DoCoMo - The Japanese Wireless Telecom Leader

Details

Themes: Differentiation
Period : 1992 - 2003
Organization : NTT DoCoMo (DoCoMo) Inc
Pub Date : 2003
Countries : Japan
Industry : Telecommunication

Buy Now

Case Code : BSTR049
Case Length : 17 Pages
Price: Rs. 500;

Tools

<< Previous

I-Mode: DoCoMo's Success Story Contd...

Meanwhile, I-Mode's popularity in Japan continued to soar. According to analysts, I-Mode was nothing less than a phenomenon in the Japanese mobile telephony market. Due to its easy-to-use nature and affordability, the subscriber growth was so fast and so high that the company faced capacity problems in early 2000. Reportedly, DoCoMo suffered 16 disruptions in its I-Mode service by April 2000, casting doubts on the ability of the service to accommodate the increasing subscriber base.

However, the company solved the problem by improving the technology used. By early 2001, the subscriber base in Japan accounted for more than 60% (18.1 million) of the 30 million mobile Internet customers in the world. Reportedly, this figure was increasing by 50,000 per day during early 2001, with the Japanese youth taking to I-Mode in a major way. Company sources mainly attributed the success of I-Mode to its simple and efficient network access, its middleware software, its business model and its positioning.

The I-Mode network was based on Personal Digital Cellular Technology - a technology that allowed the data to be sent to its destination in parts called packets. Both the network and the middleware software were DoCoMo's proprietary services. The company's middleware software was based on compact HTML (cHTML), a subset of HTML, identical to WAP⁴.

cHTML was used to create the content of I-Mode sites, as it enabled content providers to easily convert their HTML Internet site content into an I-Mode compatible format with minor programming changes.

This flexibility in operation helped DoCoMo to attract more content providers onto the I-Mode platform. Another reason that triggered I-Mode's growth was the business model DoCoMo adopted from AOL's packet billing model. According to this model, billing was based on the volumes of data received and sent by the subscriber and not on the amount of time spent on the Internet. This meant that unlike the traditional billing model, which billed the subscribers on the basis of time they stayed connected to the Internet, I-Mode users were billed only when they sent or received any data.

However, DoCoMo altered AOL's model to include incentives for content providers as well to encourage them to develop innovative applications and services (Refer Exhibit IV for the strengths of DoCoMo's business model). Growing e-commerce transactions on I-Mode also contributed to its I-Mode's success. DoCoMo realized that most of its customers were not very comfortable making payments through the Internet. To address this issue, the company started adding the value of its customers' online purchases to their monthly bill.

This was not only much more convenient, but also gave the customers a sense of security - something they felt was missing in online payments. As a result, there was a substantial increase in e-commerce transactions through I-Mode. The success of I-Mode was also credited to DoCoMo's clever marketing strategies. Reportedly, the company consciously chose not to refer to the term Internet or Web in its promotional campaign for I-Mode during the first year of its launch.

This was because the company wanted to keep its services simple and did not want to create any unrealistic expectations among the customers. The other reason for such a carefully subtle promotional exercise was to differentiate the service from the Web and WAP services available across the world. I-mode was positioned as a simple, usable and fun-to-use service.

Next >>

4] Wireless Application Protocol (WAP) is a specification for a set of communication protocols to standardize the way in which wireless devices (cell-phones, radio receivers etc.) can access the Internet.