DoCoMo scales down 3G target as income slumps
Customers stay away in droves
NTT DoCoMo Inc expects to have only 320,000 subscribers for its 3G services by the end of its current financial year, and has abandoned its original optimistic forecasts that it would have 1,380,000 users by that date.
The downgrading of targets by the Tokyo, Japan-based mobile carrier will add to the alarm of its counterparts in Europe, which are delaying their roll-outs of 3G technology because of fears that the initial returns will not justify the huge investment.
For DoCoMo the humiliation is even worse because while its 3G launch has had a shaky start, its closest rival KDDI Corp, which opted for Qualcomm Inc's rival CDMA2000 technology, is about to reveal figures showing a strong appetite for 3G technology.
DoCoMo had already prepared the market for poor figures by revealing that it planned to write off JPY 573bn ($4.7bn) on overseas assets such as AT&T Wireless and Hutchison 3G and KPN Mobile NV in Europe.
In the first half to September 30, net income was JPY 4.17bn ($34.2m), down from income of JPY 89.2bn ($732.1m) on revenue up 1.9% at JPY 2.38 trillion ($19.5bn). For the second half, the company said it is looking for net income of JPY 182bn ($1.4bn) down from the forecast it issued in May of JPY 511bn ($4.2bn).
But while executives in Europe and the US tend not to regard a market downturn as a reason to cut their own income, DoCoMo president Keiji Tachikawa said that he and other top executives will take 20% salary cuts in the second half of the year.