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Discounts bite into NTT DoCoMo's results

Revenue and profit at NTT DoCoMo, Japan's number one cellular operator, dropped during the first half of its financial year because of discount schemes offered to win and keep subscribers to its 3G mobile cellular network.

Net income for the period from April to September was ¥335.2bn (£1.72bn) against ¥356.4bn in the same period a year earlier, while operating revenue fell to ¥2.45 trillion from ¥2.54 trillion. This represented a fall of 6% and 3.3%, respectively.

The drop in operating revenue was largely caused by reduced revenue from voice telephony services as a result of new discount services introduced during the period. The Japanese market is becoming more competitive as subscriber growth slows and it gets closer to saturation, prompting DoCoMo and its competitors to entice users with lower fees.

The effect of such discounts on packet data charges was negated by increasing use of the services, and the company saw a 2% rise in revenue from packet services.

At the end of the period its I-mode wireless internet service had 42.4 million subscribers, up by 1.3 million during the six months. DoCoMo predicted it would add an additional one million I-mode users in the six months from October to March 2005.

The company's WCDMA (Wideband Code Division Multiple Access) 3G service did well during the period and the number of subscribers more than doubled from three million to 6.5 million.

The company predicted that the next six months would be even better, and expects the 3G user base to stand at 10.8 million people by the end of March 2005. The carrier's total subscriber base rose by just over one million during the half, to 47.4 million users.

Martyn Williams writes for IDG News Service

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