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NTT DoCoMo has been under intense competitive pressure in recent quarters, as the Japanese market saturates and new players enter the game. Its quarterly results showed a 15.1% decline in net profit to ¥147.4bn ($1.56bn), on revenue down 7.3% to ¥1,085 trillion ($11.46bn), even as rival Softbank enjoyed a 41.4% increase in profits on a slight revenue increase.

The main problem for DoCoMo was lower voice revenue amid increased competition and low cost tariffs - from KDDI and Softbank and also new entrant eMobile, which focuses on flat rate data services. The cellcos are engaged in a price war, which has forced all of them, especially Softbank, to launch cost cutting programs.

Softbank is the star of the Japanese show at the moment, after years of struggling when its mobile arm was owned by Vodafone. It has added net new subscribers for 26 consecutive months, a major achievement in such an overcrowded market, and now has 21m customers, compared to DoCoMo's 55m and KDDI's 31m. Softbank's net profit for the quarter rose to ¥27.38bn ($288m) from ¥19.37bn a year earlier, on revenue up 2.9% to ¥666.3bn. The main positive factors were lower procurement costs for its ecommerce business, lower phone inventory, and improved profits from fixed line internet and online services.

It also saw increased income from handset-based internet and data services, and all the big three report higher data ARPU even as voice prices crash. KDDI, which reported earnings last week, said profits increased by 20% even while revenues decreased, partly because of a greater focus on higher margin data offerings, but also because, ironically enough, the drop in handset sales brought on by the recession have lowered spending on subsidies.

DoCoMo reiterated plans to launch LTE services next year, though it is pushing the deadline as far as possible - to December 2010 - determined not to have to rely on pre-standard equipment as it did for 3G with its FOMA platform. Its first roll-out will be targeted at PC cards, said CEO Ryuji Yamada, and will be extended to dual-mode 3G/LTE handsets in 2011. By 2014 it plans to provide LTE service to 50% of the population from around 20,000 base stations at a cost of between ¥300bn and ¥400bn ($3.2bn to $4.2bn).

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