DoCoMo - The Japanese Wireless Telecom Leader

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

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

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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.

TABLE II
FUNCTIONING OF I-MODE

• Customers desirous of accessing I-mode were required to press the 'I' button present on DoCoMo's cell phones.
• The 'I' button connected the phone directly to the Internet with help of an I-mode gateway.
• When the connection was established, a menu was displayed along with an option to choose between Japanese or English language to proceed further.
• The customers could also type in URLs to access various websites, to get the content they required.

Source: www.ebstrategy.com

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.

By November 2000, DoCoMo had invested up to $16 billion in overseas cellular companies. This was in the form of minority stakes in Hutchison Telecom (Hong Kong), KPN Mobile (Netherlands) and 3G UK Holdings (Refer Exhibit III for DoCoMo's partners). Though these minority stakes did not yield much profit to the company, they served DoCoMo's primary aim in gaining international footage through them. As part of the investment agreement, these companies agreed to roll out DoCoMo's I-Mode and 3G mobile services.

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