Presentation

On

Case Study Of
DoCoMo
The Japanese Wireless Telecom Leader
Presentation compiled by;
ITM-KHARGHAR EMBA Batch-12th
Group members

Deepali Gopal krishnan KH08MARMBA14

Manas V Khaire KH08MARMBA32

Deepak Arora KH08MARMBA13

Sukhvinder Kaur KH08MARMBA63

Amit Singh KH08MARMBA07

Gopal krishnan KH08MARMBA21

 START OF NTT-DoCoMo
 History of NTT DOCOMO is the history of mobile communications in Japan itself .

 Telecom started in 1949 when Ministry of Communication in Japan split into MTEL
& Mop .

 MTEL was renamed as NTT & was a monopoly for telecommunications in Japan.

 In the late 1980`s Japan finally decided to reform its telecom regulatory framework to
allow foreign players into Japan.

 DoCoMo began its operations in July 1992.

 The Initial portfolio included Mobile phones , Car Phone , Maritime Phones , In-
flight phones & Pagers.
 Docomo registered drastic decline in sales between 1992-94 .

 In Oct-93 - stops taking rental security deposits on handsets.

 April 1994 - launches its own handsets & reduces initial subscription fees in
Dec 1996.

 Emerges as market leader in 1997.

 Differentiation strategy adopted …………..

 Launched Do Pa in March 1997.

 Beat the competition……………

 I-Mode launched in 22nd February 1999.

 Success Story Of DoCoMo: I-Mode
 I-mode became an instant success resulting a phenomenal growth in subscribers.

 Generated 30% higher revenues per subscriber .

 DoCoMo announced its global strategy to establish it self as global player.

 I-Mode popularity attained a new altitude.

 The subscriber base in Japan accounted for more than 60% ( 18.1 million ) of the 30 million mobile
internet customers in the world.

 External factors such as PC penetration was very low. (. In 1999, when i-Mode was launched, only
23% of Japanese had access to the Internet by computer)

 I-mode phones are constantly connected to a wide array of web-based services .

 Plans are in the works between NTT DoCoMo and Sony Computer Entertainment to allow i-mode
users to play PlayStation games with each other over the phone.

 I-mode’s innovation is not chiefly technological, it is also based on a sophisticated business model
 Business Model
 DoCoMo adapted AOl’s packet billing model.
 E-commerce traction on I-mode.
 never even mentioning the word “Internet” in marketing i-mode.
 It was a Win-Win-WIN situation for all .
 It chose not be just a gatekeeper between content companies and
customer.
 Multiple point contact with customers.
 External factors such as PC penetration was very low.

I-mode came at right time, in right place, with

right content.
 DoCoMo - BEYOND I-MODE

 Launch of “Freedom of mobile multimedia access (FOMA), a 3G

service .

 Riding on the success wave of I-MODE

 Hurdles in entering Global Arena

 BUT DoCoMo still going Global……….

 Problems A Plenty
 Losses written-off . Bottom Line affected.

 Postponement of Launch of FOMA

 Problems with Trial package provided to customers.

 But the Inevitable happened – 3 G Launched

 AFTER THE LAUNCH OF FOMA
 Customers complaints continued……

 FOMAs subscriber base amounted to only 89000 by the end of march 2002,much
below the expected 150000.

 Due to increase in competition the net subscriber base was 31.7 % lower in Dec-01
than in Dec-00.

 Docomo still dominated the market with 59% market share followed by KDDI &
Vodafone J-phone with 17.7%.

 Docomo offered various subsidies……….

 Biggest loss …………116.19 billion yen

 Cut off in the salaries of top executives by 10%-20% for a year.

 In April 2002,KDDI launched CDMA2002lx, its 3G service.

 Problems to convince its partner wireless companies ……….

 DoCoMo stake fell by 33.8%

 Offered discounts ……..and free roaming services.

 The performance of I-Mode launched in other countries was also

far from satisfactory .
 Back In Business
 In Jun 2002 DoCoMo launched its first photo handset based on 2G network.

 In Jan 2003 DoCoMo reduced its promotional expenditure on 3G network.

 By Feb 2003 aggressively marketed FOMA handsets.

 In march 2003 company launched new handset P2102V.

 In April 2003 announced launch of new handset F661i with GPS system.

 In April 2003 Company launched a ‘Wrist watch with phone’ .

 Announced plans to launch six new 2G camera phones.

 Signs of Revival
 DoCoMo’s 3G initiative showed signs of revival.

 Company covered 90% of Japan’s population by the end of April 2003.

 DoCoMo bounced back on profit on account of its successful new launches with
consolidated net profit of $1.83 billion for the year end.

 Subscriber based amounted to over 41million.

 Company’s share prices increased to $2000 in April’03 from $1700 in March’03

 DoCoMo was not free of all problems, Japan government passed new ‘Local Taxes
Amendment Law’

 Competition in Japanese mobile market was increasing. Competitors like KDDI & J-
Phone was capturing market share.
 Whether the strategy worked or
was it a flash in the pan ?
 Concorde

 Enron

 Worldcom

 Premier Automobiles

 Radio Corporation of America ( Fortune 500 List 1960 )

 Republic Steel ( Fortune 500 List 1960 )

 Uniroyal ( Fortune 500 List 1960 )

 BestFoods ( Fortune 500 List 1960 )

 Youngtown Steel & Tube ( Fortune 500 List 1960 )

 Tidewater Oil ( Fortune 500 List 1960 )

 Current Position……
 What happened to DoCoMo ( in terms of subscriber base ) after 2002 ?
 FOMA Subscriber base increased from 41011 as on 31/03/2002 to
54601 as on 31/03/2009.
 I-Mode subscription has increased from 32156 as on 31/03/2002 to
48474 as on 31/03/2009.

 Subscriber base

 Subscriber growth Foma.

 Subscriber growth I-Mode.

 What happened to DoCoMo
( in terms of revenue ) after 2002 ?

 Net Income increased from 4,01,755.00 Million Yen as on Mar 2001 to

4,71,873.00 Million Yen as on 31/03/2009

 Revenue Growth from 2001 to 2009

 Internationally where it has spread ?
 HTCL (Hong Kong) Dec. 1999, 24.1%

 (Taiwan) Feb. 2001, 4.7% KT Freetel (Rep. of Korea) Dec. 2005,

10.3% ownership

 PLDT (Philippines) Mar. 2006, 14.0% ownership

 DOCOMO PACIFIC (Guam & Mariana) Dec. 2006, 100%

 U-Mobile (Malaysia) Apr. 2008, 16.5% ownership

 TM International (Bangladesh) Sep. 2008, 30% ownership

 Tata Teleservices Limited (India) Mar. 2009, 26% ownership.

 Top 10 mobile operators in the
world as of 2007
 1. AT&T - the former SBC merged with AT&T creating the new AT&T (USA)
 2. China Mobile - formerly China state-owned, now still state-controlled, one of two mobile
phone
 monopolies in the entire China.
 3. Vodafone - Britain's largest telecom operator.
 4. Verizon Communications - US-based telecom company formed after a series of mergers.
 5. Telefonica - Multinational company with stakes in Dpain, Latin America and Europe. Owns
the O2
 brand.
 6. Deutsche Telekom - German telecom company, also owns t-mobile.
 7. America Movil - Mexican operator controlled by the world's richest man - Carlos Slim.
 8. NTT DoCoMo - One of Japan's telecom operators.
 9. France Telecom - One of France's telecom companies.
 10. Nippon Telegraph & Telephone - Japan's second largest telecom operator.
 BLUE OCEAN STRATEGY
 Make the competition irrelevant

 Create and capture new demand

 Reconstruct market boundaries

 Overcome key organizational hurdles

 Indian Telecom Industry
 1851 First operational land lines were laid by the government near Calcutta.

 1881 Telephone service introduced in India

 1883 Merger with the postal system

 1923 Formation of Indian Radio Telegraph Company (IRT)

 1932 Merger of ETC and IRT into the Indian Radio and Cable Communication Company (IRCC)

 1947 Nationalization of all foreign telecommunication companies to form the Posts, Telephone
and Telegraph (PTT), a monopoly run by the government's Ministry of Communications.

 1985 Department of Telecommunications (DOT) established, an exclusive provider

of domestic and long-distance service that would be its own regulator.

 1986 Conversion of DOT into two wholly government-owned companies: the VSNL for
international telecommunications and MTNL for service in metropolitan areas.

 1997 Telecom Regulatory Authority of India created.

 1999 Cellular Services are launched in India. New National Telecom Policy is adopted.

 2000 DoT becomes a corporation, BSNL

 Current wireless players
 State-owned operators: BSNL, which covers 20 circles, and MTNL,
which offers mobile services in the remaining two (Mumbai and New
Delhi), offer GSM services.

 The original private service providers with a national presence:

Bharti Airtel and Vodafone Essar .

 Those who took fourth-round licences or the opportunity provided by

UAS licenses to create a national presence: Reliance
Communications, Tata Teleservices, and, more recently, IDEA
Cellular, Sistema Shyam, and Aircel Ltd.

 Greenfield operators issued new licenses in January 2008: Datacom

Solutions, Loop Telecom, S Tel, Swan Telecom, and Unitech.
 Current subscriber base

 The total number of wireless connections in India stood at

376.12 million at the end of February 2009.

 State-owned BSNL and MTNL, however, were allocated their

3G spectrum during the second half of 2008

 3G auctions will not be held at all for the Rajasthan and North
East circles as there is no spectrum yet available in the required
bands.
 Sources
 ICMR case collection by A.Neela. Radhika.

 TELECOM CARRIER ASSOCIATION-Japan

 BLUE OCEAN STRATEGY BOOK by reneey & Chang

 www.NTT DOCOMO.com

 ITCU - International Telephone Confernces Unit.

 TRPC – Telecom Research Policy Conferences

 www. Cellular news.com