Japanese telecom service provider NTT Docomo is planning to spend 650 billion yen or $5.76 billion per year towards Capex (capital spending) in fiscal 2015-2017.
Its Capex during the half of fiscal 2015 dipped 9.2 percent to 292.5 billion yen.
The telecom operator is hinting at major cost reductions to improve its profitability. The Capex can go down as well.
During the first half of fiscal 2015, NTT Docomo revenue dipped 26 percent to 2173 billion yen, while net income fell 41 percent to 259 billion yen.
As part of expanding 4G LTE network in Japan, NTT Docomo has deployed 79,000 LTE base stations in September 2014 against 66,300 in June 2014.
Despite plans for significant cost cuts, NTT Docomo is expected to have 95,300 LTE base stations by March 2015.
The company achieved 26.22 million 4G LTE subscribers in the second quarter of fiscal 2015.
Primarily due to the impact of new billing plan, NTT Docomo has also slashed its revenue targets to 4,400 billion yen from 4,590 billion yen and net income target to 420 billion yen from 480 billion yen during the current fiscal.
During an analyst call, Daisuke Oshidari of JPMorgan indicated that NTT Docomo is spending heavily on Capex as compared with its rivals such as Softbank and KDDI.
Kaoru Kato, president and CEO NTT Docomo, said: “We will control the Capex under ¥650 billion for each given year, going forward. We will maintain the network, quality and expand for the network quality.”
NTT Docomo is looking at slashing the network related costs, acquisition cost and marketing expenses.
The telecom operator has already released 8 models of VoLTE-enabled handsets and sales of VoLTE-enabled models touched 1.3 million units. The number of users, who completed the software update to enable VoLTE capability, reached 1.2 million.
“We plan to rollout LTE advanced service by the end of this year to offer downloading speed of 225 megabytes per second,”
Meanwhile, NTT Docomo will start a new fixed-line broadband connection service, Docomo hikari, utilizing the optical lines of NTT East and NTT West, in February 2015.
NTT will introduce a combined discount plan, Docomo hikari pack, for its mobile phone service and the broadband service. The fee for the optical service will be cheaper for customers with heavy usage of mobile data communications.
KDDI and SoftBank Mobile have already started combined discount plans for mobile and fixed-line communications.
Baburajan K
editor@telecomlead.com
