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To: Ruffian who wrote (16145)	10/8/1998 8:19:00 AM
From: 2brasil	Read Replies (1) \| Respond to of 152472

=ot w-cdma NTT Docomo bull run seen over next few years By Yuko Inoue TOKYO, Oct 8 (Reuters) - NTT Docomo, the world's largest mobile phone operator set to go public later this month, will maintain its phenomenal profit growth over the next few years, though mid-term prospects are less certain, analysts say. NTT Docomo, the mobile phone unit of Nippon Telegraph and Telephone Corp , will announce the pricing for its initial public offering (IPO), the world's largest ever, on Monday. The massive share offering scheduled for October 22, which is expected to raise up to 2.3 trillion yen ($19.8 billion), comes at a time when market volatility and falling valuations have already nixed many IPOs around the world. Still, analysts see the appropriate share price around the high end of its pricing range, at about four million yen. Several say the price could climb in the secondary market to as high as five million yen, aided by strong demand from both institutional and retail investors. Behind their bullish stance is Docomo's potential to continue dominating Japan's mobile phone market, the world's second-largest, and improve its profitability in the next few years despite a worsening earnings environment. After achieving a nearly six-fold increase in group net profit in the past two years, analysts say Docomo's record-breaking growth momentum is certain to slow down. They say revenue growth will slow, its market share will erode and revenues per customer will decrease, while capital spending will increase for the 2001 launch of the next-generation phone service, called W-CDMA (wide-band code division multiple access). Still, Docomo is seen managing to improve its profitability at least until 1999 thanks to lower sales promotion fees and its massive savings from 20 million subscribers who will continue paying fees. Docomo, with a dominant 57 percent market share, is also unlikely to face rate cut pressures from surprise competitors in the relatively static business in which the government controls frequencies. ''Docomo is a quality, defensive share with relatively small risks,'' said an analyst, who asked not to be identified. The crucial issue for Docomo is managing its personal handyphone service (PHS), a loss-maker that Docomo will take over from parent NTT in December, analysts say. Docomo expects the cost of buying the PHS business and the losses generated by the operations in the current business year to reach 290 billion yen. The PHS, which has a smaller range than traditional mobile phone services, has not made a profit since it was launched in 1995. Analysts also remained sceptical about W-CDMA, dubbed vital to Docomo's growth strategy. W-CDMA will allow voice, data and video to be transmitted through mobile phones. But analysts agree W-CDMA's bandwidth will be too narrow to allow many subscribers to use the multimedia services at the same time, although it could offer Docomo room for further growth. (Tokyo newsroom +81 3 3432-8595