NTT DoCoMo Profit Fall Reflects Cell Phone Market Saturation

NTT DoCoMo, Japan's leading mobile phone carrier, reported its first-ever drop in profits yesterday, reflecting increased competition, a costly shift from 2G to 3G service, and a saturation of the Japanese cell phone market.

DoCoMo operating profits fell a steep 29% in the last fiscal year. "We have entered the 15th year of our business . . . and penetration [of mobile phones in Japan] is approaching 70% so we are beginning to see a limit to the growth of mobile phones," said DoCoMo president Masao Nakamura. The resulting market plateau is forcing all Japanese cell phone carriers to lower costs to attract new customers.

Source: Financial Times