DoCoMo user base hit by number portability

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NTT DoCoMo lost customers last month for the first time in its 14-year history as Japan’s biggest mobile phone operator was hit by stiff competition ushered in by the new number portability regime.

The group said it lost 17,500 clients in November, the first full month after rules were introduced to allow Japanese mobile phone users to switch carriers without changing their phone numbers.

But in the same period rival KDDI saw an increase of 324,000 in new customers, as its reputation for good music services and sound quality for phone conversations continued to attract new customers.

DoCoMo blamed the loss on the fact that it did not release its new range of handsets until mid-November – too late for the arrival of the new regime on October 24. However, DoCoMo’s rivals were also unable to to offer all their new handsets in time.

One telecoms analyst said this was likely to mark the low point in DoCoMo’s fortunes.

November is a slow month for mobile phone companies in Japan, with few customers starting to use mobiles for the first time.

This made DoCoMo’s reported figures particularly vulnerable to customer defections. The analyst said DoCoMo’s figures were likely to pick up in December, as brand new customers entered the market and as the initial rush of defections at the beginning of number portability came to an end.

So far “the outcome of number portability has been in a sweet spot for the whole industry”, since no operator “feels any real pain”, the analyst said.

DoCoMo said, however, that while it lost 160,000 as customers took advantage of number portability, this was mitigated by a gain of 142,500 brand-new customers. Of KDDI’s 324,900 new users, 225,300 came from its rivals. Switching customers tend to be more profitable than brand new customers, because they are heavier users.

Meanwhile, Softbank appeared to enjoy a better month than some analysts had expected. Its figures showed a net 68,700 subscribers as brand-new mobile users more than made up for 53,900 defections.

An FT investigation revealed this week that a change in the way Softbank counts its subscriber numbers saved it from having to declare a net reduction in October. The group was able to report a net gain in subscribers only by extending the period for which it counts inactive users from six months to a year.

NTT DoCoMo had 52.1m users at the end of the month, giving it a market share of 55 per cent. KDDI’s 26.9m accounted for 29 per cent, with Softbank holding the remaining 16 per cent.

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