Japan's NTT Docomo forecast stronger growth in the current fiscal year, led by demand for its LTE data services and smartphones. The mobile operator reported revenues for the fiscal year to March 2012 up 0.4 percent to JPY 4.24 trillion, with a 9.9 percent drop in voice revenues offset by 8.8 percent growth in data and 4.6 percent higher equipment sales. Operating profit increased 3.5 percent to JPY 874.5 billion, supported by cost reductions, while net profit was down 6.3 percent to JPY 461 billion, in line with the company's earlier downgrade due to changes to tax legislation.
In the current fiscal year, the company expects revenues to grow a faster 5 percent to JPY 4.45 trillion, and operating profit should be up 2.9 percent to JPY 900 billion. Handset sales are expected to grow 7.7 percent to 23.8 million units this year, after an increase of 15.9 percent in the past fiscal year. Docomo targets a 50 percent increase in smartphones sold this year to around 13 million, of which 60 percent should be LTE devices. Data revenues are expected to accelerate to growth of 12.3 percent, after an annual increase of 9 percent already in fiscal Q4. The net profit should grow 20 percent to JPY 557 billion, helped by the shutdown of the 2G network, and capex will increase slightly to JPY 735 billion from JPY 726.8 billion last year.
Docomo targets growing coverage of its Xi LTE network to 70 percent this year, from 30 percent at the end of March. The enhanced coverage along with a new discount campaign starting this spring should support an increase in the subscriber base to around 10 million by March 2013, from 2.2 million at the end of March 2012. Total net subscriber additions should reach 2.80 million this year, up from 2.12 million in the past year. Docomo also pledged an increase in its dividend for fiscal 2013, to a total JPY 6,000 from JPY 5,800 last year.
