Japan’s No. 2 Mobile Carrier Falls After Massive Outage

·2-min read

(Bloomberg) -- Japan’s second-largest mobile carrier by subscribers fell in Tokyo trading after a nationwide disruption of its services over the weekend. As many as 39 million mobile lines were affected, preventing users from making calls or using data services, until the network was almost fully restored Monday afternoon.

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KDDI Corp., in an unusually large swing for a typically stable stock, dropped as much as 3.9%, its biggest intraday fall since March 30. Shares pared their losses by the close, falling 1.7%, but still trailed the Topix index’s 1.3% gain.

The network disruption began early Saturday and impacted KDDI users nationwide as well as other platforms using the carrier’s network, such as weather services, parcel deliveries and ATMs. Rakuten Mobile, operated by e-commerce company Rakuten Group Inc., said its users were also affected. Voice and data transmission have been almost fully restored as of 4 p.m. local time, KDDI said.

“We deeply regret what happened, as a telecommunications company that should provide a stable service and support social infrastructure,” KDDI President Makoto Takahashi said at a news briefing Sunday, according to local broadcaster NHK. “We’re doing our best on recovery efforts.”

This isn’t the first time Japan has suffered significant mobile network problems. NTT Docomo Inc. reported an outage in October that disrupted phone and data communications services nationwide. The government told NTT Docomo in November to improve operations following the incident.

The incident is “very regrettable,” Yasushi Kaneko, minister in charge of Japan’s communications, said at a press conference Sunday. KDDI should take drastic measures to prevent any recurrence, he said. The ministry is considering issuing administrative guidance, the Asahi newspaper reported, without attribution.

“This will have a negative impact on share prices in the short term,” Mitsubishi UFJ Morgan Stanley analyst Hideaki Tanaka wrote in a report after the KDDI disruption. “But this is a risk that all major carriers have. I don’t think this will cause major changes to the number of subscribers.”

(Updates first and third paragraphs to say service has been almost fully restored.)

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