Try the new FT.com

June 18, 2007 3:14 am

Vietnam attracts DoCoMo

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

NTT DoCoMo,Japan’s leading mobile phone company, is set to make a “sizeable” investment in the booming markets of Vietnam, China or India, reversing a long-held decision to stay away from overseas markets after losing $9bn in botched investments six years ago.

Masao Nakamura, president of DoCoMo, said the company’s strategy was to expand abroad as a way of countering the saturated Japanese mobile phone market.

“Vietnam, India and China are rapidly growing markets and, if we are going to make an investment, it will be sizeable,” said Mr Nakamura in an interview with the Financial Times. “Our focus is Asia. Overseas revenues will drive our growth in the future.”

DoCoMo took big stakes in AT&T Wireless, KPN Mobile and Hutchison 3G UK Holdings at the height of the technology bubble, but the subsequent collapse forced the Japanese mobile operator to sell its stakes for a Y1,100bn loss in 2001.

Though DoCoMo enjoys a 54 per cent market share in Japan, growth has been sluggish due to new competitors entering the already saturated market.

“Vietnam is the hottest market in the future but [the government] would only allow a minority stakeholding,” said Mr Nakamura. “I think it would be unrealistic to acquire over 50 per cent in an Asian operator from day one. Even if we started with a small stakeholding, it doesn’t mean we would rule out increasing our stake – we want to take a long-term approach in Asia.”

Mr Nakamura said entering the lucrative Chinese market independently would be challenging for DoCoMo as the government is not yet awarding 3G licences to foreign makers.

“If we suppose that 3G licences are awarded to Chinese carriers, it would make sense to take a small stake in a Chinese mobile company,” said Mr Nakamura. “There will be a lot of demand for financial assistance to help with the cost of obtaining a 3G licence.”

DoCoMo is also equipping more of its mobile phones with the GSM standard, which enables Japanese customers to use their mobile overseas.

Revenues from roaming fees jumped 36 per cent to Y34bn ($275m) at the end of March.

Mr Nakamura forecast revenues from roaming would increase to Y50bn in the current year with a goal of doubling this figure within a few years. “Roaming fees are one of our pillars of growth,” he said.

Japanese consumers use their mobile phones to play video games, shop online, listen to music and watch television. Mr Nakamura said in the future that it would “make sense to acquire” a next-generation content company, such as one that produces video content for mobile phones.

Related Topics

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments
SHARE THIS QUOTE