Tags: NTT DoCoMo | DCM | Japan | telecoms | stocks

NTT DoCoMo: Japan’s Telco Stalwart

By    |   Friday, 15 Jul 2011 05:02 PM

NTT DoCoMo (DCM) is Japan’s largest mobile phone operator with 48 million customers and a 49 percent market share. The company has been responsible for some of the industry’s most important technological breakthroughs. With its i-mode service in 1999, NTT DoCoMo became the first company in the world to offer 3G cell phone services, including wireless Internet access.

Its 3G services have almost total penetration among its customers, with 98 percent of them utilizing the network. That’s the highest rate for any company in the world. As cell phones have become ubiquitous, DoCoMo has shifted its emphasis to data services, which account for 42 percent of its wireless service revenue.

The company was the first to offer 4G services in Japan when it launched an LTE (long-term evolution) system in December 2010. DoCoMo also has purchased stakes in foreign phone companies, including Tata Teleservices of India and Philippine Long Distance Telephone.

Since DoCoMo bought 26.5 percent of Tata Teleservices in 2009, the Indian company has seen its customer base increase 100 percent to 80 million subscribers and now stands as the fourth-biggest cell phone service provider in its home nation.

Earnings performance

For the fiscal year ended March 31, DoCoMo’s revenue slipped 1.4 percent to $51.9 billion. Operating income rose 1.3 percent to $10.3 billion.

“Although voice revenue decreased by $2.4 billion from the previous year due to a decline in voice ARPU (average revenue per user), packet (data) communications revenues increased $103 billion as a result of our efforts to boost packet usage,” the company said in a statement accompanying its earnings release.

Analysts at Ford Equity Research calculate that DoCoMo’s operating earnings yield of 7.9 percent puts it above 82 percent of the companies they cover.

On the negative side, the company’s earnings growth is decelerating, so the Ford analysts rate DoCoMo stock neutral.

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NTT DoCoMo (DCM) is Japan s largest mobile phone operator with 48 million customers and a 49 percent market share. The company has been responsible for some of the industry s most important technological breakthroughs. With its i-mode service in 1999, NTT DoCoMo became the...
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Friday, 15 Jul 2011 05:02 PM
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