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NTT Com drops 5.8B yen in Q2, stops ADSL signups

Japanese telco NTT Communications has revealed a decline in net income of over 25 percent for the second quarter of 2015, with declining revenues across its voice and data businesses.
Written by Corinne Reichert, Contributor on

NTT Communications has released its results for the second quarter of 2015, with the Japanese telco giant reporting net income of 16.7 billion yen ($134.2 million) -- plummeting 25.7 percent, or 5.8 billion yen, from the 22.4 billion yen reported during same period last year.

The company's operating revenues rose by 5.6 percent year on year, however, from 296.2 billion yen last year to 312.9 billion yen ($2.5 billion) in the quarter ended June 30, 2015.

Its telecommunications business fell significantly, with an operating income of 13.7 billion yen ($110.1 million), a decrease of 36.6 percent from the 21.6 billion yen reported during the same period last year.

NTT Com's data networks and voice communications revenues also fell in the quarter: The former by 2.4 percent, from 93.3 billion yen to 91.1 billion yen; and the latter by 7 percent, from 69.2 billion yen down to 64.4 billion yen.

Only its cloud computing, applications and content, and solution services segments rose. Cloud computing revenues increased by 15.1 percent year on year, from 14.6 billion yen to 16.8 billion yen, while applications and content revenue rose by only 1.8 percent, from 9.4 billion yen to 9.6 billion yen. Revenues for its solution services segment rose by 14.9 percent, jumping from 27 billion yen to 31 billion yen.

Despite losses in its telecommunications business across data and voice, the Japanese mobile services provider confirmed to ZDNet that while it continues to provide ADSL broadband access to its subsidiaries NTT-East and NTT-West, those groups ceased accepting new orders after June 30.

"However, there is no actual service retirement date, and there is no influence to the existing ADSL customers," NTT Com told ZDNet in a statement.

The company is meanwhile working on expanding its operations globally, including in Europe and the Unites States.

In late June, NTT Com acquired an 86.7 percent stake in E-shelter, a German datacentre company, for an undisclosed amount, increasing its European datacentre footprint to 92,000 square metres across nine cities.

In August last year, NTT Com said it plans to hit $20 billion in revenues by 2016, with its Silicon Valley research and development centre working on developing and patenting new technologies and apps, and the company continuing to make acquisitions for growth in the US.

"We now have the full IT stack for enterprises and we have a global footprint to help them expand. It's how we differentiate ourselves from anyone else," said Kazuhiro Gomi, CEO of NTT America.

At Mobile World Congress (MWC) in March, NTT DoCoMo partnered with Nokia to demonstrate 5G technology that showed off download speeds of 2Gbps using the 70GHz band of the millimetre wave spectrum.

"Utilising higher-frequency bands including millimetre wave is key to deliver extremely high performance in 5G," NTT DoCoMo CTO Seizo Onoe said at the time.

"We believe that high-frequency spectrum shall be used not just for small cells as a means to complement the existing network, but also for building solid area coverage through coordination with existing lower-frequency bands. The success of this indoor trial with Nokia Networks using the 70GHz band marks an important step forward in our 5G vision for 2020."

The company hopes to have 5G networks operational in time for the 2020 Tokyo Olympics.

In May, the mobile provider also announced that it would be implementing biometric credentials such as fingerprint and iris authentication, as a password replacement for its online services.

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