Japan's DoCoMo Expanding Internationally
- By Stuart Grudgings
- Jun. 30 2000 00:00
TOKYO -- Having cleaned up in its own backyard, NTT DoCoMo, Japan's Internet-savvy mobile phone giant, is heading out to play with the big boys.
In recent months, the mobile scion of former state monopoly Nippon Telegraph and Telephone Corp. has quietly taken its first steps into overseas markets, buying up strategic stakes in companies in Europe and Asia.
News of the investments has been fairly drowned out by the noise of big acquisitions by players like Vodafone Airtouch, but analysts say DoCoMo's Internet know-how and sheer size could make it a force to be reckoned with, especially in Asia.
But DoCoMo, with the biggest market capitalization of any Japanese company, is already being criticized for punching below its weight overseas.
In its two main deals so far, it paid $410 million for a 19 percent stake in Hong Kong cellular provider Hutchison Telephone Co. and then $4.7 billion for 15 percent of Dutch mobile operator KPN Telecom.
"They have enormous clout," said Neil Juggins, an analyst at Prudential Bache Securities in Singapore.
The phenomenal success of its "i-mode" service in Japan f it has built up nearly 8 million users since its launch last year f has surprised even DoCoMo executives, and gives the company a valuable head start overseas.
"DoCoMo has a very high potential in terms of i-mode and 3G technology, but at the moment we can't really say if they're going to be successful [overseas]," said Yasumasa Goda, telecoms analyst at Merrill Lynch.
While it may have trouble making a big splash in Europe, its Asian strategy is moving ahead fast. In addition to Hutchison, it recently formed links with South Korea's biggest mobile operator SK Telecom and this week announced plans to boost its operations in China.