I-mode helps keep DoCoMo in the black
- 10 May, 2002 08:20
Japanese telecommunication carrier NTT DoCoMo Inc. saw its net profit slashed to ¥862 million (US$6.7 million as of March 31, the last day of the period being reported) in fiscal 2001, down from last year's ¥366 billion, but was helped in staying in the black by a strong performance from its I-mode wireless data business, the company said Wednesday.
The Tokyo company increased revenue by 10.4 percent to ¥5.17 trillion and recorded record operating income and operating profit in fiscal 2001, Keiji Tachikawa, president and chief executive officer, said.
But the company was forced to write off ¥813 billion in special losses as the global mobile telecommunication market was hit hard by the economic malaise in 2001, said Tachikawa. The downturn lowered share prices of KPN Mobile NV of the Netherlands, KG Telecommunications Co. Ltd. of Taiwan, AT&T Wireless Services Inc. of the U.S. and Hutchison 3G UK Holdings Ltd. of the U.K. -- carriers in which NTT DoCoMo invested.
At a news conference, Tachikawa was asked whether the company has made the right decisions in overseas investments.
"(NTT DoCoMo's overseas strategies will) bring the company patent or consultant fees from I-mode," Tachikawa said, emphasizing that the company's investments in those carriers can still be beneficial. "Making I-mode a de facto standard can put us in the strongest position in the competitive markets, too."
Another business which did not go as well as the company expected last year was the 3G (third-generation) Foma service. Foma, which was rolled out last October as the world's first 3G service, didn't achieve its 150,000-subscriber goal by the end of the last fiscal year. Instead, only 90,000 subscriptions were sold. However, NTT DoCoMo predicts that number will grow to 1.4 million by the end of this fiscal year, said Masayuki Hirata, financial manager of NTT DoCoMo.
Among operating revenue from telecommunication businesses, packet communication service, mainly coming from the mobile Internet I-mode service, doubled from the previous year to ¥716 billion, said Hirata.
The company believes now is the time for current 2G (second-generation) PDC (Personal Digital Communications) network users to upgrade to Foma, Tachikawa said. The company also plans to release several new Foma handsets in the second half of this year, he said.
From 2005 onwards, the company hopes the number of Foma users will exceed the number of PDC users, Tachikawa said.
As for fiscal 2002, the company does not predict a write-off of any extraordinary loss, Tachikawa said. Therefore DoCoMo expects to achieve a ¥511 billion net profit in the next fiscal year through growth in nonvoice services, Hirata said.