DoCoMo Net Income Climbs 37 Percent As Carrier Reduces Churn

NTT DoCoMo (NYSE: DCM) reported quarterly net income had climbed to 173.1 billion yen, a 37 percent jump from last year’s earnings of 123.7 billion yen. Sales in the quarter ended September 30, were down 4 percent to 1.1 trillion yen from 1.14 trillion yen. Last November, Japan’s largest carrier, shifted its business model, raising the price of handsets, which it used to subsidize nearly the entire cost, and lowering the price of its subscription plans. The result was a drop in customer defections, as it became more expensive to change carriers; DoCoMo’s churn rate fell to 0.52 percent, from 0.94 percent a year ago. Under its new plan, DoCoMo also sold fewer handsets–5.32 million, a decrease of 1.24 million. The incumbent carrier now has 53.94 million subscribers, a slight increase of 310,000. By comparison, rival Softbank, the smallest of Japan’s carriers, and exclusive iPhone carrier added 521,400, while KDDI, the second-largest carrier, added 113,000.
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