KDDI booked solid revenue growth in its fiscal Q3 2021 (ending 31 December 2020), driven by brisk 5G handset sales and increases in subscribers and ARPU.
Net profit fell 4.1 per cent year-on-year to JPY175.8 billion ($1.7 billion) due to a hike in depreciation and amortisation expenses, and an increase in fixed asset write-offs.
Operating revenue rose 3.6 per cent to JPY1.39 trillion, with mobile service turnover up 2.1 per cent to JPY578.8 billion and MVNO revenue 51 per cent higher at JPY25.5 billion.
Handset sales rose 11.4 per cent to JPY199 billion, driven by the launch of Apple’s iPhone 12 range. The company said overall 5G smartphone sales exceeded 1.2 million units in December.
KDDI noted the business environment surrounding its operations was affected by Covid-19 (coronavirus), but noted steps to adjust its strategy and management approach mitigated the impact.
Capex increased 14.5 per cent to JPY157.4 billion
Net additions
The company added 2 million mobile subscribers to end December with 60.1 million. ARPA increased 4.6 per cent to JPY8,130.
On an earnings call, executive director of KDDI’s corporate sector Shinichi Muramoto said as the ratio of discounted plans under the UQ Mobile and the new Povo brands increases, ARPU will tend to decline going forward.
Life Design revenue rose 11.2 per cent to JPY337 billion, while business services increased 5.2 per cent to JPY245.8 billion.
Atul Goyal, equity analyst at Jefferies, said in a research note its outlook for KDDI remains conservative, accounting for the impact of pricing pressures given rivals’ new tariff plans and government intervention.
KDDI introduced discounted 5G plans [1] available online in mid-January.
Muramoto said it started offering 5G in all prefectures in December 2020 and continued to target deployment of 50,000 base stations by end-March 2022.
[1] https://www.mobileworldlive.com/asia/asia-news/kddi-tackles-price-pressure-with-online-offer
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