What's Different For DoCoMo?

Japan’s NTT DoCoMo wrote off $13 billion in failed investments in foreign carriers around the turn of the century, in the process swearing off its high-spending ways. All that’s changed of late, with the company again looking outside Japan for investment targets. A $13 billion writeoff would scare most companies straight, but DoCoMo swearing it’s doing things differently this time. BusinessWeek characterizes the latest moves as “looking at partnerships with more of an eye toward strategy” — making us wonder if that means they had no strategy with their earlier investments. What’s different this time around? The company’s limiting most of its investments to $90 million or less, and is shopping in Asia in an attempt to get in before the likes of Vodafone, an exec says. A couple points: that limit must not apply to its $560 million investment in KT Freetel, nor its $300 million investment in PLDT in the Philippines. Also, Vodafone’s already in Asia — along with its floundering Japanese unit, it owns a stake in and has a partnership with China Mobile and has invested in the fast-growing Indian market. Interestingly, the DoCoMo exec says the strategy of licensing i-mode — which has been successful — isn’t about generating revenues so much as generating economies of scale for i-mode enabled handsets. That’s another curious comment, give that DoCoMo isn’t likely to benefit from that scale, since it sells vastly different handsets than its overseas licensees. It sounds like the company’s starting to struggle as its home market matures and subscriber growth slows, and it’s scrambling to find a strategy — and justify it.

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