NTT DoCoMo’s overseas expansion plans suffered a setback on Wednesday after it emerged that two foreign mobile carriers were poised to end their internet service contracts with Japan’s biggest mobile carrier.
The company confirmed that Australia’s Telstra had decided to end its agreement with DoCoMo to use the Japanese carrier’s sophisticated “i-mode” internet service package.
Also, DoCoMo said O2, the UK mobile operator, had said it intended to end its i-mode contract, although it had not formally given notice.
The news is a blow for DoCoMo after Masao Nakamura, its president, recently outlined plans to expand abroad to make up for slowing growth in the phone company’s mature domestic market.
Meanwhile, Yoshihide Suga, Japan’s telecommunications minister, hascomplained that Japan’s telecoms companies do not punch their weight in overseas markets in spite of sophisticated technology.
Makio Inui, telecoms analyst at UBS, said: “With these rejections it’s quite clear overseas expansions and aspirations are not well rewarded in this service-based sector.”
Japan’s success in exporting manufactured goods was the source of its postwar economic boom but it has enjoyed less achievement in exporting services.
This worries some in the government, since the manufacturing operations of rich countries across the world are gradually being shifted to low-cost countries.
The same desire to boost Japan’s presence in international services has spurred the government’s recent rather derided campaign to boost Tokyo’s competitiveness as an international financial centre.
Telstra said it would end the service in December, since many of the same features as i-mode were now available on its BigPond mobile service.
Analysts said i-mode had not taken off abroad, largely because consumers in many countries were not interested in its versatile range of services.
Japanese consumers spend more time accessing the internet through their phones than do their foreign counterparts.
I-mode has only about 7m overseas users in 17 countries, compared with about 48m in Japan.
DoCoMo’s operating income fell 7 per cent to Y773.5bn ($6.35bn) in the year to March, hit by tough domestic competition.