DoCoMo Plans to Increase Operating Profit While Curbing Spending, CFO Says

By Yoshinori Eki - Nov 21, 2011 12:45 PM GMT+0700

NTT DoCoMo Inc. (9437), Japan’s biggest mobile-phone carrier by subscribers, aims to keep boosting operating profit by curbing overall spending as two smaller rivals add more customers by offering Apple Inc. (AAPL)’s iPhone.

The company plans to maintain annual spending at about 700 billion yen ($9.1 billion) in the four years starting next fiscal year, Chief Financial Officer Kazuto Tsubouchi said in a Nov. 18 interview. More of that will be spent building faster networks to compete with KDDI Corp. (9433) and Softbank Corp. (9984), he said.

“Our coverage is already 100 percent in the third- generation network,” Tsubouchi said. “We plan to spend more on the long-term evolution network, as it can build on the 3G network.”

DoCoMo, which posted gains in operating profit the past four years, is trying to capitalize on the faster “Xi” data- communication service it started offering last December. The company raised its budget for expanding the service by 10 percent to 330 billion yen for the three years ending March 2013, it said Nov. 2.

KDDI and Softbank plan to offer the service next year.

Tokyo-based DoCoMo, which doesn’t offer the iPhone 4S, lagged behind adding customers in October after Softbank and KDDI began selling the latest Apple handset.

Softbank added 247,600 new customers in October, followed by KDDI’s 196,900, according to figures released by the companies Nov. 8. DoCoMo’s new users totaled 89,600 last month, the company said.

The wireless unit of Nippon Telegraph & Telephone Corp. raised its operating profit forecast 2.4 percent to 870 billion yen for the year ending March 31, the company said Nov. 2.

DoCoMo rose 1 percent to 137,400 yen in Tokyo trading as of 1:39 p.m. Shares are down 3.1 percent this year, compared with a 20 percent decrease in the Topix index.

To contact the reporter on this story: Yoshinori Eki in Tokyo at yeki@bloomberg.net

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