DoCoMo's Days Ahead
By Eric Lin, Mon Mar 01 23:30:00 GMT 2004
The Japanese giant still has the strongest market share in Japan, but they're no longer signing up more subscribers than their competitors. Last week DoCoMo fired the first shot across KDDI's bow, announcing they would introduce a flat rate data tariff. That announcement has been followed by rumors of DoCoMo pulling up its stakes in AT&T Wireless as well as 3 UK.
Last month KDDI signed up nearly four times more new subscribers than DoCoMo, following the launch flat rate data tariff on their 1x EV-DO network. The eventuality that NTT DoCoMo would have to offer an all you can eat data tariff must have been obvious to the Japanese Press, because Nikkei Biztech practically glosses over President Keiji Tachikawa's announcement of flat rate data pricing in favor of covering his statements regarding AT&T Wireless and Cingular.
Tachikawa said DoCoMo would be willing to continue its agreement with AT&T through Cingular, and that AT&T has told him Cingular is interested in a deal. M-Mode, AT&T's online services, have been some of the most successful in the US under DoCoMo's coaching, and Cingular could stand to gain from this. However part of this bargain is that AT&T (or possibly Cingular) would have to launch a 3G network in at least four cities. Tachikawa claimed he believed the network could be ready to launch before the end of the year, however considering the Federal Communications Commission hasn't even auctioned off 3G spectrum yet, we wonder how this is possible. Are they building out a network in the 1900 mhz PCS spectrum that FOMA also uses?
America's Network points out that the analysts expected DoCoMo to sell off it's stake AT&T in order to put the money towards shoring up finances at home. They have already completed one stock buy back program and look set to launch another. AT&T isn't the only network the analysts expect DoCoMo to drop. Rumors circulated today that they are expected to pull out of their investment in Hutchinson's 3 since 3 has made no moves to offer i-Mode services in the years since the deal. 3G Newsroom and others suggest DoCoMo may use this opportunity to switch to mmO2 instead of pulling out of an investment altogether.
Maybe the analysts have underestimated DoCoMo. They expected the phone giant to divest abroad and concentrate their financial efforts at home after just a few bad months, but these aren't months of losses, the gains just weren't as big as expected. It seems they will continue to make an assault on all fronts- updating prices at home to compete with up and coming carriers, and re-evaluating their investments abroad. DoCoMo is in a slump, but don't call it a downturn just yet. Competitive pricing and more cooperative partners could quickly and easily turn their luck around.