DoCoMo set to blaze high-tech trail

Mobile telecom leader to beat rivals to punch with IMT-2000

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Riding the popularity of its i-mode mobile Internet service, NTT DoCoMo Inc. President Keiji Tachikawa is aiming to capture a “gold mine” popularly known as Japan’s mobile multimedia market

Tachikawa, 60, has been at the helm of the nation’s No. 1 mobile telecommunications carrier since June 1998. Established in 1992 as a spinoff from telecom giant Nippon Telegraph and Telephone Corp., DoCoMo has been leading Japan’s cellular phone business, and Tachikawa now feels confident that Japanese consumers are ready for the third generation of mobile high-tech wizardry: International Mobile Communications-2000 (IMT-2000).

“We have been rehearsing for the third-generation (system) since 1995,” Tachikawa said, referring to the various services DoCoMo has developed to hook its users.

In the 13 months since its debut, i-mode has attracted some 5.8 million subscribers, which amounts to 10 percent of Japan’s 55 million mobile phone users and about 18 percent of DoCoMo’s own customer base.

The i-mode service allows people to exchange e-mail and read news programs online and will be expanded later this year to allow wireless distribution of music and game software as well.

But DoCoMo, which holds 57 percent of the domestic mobile phone market, plans to make the lead over its rivals even wider when it launches IMT-2000 in May 2001.

IMT-2000 is a system designed to allow high-speed, high-volume communications through mobile phones from any point in the world. The system, adopted by the International Telecommunication Union, may rival the sound quality of fixed-line services and let users download music, play video, and even conduct video conferences.

The system employs a digital radio technology called code division multiple access (CDMA) to transmit data at speeds of up to 2 megabits per second, or about 200 times faster than current technology allows.

The Ministry of Posts and Telecommunications estimates the next-generation technology will develop domestic demand on the order of 42 trillion yen over the coming decade, with some of it spilling into non-telecom sectors.

However, it will be some time before consumers are able to enjoy the full benefits of IMT-2000 on a global scale. NTT DoCoMo plans to introduce the system on a bilateral basis with South Korea during the World Cup soccer games the two will cohost in 2002.

“It would be ideal if the same level of (mobile) telecommunications was made available throughout the world,” Tachikawa said. “With demand growing for mobile multimedia, it is meaningless that users can receive services in Japan but not abroad.”

NTT DoCoMo aims to become the first Japanese carrier to introduce IMT-2000, planning initial service for Tokyo’s 23 wards and the cities of Yokohama and Kawasaki, Kanagawa Prefecture. It will gradually expand to the rest of the nation over a three-year period.

Hot on DoCoMo’s heels will be its two domestic rivals: the DDI Corp. and Japan Telecom Co. groups. Both also have their own versions of i-mode respectively called EZ web and J-Sky Web.

Japan Telecom plans to launch IMT-2000 services in fall 2001, while DDI will get off to a late start in 2002.

Although the two carriers may catch up to DoCoMo in a relatively short time, six months is a strong lead in the rapidly evolving high-tech world, Tachikawa said.

For its global strategy, the construction of a network is one of DoCoMo’s most important objectives, Tachikawa said.

The priority for global operations will be Asia. Japan’s proximity to the mainland and the large volume of cross-border interaction make its own region a market that cannot be ignored.

While foreign carriers are battling for control of the European and North American markets with buyouts and takeovers, DoCoMo is quietly promoting cooperation with carriers in Asia, where competition is lighter. But the aggressive pursuit of management or capital control is not DoCoMo’s style, Tachikawa said.

Such an assertion may sound overly cautious for a company whose market capitalization hit 40 trillion yen at the end of February, but Tachikawa is adamant.

“If we get requests for capital participation, we may extend our help. But we would not approach them. The idea of doing takeovers and management control is not an option,” he said.

Last December, DoCoMo invested $410 million to obtain a minority stake of 19 percent in Hutchison Telephone Co., a leading cellular operator in Hong Kong. But that is DoCoMo’s only case of capital participation in an Asian carrier.

Tachikawa said he would apply the same policy to China, the world’s biggest potential market. China’s expected entry into the World Trade Organization will supposedly be accompanied by more transparency in its business conduct.

“It would be ideal if Asian carriers judge NTT DoCoMo as an appealing partner. If we tell them we have no intention of taking over, they might find that very appealing,” Tachikawa said with a grin.