponement of the 3G will have no negative effects on earnings.

He added that the initial market for 3G is expected be relatively small, with the service generating just 20 billion yen in revenues in the first year - far less than the 350 billion yen which the company collected last year from i-mode subscribers.

In the past year, NTT DoCoMo has invested 1.8 trillion yen in forging alliances abroad, including a partnership with Hutchison 3G UK Holdings and companies in the US, the Netherlands and Taiwan.