Bloomberg News

NTT Docomo Counts on IPhone to Stem Loss of Users to SoftBank

November 12, 2013

iPhones for Docomo

Customers look at Apple Inc. iPhone 5c and 5s smartphones for NTT Docomo Inc. on display at an electronics store in Tokyo. Photographer: Kiyoshi Ota/Bloomberg

NTT Docomo Inc. (9437), Japan’s largest mobile-phone operator, said the addition of Apple Inc.’s iPhone to its handset lineup in September is helping reduce subscriber losses to competing carriers.

Docomo lost about 93,000 subscribers net to KDDI Corp. (9433) and SoftBank Corp. (9984) last month and wants to cut that amount to between 40,000 and 50,000 a month, Chief Financial Officer Kazuto Tsubouchi said during an interview yesterday. During the first nine months of this year, Docomo lost an average of 141,050 subscribers a month to other carriers, the company said.

The last major Japanese carrier to start selling the iPhone had resisted adding the handset because Apple’s iTunes store competes directly with Docomo’s dmarket, its online store for music, videos and games. SoftBank was the first of the nation’s operators to offer the iPhone when it began sales in 2008 before KDDI followed in 2011 and Docomo on Sept. 20.

“From October, the number of customers exiting has decreased quite a lot,” Tsubouchi said at the company’s headquarters in Tokyo. “If we can even get that down to a small minus figure that we can forecast -- in sumo terms, we’ll have gotten right back into the middle of the ring.”

Japanese telecommunications companies are looking for ways to boost revenue through acquisitions at home and abroad as growth stalls because of a declining population. Docomo said last month it will acquire a 51 percent stake in the Japanese cooking school operator ABC Holdings to boost smartphone content, and SoftBank led a $1.53 billion deal for control of Finnish game maker Supercell Oy.

‘Considering Targets’

“We are always considering targets that will expand our earnings,” Tsubouchi said. A company that allows for the distribution of content is more attractive than a carrier, the executive said.

In July, SoftBank bought Overland Park, Kansas-based Sprint Corp (S:US) for $21.6 billion, adding the third-largest U.S. carrier.

“SoftBank appears to have judged if they bring their network technology over there, they can increase value,” Tsubouchi said.

Docomo’s net income rose to 142.4 billion yen ($1.4 billion) in the three months ended Sept. 30, the company said in a statement Oct. 25. That beat the 133 billion-yen average of three analyst estimates compiled by Bloomberg.

Docomo added 37,100 net users in October, while SoftBank gained 229,400 and KDDI added 158,900. Docomo still dominates the Japanese wireless sector with 44.5 percent of the market. The figures include users who sign up for new accounts.

To contact the reporters on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net; Takashi Amano in Tokyo at tamano6@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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