Docomo Plans $8.8 Billion in Spending on 5G Infrastructure
(Bloomberg) -- NTT Docomo Inc., Japan’s second-biggest mobile phone carrier by sales, plans to invest 1 trillion yen ($8.8 billion) on infrastructure over five years for 5G services that allow faster data transmission.
The carrier also increased planned investment this year by 10 billion yen for offering “pre-commercial” 5G services at limited locations including airports, stadiums and Docomo premises by September 2019, the company said in a presentation Wednesday, along with second-quarter earnings. The company also raised its estimate for capital spending this year to 590 billion yen, from a previous target for 570 billion yen.
- The carrier didn’t give financial projections for the impact of 5G, though it did offer a target for operating profit of 990 billion yen in fiscal 2023, about 2.3 percent less than the average analyst estimate for the year ending March 2019.
- The technology promises 10 times to 100-times faster transmission and cuts lag time to milliseconds, enabling services such as high-definition streams of sports events in virtual reality, self-driving cars and surgical robots.
- The mobile phone giant also responded to government pressure to cut prices by introducing a plan offering rates that are between 20 percent and 40 percent lower, returning about 400 billion yen a year to customers, starting April 1, according to the presentation.
- The carrier also said it will repurchase as much as 7.24 percent of its stock, paying 600 billion yen, to help drive up shareholder returns. It will consider canceling all the shares it buys back, according to the presentation.
- Docomo lowered its forecast for net income in the current fiscal year by about 3.6 percent to 670 billion yen. That would be a 10 percent drop from the previous year, the first drop since fiscal 2015.
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