DoCoMo's Change of Tack Boosts i-mode Overseas
By Carlo Longino, Wed Mar 30 04:00:00 EEST 2005

Directly investing in foreign carriers was a fairly hefty blunder for NTT DoCoMo. It took big financial losses, and failed to establish i-mode as a global force. But a new president and a new plan have seen things change significantly.


Former DoCoMo CEO Keiji Tachikawa led a number of huge investments in overseas carriers like AT&T Wireless and Three in the UK, in hopes of turning the operators into users of its i-mode system. The plan failed, to say the least, costing the company $17 billion in writedowns -- a far cry from its runaway success in its home market. But when Masao Nakamura was installed as CEO, the company took a different course, pulling back from the direct investments and focusing on licensing i-mode to other carriers.

TelecomAsia.net's got a good analysis of the new plan, which resulted in a global i-mode footprint covering 176 million users (that's potential users; there are about 4 million i-mode subscribers outside Japan) and an alliance approaching the scale of other groups like Starmap and Freemove -- something that will help turn more operators on to i-mode, if only for the benefits in handset sourcing. Vodafone has leveraged its size with its One Vodafone initiative, handling sourcing on a global basis to squeeze vendors' prices, and it's something smaller operators are keen to get in on. For operators in Asia or elsewhere in the world that don't fit in the other, European-dominated alliances, i-mode offers them a place at the table.

But the scale comes into play in areas other than just handsets; mobile content is helped here as well, since there's now a viable base of i-mode users to sell content to. And developers are also encouraged by the fact they can reuse content across multiple markets fairly easily, since each operator follows the same basic standards. The TelecomAsia report cites how existing Greek and Italian content was used for Telstra's Australian i-mode launch to cater to that country's sizable ethnic populations.

The launch of i-mode by O2 in the UK and Ireland later this year (and Germany next spring) should cement i-mode's place as a global force. In addition to giving the technology a foothold in some major European markets. O2 should be able to deliver a lot of developers to the table from its already successful O2 Active WAP portal, feeding more content and applications into the global pipeline. One interesting sidenote will be to see how O2 positions i-mode along Active, which it has said it will continue, letting customers decide which they want to use.

DoCoMo has set up all these virtuous cycles that only make things better as i-mode becomes more pervasive. Given the company's track record, it's certainly not unintentional. Getting over the initial hump and attracting a number of carriers that could deliver a decent number of users was the first challenge, and it's been overcome. But the real key has been setting up the i-mode alliance to offer tangible benefits to operators that join, adding value beyond the well-documented business model lessons behind it.