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February 7, 2007 10:18 pm

Customers flee NTT DoCoMo

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NTT DoCoMo, Japan’s biggest mobile carrier by market share, on Wednesday reported its worst January subscriber figures after losing thousands of customers to rival KDDI.

Masao Nakamura, DoCoMo’s chief executive, responded to the data on Wednesday by telling the Financial Times that “it is difficult to find a weakness right now” in its competitor.

But Mr Nakamura insisted his company would soon be able to stem the customer defections with a range of new products, including mobile handsets equipped with televisions, to be launched in time for the important spring season.

DoCoMo gained only 7,000 customers on a net basis last month – the worst January since it was launched, according to the company. The monthly numbers follow other disappointing numbers in recent months, including an outright net loss in November – the first since DoCoMo started.

Number portability, a system introduced in October, allows customers to change carrier without changing their phone number.

DoCoMo lost almost 100,000 subscribers to other carriers last month because of number portability.

This almost wiped out the gain of a little more than 100,000 customers new to the mobile market, leaving the company with the 7,000 net gain.

DoCoMo’s situation is, in one respect, worse than the figures look. New subscribers tend to spend less each month than the seasoned mobile users who defect from one carrier to another.

Asked to explain why DoCoMo customers were defecting to KDDI, Mr Nakamura said there “are perceptions that our 3G network is still inferior compared with our 2G network; we have to eliminate this”. He said DoCoMo was investing heavily in its network, and added: “Our 3G network is already enjoying a good reputation, has been improving, and is nearly equal to KDDI’s.”

Mr Nakamura admitted DoCoMo’s share price has been “stagnant” in recent months. Analysts blame this on its loss of market share. But DoCoMo leapt 4 per cent to Y206,000 on Wednesday.

Traders suggested the company, which has a dividend yield much higher than the Japanese average, was gaining from recent buying interest in such stocks.

KDDI gained a net 208,000 customers in January. Softbank boosted subscribers by 164,000 in spite of a net 10,000 defections to rivals.

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