NTT Group upped its enterprise focus by creating a group combining its mobile, and ICT and international businesses, targeting a profit increase of JPY100 billion ($876.9 million) in fiscal 2023 (the year to end-March 2024).
Docomo Group comprises NTT Docomo, NTT Communications and systems integrator NTT Comware. In a statement, the parent projected the combination to drive cost reductions in fixed-line and mobile access networks of more than JPY200 billion in fiscal 2023. It also expects to generate an additional JPY200 billion in profit during fiscal 2025.
In what it calls a refinement of its medium-term management strategy, NTT explained the integration aims to enhance its domestic and global business.
Marc Einstein, chief analyst at Japan-based research company ITR, told Mobile World Live the move was expected, as NTT’s mission for many years has been to unify group companies to realise synergies.
“The timing is a little surprising but was undoubtedly pushed forward due the pressure operators in Japan are facing from ex-Prime Minister Yoshihide Suga’s 5G price cuts and an unprecedented level of competition.”
If executed well, Einstein noted the move holds the potential to make the new company an IoT powerhouse in the country and could ultimately be a key driver in unlocking 5G B2B opportunities.
The merger comes a year after state-backed NTT unveiled plans [1] to take its listed subsidiary NTT Docomo private.
[1] https://www.mobileworldlive.com/featured-content/home-banner/ntt-moves-to-take-docomo-private-for-38b
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