Competition, regulation, hit DoCoMo earnings
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’s fiscal third-quarter profit fell 29% to 95.6 billion yen (€949 million), which it blames on intense competition, declining voice ARPU and tax adjustments. Revenue was stable at 1.06 trillion won – down 0.9% year-on-year.
DoCoMo cut its forecast for the financial year to end-March from 514 billion yen to 474 billion yen due to changes to Japan’s corporate tax structure, which were enacted in November. 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.
The operator published its results days after being hit with a service outage affecting around 2.5 million customers. According to the Wall Street Journal, it was DoCoMo's fifth network problem in the past six months, and has resulted in the carrier pledging to spend around 50 billion yen 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 the Android smartphone platform so that its usage places less strain on mobile networks. The carrier is concerned at the rate in which Android phones send out control signals, placing a strain on its mobile networks, Reuters reports.
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.