NTT DoCoMo claws back to black

But losing out in 3G race

DoCoMo has returned to profitability, but its main rival KDDI has leapt ahead in the 3G subscriber race. DoCoMo has just 330,000 subscribers compared to KDDI's 7.5 million. Also worrying are DoCoMo's low expectations for revenue growth, as increased spending on data services seems to be coming at the expense of conventional calls.

NTT DoCoMo has clawed its way back to profitability and expects net income to more than triple this year as subscribers switch to 3G services. However, Japan's largest mobile carrier continues to be outpaced by its main competitor KDDI, which has built up a far larger 3G subscriber base built on Qualcomm's CDMA2000 technology.

For the year to March 31, DoCoMo reported net income of $1.8 billion, up from a loss of $1 billion, on revenue 3.2% higher at $41.4 billion. DoCoMo, which is Asia's most valuable public company, expects net income this year to leap to $5.3 billion, though it predicts that revenue will only increase 1.9%.

It plans to boost its 3G subscriber base to 1.46 million by the end of this year from a current figure of 330,000, and president Keiji Tachikawa said this is a conservative target as it only involves an extra 100,000 subscribers a month.

Much more rapid growth has been seen at KDDI, which had 14.3 million subscribers at the end of April compared with DoCoMo's 44 million. While DoCoMo has been hampered by teething problems on its 3G network, KDDI has raced ahead with Qualcomm's technology and now boasts a 3G subscriber base of 7.5 million.

This has brought huge benefits to the company's bottom line, and in the year to March 31, net income was $493.9 million, up from income of $111.9 million on revenue that fell 1.7% to $23.9 billion. While it expects revenue to fall slightly this year, net income is expected to increase by about 24% to $609 million.

DoCoMo's business progression is worrying as revenue growth has stalled and increased expenditure on data services seem to be at the expense of spending on conventional calls. Mobile operators worldwide may be alarmed at DoCoMo's latest figures as Japan is an avidly watched market; its advanced services are thought to offer a glimpse of the future in other regions.

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