DoCoMo's Paradigm: Flat Rate Forces Shift
Last Friday’s NTT DoCoMo press briefing was an eye-opener as President Keichi Tachikawa hinted at the tectonic changes reshaping Japan’s mobile data market. After reviewing the company’s stance on US W-CDMA launch after the AT&T Wireless sale, he offered some insight into the giant carrier’s plans for dealing with the the flat-rate data pricing “paradigm shift” instituted, he alleged, “too early” by an unnamed player (which would be arch rival KDDI). Finishing after just 10 minutes, Tachikawa’s comments were brief, but the ensuing half hour of Q&A with the press offered a golden opportunity to quiz the prez on these and other issues—including e-commerce, 3G subscriber numbers, and FOMA handsets. If you want to know what Japan’s #1 mobile operator is thinking, don’t miss this program.
After the AT&T Wireless purchase issue, the major thing that struck us on Friday was that DoCoMo has apparently conceded on the flat-rate data tariff challenge. Until now, most analysts believed DoCoMo wanted to avoid flat-rate data at all costs—so as to milk as much revenue from FOMA as the market would bear. After listening to the briefing, we’re holding to the prediction that flat rates are going to come to Big D around mid-summer, despite President Tachikawa’s comments that “conditions [are] not ready yet.” On the contrary, Tachikawa-san, the time is ripe! And there’s little else you can do now that KDDI has cried “Flat Rate!” and let slip the dogs of all-you-can-eat-for-one-price competition.
Tachikawa also referred to the carrier’s FeliCa e-wallet deployment as a move to m-commerce with DoCoMo becoming the link between retailers and customers; we will, doubtless, hear a lot more from DoCoMo about this emerging business platform.
For 3G and FOMA, reaching the earlier-announced 2.4 million target by March 31 seems to be a given according to Tachikawa-san and leads naturally enough to the Next Big Question: Can DoCoMo reach the 10 million mark by the end of fiscal ’04 (March 2005)? This, as we’ve mentioned before, is a key benchmark—and is the level that KDDI was at with their 3G system back in September 2003.
Finally, based on his i-mode comments, we getting the growing feeling that DoCoMo’s i-mode push is reaching a dead end. It’s been 4 years since DoCoMo first started trying to seed the technology abroad and since then, Vodafone has been doing nicely with their rival service, thank you very much, and Hutchinson 3’s decision not to roll out i-mode in the UK seems to have been a serious blow. Four years ago, i-mode was revolutionary and special. It seems that operators abroad are now sophisticated enough not to need to license technology or advice from DoCoMo.
Despite speculation that DoCoMo might invest in or purchase mmO2, in light of DoCoMo’s recent huge write-offs, wouldn’t it seem reasonable for the company just to conclude a technical alliance? Then again, given mm02’s weaknesses, it may be that the British company is hunting as much for a chunk of cash as they are for i-mode expertise.
— The Editors