Case Studies and Management Resources
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Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
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In January 2001, DoCoMo completed the acquisition of a 16% stake in AT&T, the leading wireless company in the US, for $9.8 billion. This was till then, the biggest investment the company had made overseas. DoCoMo expected the deal to help it establish itself in the world's richest potential market (US). As the penetration of wireless services in the US (39%) was lesser as compared to Japan (above 50%) and European countries (70%), DoCoMo expected to leverage the available potential through I-Mode and its 3G technologies. In line with these plans, the company began taking initiatives to make I-Mode compatible with the wireless standards used in US. In spite of these efforts, the company soon landed in a host of problems.
DoCoMo - Problems AplentyIn 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. |
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. FOMA allowed its users to exchange moving images and CD-quality sound files over the Internet. Commenting on the decision to postpone the launch, Yuichiro Kuwahata (Kuwahata), the company's spokesman said “Our base stations and networks are ready for commercial launch.
However, we did not have enough time to complete further testing to ensure 100% network quality for our customers.” He further explained “When we only had a small number of customers for our I-Mode service, we did not have any technical problems. But when the number of users skyrocketed and exceeded our expectation, we had to deal with a lot of technical problems. We do not want that to happen with our 3G services.”
DoCoMo - The Japanese Wireless Telecom Leader - Next Page >>>
Case Code : BSTR049
Themes: Differentiation
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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