DoCoMo Q3 profit falls 29%

Dylan Bushell-Embling
30 Jan 2012

Japan's NTT DoCoMo has reported a steep decline in December quarter profit, in the midst of controversy over a series of network outages.

The company revealed its third-quarter profit fell 29% to 95.6 billion yen ($1.24 billion), blaming intense competition, declining voice ARPU and tax adjustments. But revenue fell just 0.9% to 1.06 trillion won.

The company also cut its forecast for the financial year due to end in March. DoCoMo now expects a full-year profit of 474 billion yen, from the 514 billion yen that it had earlier predicted.

DoCoMo blamed the reduced forecast on corporate tax reform enacted in November – its forecast for operating revenues remains unchanged at 4.24 billion yen.

The company expects the impact to be for this year only, and indeed expects the tax reform to result in higher net income in subsequent years.

DoCoMo published its results days after being hit with a service outage affecting around 2.5 million customers. According to the Wall Street Journal, this was DoCoMo's fifth network problem in the past six months.

The operator has promised to spend around 50 billion yen ($651.5 million) over the next three years to fix and upgrade its networks to cope with growing data demands.

DoCoMo is also planning to ask Google to modify Android so that its usage places less strain on mobile networks.

Reuters, citing a Nikkei report, states that DoCoMo is concerned at the rate in which Android phones send out control signals, placing a strain on its mobile networks.

Some Android applications send out control signals at up to ten times the rate of a conventional mobile phone. These control signals can be sent out at a rate of once every three to five minutes, even when the applications are not in use.

DoCoMo is not the first operator to complain about the strain Android apps are placing on current mobile networks.

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