Profits soar at NTT DoCoMo as i-mode takes off

by Louise Banbury, Brand Republic 10-May-01, 16:07

Profits at Japanese telecoms company NTT DoCoMo leapt by 45% last year, despite the tough global business climate, thanks to the success of its i-mode mobile internet service.

Net profit for the year ending March 31 was Y365bn (£2.1bn), beating the company's original expectations. The number of i-mode subscribers has risen to more than 22m since its launch three years ago, helping to push the year's sales up 26% to Y4,700bn (£27bn).

The popular service offers "always on" access to email and web pages with tailored information such as entertainment listings and sports results.

NTT DoCoMo plans to be at the forefront of the launch of the much-hyped third-generation mobile phone services, with the launch of its service in October. Although this is a delay of four months, the company's president and chief executive Keiji Tachikawa said he did not believe this would affect profits, because initial sales were likely to be modest.

The advent of 3G services has caused concern in the telecoms industry because of the huge cost involved in buying the licences and developing the technology.

Experts agree that DoCoMo is at an advantage because it already provides profitable wide-ranging mobile services. The company plans to invest Y50bn (£287.5m) to overhaul its i-mode service when 3G arrives.

The company's share price has risen 30% since the beginning of the year -- bucking the downward trend in the global telecoms sector -- but is currently trading down 4.9% on yesterday's close at Y2,590 (£14.89) on the London Stock Exchange.