In an intervew with Nikkei BP, NTT DoCoMo’s new president Masao Nakamura has said he has three major goals; increase 3G FOMA subscribers, dig out new revenue sources such as mobile e-commerce and enhance customer satisfaction. After posting its highest ever operating profit of 1, 103 billion yen in the year to March 2004, it certainly looks as if Nakamura has his work cut out for him, especially as — on the surface of it at least — KDDI au seems to have consistently knocked the socks off DoCoMo in terms of gleaning 3G subs.
If you look at the strategic picture, it would appear that it’s all downhill now for Japan’s three wireless carriers, the argument being that penetration is topping out and there are only so many bells and whistles that DoCoMo can add to its services to induce customers to pay anything more than fixed fees for commoditized services.
But for once, WWJ is coming to the conclusion that DoCoMo is already ahead of the curve. It may be that following the terrible debacle of soon-to-be ex president Keiji Tachikawa’s foreign investment strategy (with the concomitant question, how much exactly did DoCoMo pay so that 2 million non-Japanese subscribers now have i-mode?), the company had to pull something pretty radical out of its top hat.
Insult and Injury.
Because on top of all the money flushed down the lavoratory over the past few years, KDDI au would seemed to have been thumbing its nose at DoCoMo. Big D, afterall, has paid over a billion dollars to glean 3 million 3G subscribers compared to to KDDI’s cheapo Qualcomm upgrade route yielding nearly 14 million subcibers. Mentioning that all important number 3 again, KDDI has also consistently beaten DoCoMo to the punch with new and popular services, including EZ Nabi and chaku-uta. This week, as WWJers will know, KDDI and Casio have just announced the world’s first commercial 3 megapixel-equipped camera phone.Of course the caveat to KDDI’s success is that au customers have no choice but to by the CDMA version of 3G because that’s all that’s available, so, of course, its pretty natural that over 80% of its customers have now upgraded.
But talking strategically, however, Tachikawa’s era may well be remembered as the reign that took DoCoMo from being a wireless carrier to the world’s first mobile e-business platform provider. Of course, we have made it clear that we are big fans of FeliCa; and while we know the first handsets are not– quite– on the market yet, it is clear from Tachikawa’s last major presentation on the subject that a revolution is at– or should we say in? hand.
FeliCa, Non-Touchy Feely Success?
WWJ founder Dan Scuka has already written an interesting and slightly contrarian article this week showing that its very possible that declining ARPU might be a ghost that is, somewhat paradoxically, laid to rest by DoCoMo’s flat rate strategy for FOMA.
If we accept this point that DoCoMo is successfully building ditches, moats and other defenses that will stop the company sliding into a ditch with how much it can charge customers, the next big question is how can it differentiate itself in terms of services, and of course the answer is FeliCa.
In his March 24 “New Directions in Mobile Communications Services” presentation Tachikawa has laid out a “bricks and mortar” service platform that really does begin to hint that convergence is possible between existing paper and cash based transactions and mobile IT technologies.
For a look at Nikkei’s view on Nakamura’s challenges, take a look at the following
WWJ anxiously awaits the arrival of Bluetooth as well as FeliCa enabled handsets in the second half of this year– yikes, that only 5 weeks away!– and a look at the 901i handsets coming out in a few month’s time.
As well as setting goals, Nakamura could be sitting on a couple of golden eggs as well.
– Paul Kallender