DoCoMo: The Japanese Wireless Telecom Leader
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Case Code : BSTR049
Case Length : 17 Pages
Period : 1992 - 2003
Organization : NTT DoCoMo (DoCoMo) Inc
Pub Date : 2003
Teaching Note : Available
Countries : Japan
Industry : Telecommunication
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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DoCoMo - Problems Aplenty
In early 2001, though DoCoMo still remained the largest company in Japan by its market capitalization and the second largest mobile
phone company in the world (after Vodafone), it was facing problems on account of its aggressive overseas investment drive. With wireless stocks plummeting across the world during early 2001, DoCoMo was forced to write off $7.7 billion, due to the decline in the value of its investments in various foreign wireless companies. Meanwhile, DoCoMo was facing problems in launching FOMA. The launch, originally scheduled in May 2001 had to be postponed by 5 months. The company also announced that it would launch a 'mini trial' service of FOMA
in the introductory phase, by providing it to about 4,000 customers in Tokyo...
Life After the Loss
DoCoMo's decision to continue with its global strategy met with apprehension in the markets, though the
Government of Japan gave it support stating that DoCoMo was Japan's "flag bearer" in the global arena.
In the words of Hiroyuki Arai, Director, Parliament Telecom Policymaking Committee, "DoCoMo is our flag bearer. If the company takes its time getting into the global arena, we will lose our lead to American or other foreign companies. Without that kind of commitment from Japanese companies, our economy will never recover." However, the company's management had to face the wrath of its shareholders in July 2002...
Business as Usual?
In January 2003, DoCoMo decided to reduce its promotional expenditure on 3G services and focus on increasing profits. Commenting on this, CEO Keiji Tachikawa said, "Reckless spending on network expansion will not help promote (3G services); we'd better focus more on returns on investment." The company thus decided to focus on offering better phones with good battery life and to enhance the quality of its content through better content partnerships...
Exhibit I: DoCoMo - Financial Statements (2000-2002)
Exhibit II: About Wireless Telephony 'Generations'
Exhibit III: DoCoMo - Partner Network
Exhibit IV: Strengths of DoCoMo's Business Model
Exhibit V: DoCoMo - Stock Price Movements (2000-2003)
Exhibit VI: DoCoMo Subscriber Growth