corporate restucturing NTT Docomo spin off

1. Presented by:
Sajad Ahmad Dar (A-30)
Pankaj Dhiman (A-28)
Brijesh Kumar (A-29)
Chanchal Jha (A-26)

2. Introduction
 History of NTT DOCOMO is the history of mobile communication in
Japan itself.
 Telecom started in 1949 when Ministry of Communication in Japan
split into MTEL and Mop.
 MTEL was renamed as NTT & was a monopoly for telecommunication
in Japan.
 In the late 1980’s Japan finally decided to reform its telecom
regulatory framework to allow foreign companies into Japan.
 NTT’s mobile communication network was spun-off in 1992 to form
DoCoMo (initially named as NTT Mobile Communications Network.

3. Cont…
 The name Docomo was adopted in 2000.
 DOCOMO began its operations in July 1992.
 The initial fortfolio included Mobile Phones, car phone, etc.
 Docomo registered drastic decline in sales between 1992-94.
 April 1994– launches its own handsets and reduces initial
subscription fees in Dec. 1996.
 Growing demand for mobile telecom services in Japan during the mid
1990s.
 Emerges as market leader in 1997.

4. Cont…
Differentiation strategy adopted………
 Launched Do Pa in March 1997.
Beat the competition……..
 I-Mode launched in 22nd February
1999.
DoCoMo launched I-mode, a revolutionary product,
which changed the market dynamics overnight.

5. Success Story Of DOCOMO: I-Mode
 I-mode became an instant success resulting a phenomenal
growth in subscribers.
 Generated 30% higher revenues per subscribers.
 DoCoMo announced its global strategy to establish it self as
global player.
 I-Mode popularity attained a new altitude.
 The subscribes base in Japan accounted for more than 60%
(18.1 million ) of the 30 million mobile internet customers in
the world.
 I-mode phones are constantly connected to a wide array of
web -based services.

8. Business Model
 DoCoMo adapted AOL’S packet billing model.
 E-commerce traction on I-mode
 Never even mentioning the world “Internet’’ in marketing I-
mode.
 It was a Win-Win-Win situation for all.
 It chose not be just a gatekeeper between content companies
and customer.
 Multiple point contact with customers.
 External factors such as PC penetration was very low.
 I-mode came at right time, in right place, with right content.

9. DoCoMo- Beyond I-Mode
Launch of “Freedom of mobile multimedia access
(FOMA), a 3G service.
Riding on the success wave of I-Mode.
Hurdles in entering Global Arena.
But DoCoMo still going Global.

10. DoCoMo Problems Aplenty
Losses written-off. Bottom line affected.
Postponement of launch of FOMA.
Problems with trial package provided to customers.
But the inevitable happened- 3G launched.

11. After the launch of FOMA
 Customer complaints continued.
 FOMAs subscriber base amounted to only 89000 by the end
of march 2002, much below the expected 150000.
 Due to increase in competition the net subscriber base was
31,7% lower in Dec.2001 than in Dec.2002.
 Docomo still dominated the market with 59% market share
followed by KDDI and Vodafone J- phone with 17.7%.
 Docomo offered various subsidies.
 Biggest loss was 116.19 billion yen.

12. Life after the loss
 Cut off in the salaries of top executives by 10%-20% for a year.
 In April 2002, KDDI launched CDMA2002lx, its 3G service.
 Problems to convince its partner wireless companies.
 Docomo stake fell by 33.8%.
 Offered discounts and free roaming services.
 The performance of I-Mode launched in other countries was far
from satisfactory.

13. Back In Business
 In Jun2002 DoCoMo launched its first photo handset based on 2G
network.
 In Jan. 2003 DoCoMo reduced its promotional expenditure on 3G
network.
 By Feb. 2003 aggressively marketed FOMA handsets
 In March 2003 company launched new handset P2102V.
 In April 2003 announced launch of new handset F661i with GPS
system.
 In April 2003 company launched a ‘Wrist watch with phone.
 Announced plans to launch six new 2G camera phones.

14. Signs of Revival
 DoCoMo’s 3G initiative showed signs of revival.
 Company covered 90% of Japan’s population by the end of
April 2003.
 DoCoMo bounced back on profit on account of its
successful new launches with consolidated net profit of
$1.83 billion for the year end.
 Subscriber based amounted to cover 41 million.
 Company’s share prices increased to $2000 in April 2003
from $1700 in March 2003.

15. Current position
 What happened to DoCoMo (in terms of subscriber base )
after 2002
 FOMA subscriber base increased from 41011 as on 31
March 2002 to 54601 as on 31 March 2009.
 I-Mode subscription has increased from 32156 as on 31
March 2002 to 48474 as on 31 March 2009.