DoCoMo willing to open network to rivals

NTT DoCoMo, Japan’s largest mobile operator, is prepared to open up part of its network to rival companies to help them kick-start services that will increase competition in the already saturated domestic market.

“We have already started talking” with new entrants about the possibility of allowing them to use part of DoCoMo’s network, Masao Nakamura, the company’s president, told the Financial Times on Wednesday. Mr Nakamura indicated that DoCoMo would prefer not to allow this kind of network “roaming” by competitors.

“[But] frankly speaking, if we don’t open up our network we will be called egotistic . . . and told that we should help them,” he said. “The fact that [the government] is allowing new entrants means they are creating new competition so to do something that will lead to their death from the start will not be forgiven.”

He said such an arrangement would have to be temporary and would depend on DoCoMo securing reasonable fees for use of its network.

He also ruled out the possibility of allowing new entrants to use DoCoMo’s network in major cities, and said roaming services would have to be restricted to outlying areas of the country where it will be difficult for new entrants to put base stations in place immediately.

Nevertheless, DoCoMo’s willingness to open up its network to rivals highlights the pressures on the operator to allow further competition in the market in spite of its own falling revenues. The government does not require existing operators to provide access to their networks to new entrants.

In the nine months to December, net profits fell 32 per cent to Y516bn ($4.36bn), and DoCoMo is forecasting a 19 per cent drop in earnings for the full year to Y604bn on flat revenues of Y4,784bn.

The entry next year of three new operators into a saturated market and the start later this year of number portability will increase competition.

“We don’t welcome it, at all,” Mr Nakamura said. But “we understand that it is impossible to build a network throughout Japan unless you spend a certain number of years on it and that is what the public thinks too”.