Tuesday, February 26, 2013

NTT Docomo looks to the future

Steven Hartley, telco strategy analyst, Ovum

SPAIN: NTT Docomo CEO Kaoru Kato has used MWC 2013 to provide an insight into the Japanese mobile operator’s strategy. The most interesting aspect is a more realistic approach to the future in Japan and a more aggressive approach abroad.

Kato used yesterday’s keynote address to promote Docomo’s vision of a “Smart Life” in its domestic market. Targeting eight verticals – including media, M2M, and health – the operator’s purpose is to open the network to application developers. The target for NTT Docomo is to derive new service revenues of $11bn by 2015.

Docomo’s strategy is similar to Verizon Wireless’s decision to open its network back in 2007. Like that announcement, there will no doubt be speculation as to exactly how open Docomo’s network will actually be.

However, it is a required step that Ovum has long advocated. Even operators that area as powerful as NTT Docomo is in its domestic market have to face the reality that enabling application development on their networks broadens the application base. This in turn makes operators more attractive to end users, be they enterprises or consumers.

The second part of the announcement signals a reawakening of Docomo’s global ambitions. In response to Softbank’s move to acquire Sprint in the US, Kato stated that Docomo is interested in buying mobile operators following a flurry of content-focused acquisitions in recent years. No further details were provided as to the funds available or the regions preferred, but Kato did hint that Docomo’s previous strategy of taking minority stakes may be revised.

Ultimately, Softbank’s disruptive strategy has rattled Docomo at home and abroad, forcing the operator to respond. It has scale and expertise that could lead to busy times ahead for deal advisers.

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