DoCoMo: The Japanese Wireless Telecom Leader|Business Strategy|Case Study|Case Studies

DoCoMo: The Japanese Wireless Telecom Leader

            
 
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Case Details:

Case Code : BSTR049
Case Length : 17 Pages
Period : 1992 - 2003
Organization : NTT DoCoMo (DoCoMo) Inc
Pub Date : 2003
Teaching Note : Available
Countries : Japan
Industry : Telecommunication

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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EXCERPTS

I-Mode: DoCoMo's Success Story

I-Mode became an instant success, resulting in a phenomenal growth in DoCoMo's subscriber base. The fact that the usage of the Internet was still in its infancy in Japan till then worked to the company's advantage.

I-Mode resulted in a huge surge in DoCoMo's profits in the very first year of its launch. According to reports, on an average, I-Mode generated 30% higher revenues per subscriber as compared to DoCoMo's phones that provided only voice services. In 2000, the company reported a net income of $ 2.4 billion, a 39% increase from the previous year. To leverage the success of I-Mode, DoCoMo announced its plans to develop third generation (3G) services in late 1999. The company also announced its global strategy to establish itself as a global player expanding its operations outside Japan. Under this strategy, DoCoMo planned to take up minority stakes in less evolved cellular companies worldwide to establish itself as the first global cellular telecommunication giant...

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DoCoMo - Beyond I-Mode

In early 2001, DoCoMo announced the development of Freedom of Mobile Multimedia Access (FOMA), a 3Gservice that was to be launched in May 2001. As a part of this, through the early half of 2001, the company used I-Mode's success to acquire minority stakes in various cellular companies around the world.

Commenting on this, Natsuno Takeshi, Executive Director, DoCoMo said, "No one ever expected this to happen a year and a half ago. Only those who witnessed the shift [i.e. DoCoMo] can imagine what to expect with 3G. DoCoMo alone is very sure of the potential of 3G, because we have already experienced the explosive success of the data business. Our overseas business is to offer our know-how. We cannot give it away free, but we can make a minority investment in interested partners. I think it is a perfect strategy." Analysts pointed out that though DoCoMo had tried earlier to enter the global arena with I-Mode through its deals with few cellular companies, it could not succeed due to I-Mode's incompatibility with the digital transmission standard used worldwide...

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