DOCOMO deployed a network functions virtualization (NFV) system last year, but due to the complexity and time-consuming operations with network device provisioning, it has taken the initiative to fully improve its business efficiency by applying “automation” to various operations. Japanese operator NTT Docomo has agreed with 12 companies, namely Dell Technologies Japan, Fujitsu, Intel, Mavenir, NEC, NTT Data, Nvidia, Qualcomm Technologies, Red Hat, VMware, Wind River.
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Tight cost control drove NTT DoCoMo's profit in the first three quarters – and it's looking to further slash costs by acquiring affiliate NTT Communications.
DoCoMo reported a 4.5% boost in income on flat revenue, its last result as a separate company.
While total revenue was off 2.6 billion yen (US$24.6 million), the company took out 36.8 billion yen ($348 million) in operating cost.
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In its core telecom business, both revenue and operating profit were flat.
Once again, DoCoMo's Smart life content and payments services were the prime source of growth, reporting a 66% jump in operating profit and 18.4% higher sales.
Return to the mothership
DoCoMo was formally reabsorbed back into its parent on December 2020 after a $38 billion merger, though the mobile company will continue to report its results separately.
Executive Vice President Michio Fujiwara confirmed at a results briefing that the company is weighing the acquisition of fixed-line stablemate NTT Communications.
The merger offered greater efficiencies in both networks and sales operations, Fujiwara said.
NTT Communications, which recorded 795 billion yen ($7.5 billion) in sales in the 2019-20 financial year, provides transmission and backhaul for DoCoMo across Japan.
'Since we are in the era of convergence we will be trying to integrate the core network down the road,' Fujiwara said.
He said closer collaboration was inevitable but DoCoMo had not yet made a decision on whether to fully acquire the other company.
Bringing up the rear
The result showed DoCoMo's 5G business is growing slowly compared to its neighbors in Korea and China. It has clocked just 1.41 million subscribers since the service began last March.
But the pace of adoption looks set to accelerate as the local market is gripped by a series of price cuts.
However, DoCoMo says it won't be making further discounts to counter rival Rakuten.
Instead, Fujiwara signaled he wants to compete on non-price areas like quality, coverage and after-sales support.
'We hope that customers will look at this in a comprehensive manner,' he said.
He said DoCoMo had received a million applications for its new mid-range plan, Ahamo, announced in December. The new package, to be launched in March, is aimed at attracting customers in their 20s and 30s.
DoCoMo's return to its parent was expected to yield 'hundreds of billions of yen' in synergies over a number of years, NTT Corp Senior Executive Vice President Akira Shimada said.
The parent company announced a 4.3% increase in profit on 1.4% higher sales of 873.8 billion yen ($8.2 billion).
NTT's stock on the Tokyo exchange closed 1.8% higher at 2,739 yen.
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— Robert Clark, contributing editor, special to Light Reading
KYODO NEWS - Dec 3, 2020 - 22:16 | All, Japan
Japan's leading wireless communication carrier NTT Docomo Inc. said Thursday it will introduce a 20-gigabyte monthly plan in March for 2,980 yen ($29), pricing it lower than comparative services its rivals announced in October to launch under their budget carrier brands following government pressure.
The new plan called 'ahamo' is likely to pressure KDDI Corp. and SoftBank Corp. to cut their fees for their new 20-gigabyte plans. The three firms together control roughly 90 percent of Japan's mobile phone market.
Voice calls of NTT Docomo's new plan will be free as long as each call is five minutes or shorter. The service's name is derived from 'aha moment' of sudden inspiration.
KDDI, operator of the 'au' brand, is set to start a 20-gigabyte plan without voice calls for 3,980 yen per month from February or later under its UQ Mobile brand, while Softbank will introduce its 20-gigabyte plan with up to 10 minutes of free voice calls for 4,480 yen a month under its Y!Mobile brand from late December.
The cheapest voice call option for KDDI's new plan will cost 500 yen for up to 60 minutes of calls a month, putting the new service on a par with SoftBank's.
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The 'ahamo' plan will also represent a sharp fee cut compared with NTT Docomo's existing services. The company's similar data usage plan offering 30 gigabytes a month currently costs 7,150 yen.
'Our competitive price plan targets younger people in their 20s, for whom we lagged behind rivals,' NTT Docomo President and CEO Motoyuki Ii said at a press conference, adding the company aims to announce later in the month lower fees for existing contracts under other price plans.
Chief Cabinet Secretary Katsunobu Kato, the top government spokesman, welcomed NTT's announcement, saying at a press conference, 'It is desirable for consumers that wireless carriers are announcing lower price plans.'
Prime Minister Yoshihide Suga, who took office in September, has repeatedly asked mobile phone carriers to slash fees, saying their charges are high compared with other countries while their profit margins are bigger than other infrastructure providers such as utilities.
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NTT Docomo's Ii said the government's call to lower charges reflects the view of the public and the company agrees it is important to provide cheaper mobile phone services.
But rather than succumbing to government pressure, Ii said the company had introduced the cheaper plan 'to win the competition with our rivals.'
The largest wireless carrier by subscribers in Japan had initially planned to establish a new budget brand to introduce the drastic pricing strategy and match the planned new offerings of KDDI and SoftBank, sources close to the matter said.
NTT Docomo changed the initial plan after telecommunications minister Ryota Takeda made remarks last month critical of the strategy of KDDI and SoftBank to use budget brands to introduce cheaper services, the sources said.
Ii said his company is considering jointly launching reasonably priced plans for lower data usage with so-called mobile virtual network operators that do not own network infrastructure.
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The monthly fee in Tokyo of 8,175 yen for 20 gigabytes as of March was the highest charged by major carriers in six world cities including New York, London, Paris, Seoul and Dusseldorf in Germany, according to a survey released in June by the Ministry of Internal Affairs and Communications.
NTT Docomo's setting of the price of the 20-gigabyte monthly plan at 2,980 yen follows new wireless operator Rakuten Mobile Inc.'s rollout of a single fee plan at the same price in April for unlimited calls and data services in some urban areas including Tokyo, Nagoya and Osaka.
NTT Docomo is preparing to boost its competitiveness by becoming a wholly owned unit of parent Nippon Telegraph and Telephone Corp, a former state monopoly, by the end of December, raising concern among its rivals that the integration could impair fair competition.
The scheduled delisting from the Tokyo Stock Exchange in late December is expected to relieve NTT Docomo from pressure to return more profits to investors and free up a larger portion of its earnings for more aggressive pricing strategies.
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On Thursday, the ministry held the first meeting of a panel of telecom industry professionals, set up after the planned merger was announced in September, to discuss an environment for fair competition.
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'We fear that the NTT group's move toward integration will expand its control over the market,' KDDI President Makoto Takahashi said at the meeting.
Meanwhile, NTT said no additional restrictions are needed as the company is complying with laws and rules to ensure fair competition.
Dec 3, 2020 | KYODO NEWS