DoCoMo's First Choice for Next Leader Nixed by NTT
By John Alderman, Thu Apr 22 20:00:00 GMT 2004

A family squabble seems to have resulted in the rejection of NTT DoCoMo's first choice for its next chief by company parent NTT.

According to a source quoted in the Asahi Shimbun, NTT vetoed the appointment of Shiro Tsuda to replace Keiji Tachikawa, putatively on the grounds that he came from an engineering background. The company normally likes to rotate chiefs between businessmen and engineers, at the standard rate of one leader every six years.

Though DoCoMo was spun off of NTT along with a several other divisions as a way of encouraging diversity (and letting some dead wood sink or float), the independence seems to have become too much for its jealous parent. NTT has the majority stake in DoCoMo, giving it final say in these decisions.

The new choice of leader, to be confirmed in June, seems to be Masao Nakamura, who, like Tsuda, is currently a senior executive vice president. Nakamura’s background in labor relations and administration is seen as very helpful in a company with 45.9 percent government ownership and strong block of organized labor; it also happens to match the background of current NTT president, Norio Wada. Nakamura is described as a company man who knows how to get along.

While reading the messages that come from such an opaque company is difficult, if this is really the thinking of NTT, it raises the issue of how serious the split-up was. Kazuyo Katsuma, a JP Morgan telecoms analyst, told Forbes that this was a “litmus test” about company independence. Does the litmus pick up over-protectiveness?

The Financial Times said that Wada intends to “realize greater synergies among NTT group companies” and seems keen to check the independence. At $106.4 billion, DoCoMo’s market capitalization is bigger than NTT’s.

Meanwhile DoCoMo announced Thursday that it would release a special “commemorative year-end dividend” of 500 yen (about $5), raising total dividends 50 percent. What’s the reason behind this generosity? A company release said, it was “in recognition of i-mode subscriptions surpassing the unprecedented 40 million mark.”