DoCoMo rebrands to face new threats

18 Jul 2008

With its market share slipping below 50% and an increasing feeling of vulnerability to number portability as it recently has trailed in overall sub additions, NTT DoCoMo has just initiated what most pundits must have believed impossible - a bold attempt to change itself from a slow-moving and aloof giant focusing on technological innovation into a nimble company ready to respond quickly to customer needs.

DoCoMo rebranded itself on July 1 with a new logo and a slogan suggesting a stronger customer commitment. On the same day DoCoMo merged all its former regional operating subsidiaries.

Probably the most important change has been to introduce and aggressively promote a 'Value Course' which separates the handset purchase price from monthly charges. In return for higher initial payments, customers can enjoy monthly bills free from charges relating to the handset.

But the expected icing on the cake - the deal to offer the iPhone - is missing and, possibly as a result, Masao Nakamura, the president who plotted and implemented these remarkable changes, will not be in control when the new DoCoMo discovers the wisdom of these moves. On June 20 he was replaced by Ryuji Yamada, another ex-NTT executive with one year of experience at DoCoMo. More than 30 other changes in the broad suggest the degree of parental concern.

At his first press conference Yamada talked about plans for change and challenge, improving customer services, and making overseas businesses account for 10% of revenue. He said that iPhone may prove attractive to young Japanese but hinted that the door to DoCoMo offering it was not closed.

So how well is DoCoMo positioned to weather competitive threats and the threat from BWA operators launching in 2009‾

'I think SoftBank is facing technical and financial problems with the iPhone as well as difficulty procuring the modified handsets, which may cloud its success,' said Michito Kimura, senior analyst at IDC Japan. 'I don't think the new BWA technologies are going to be a threat in Japan in the next three years.

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