| BUSINESSWEEK ONLINE : JULY 12, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- INT'L COVER STORY
The Company That Got Japan to Log On (int'l edition) It wasn't long ago that your typical Tokyo morning commuter buried himself in a newspaper or a comic book. But that breed is starting to disappear with the advent this year of Internet cellular phones. In crowded trains and buses, students and business executives alike are pulling out sleek, digital handsets to check and send brief E-mail, read their horoscopes, or do their banking. While Japan still lags behind Europe and North America in Internet use, it's catching up quickly, thanks to the growing popularity of cellular telephony--especially cell phones wired for the Net. And who gets credit for triggering Japan's Internet revolution? NTT Mobile Communications Network, Japan's biggest and fastest-growing provider of wireless service, as well as the leader in equipment technology. The company's success has landed it a prime spot on the Global 1000. Better known as NTT DoCoMo, this spin-off of telecommunications giant Nippon Telegraph & Telephone Corp. has seen fabulous growth since 1994, following deregulation of the country's mobile-phone market. If Japanese regulators need proof of the merits of liberalization, they only have to look to DoCoMo, which transformed itself from a cloistered subsidiary into a dynamo to survive the competition. DoCoMo's debut on the Tokyo Stock Exchange in October raised $18 billion, one of the largest initial public offerings in Japanese history. It has justified investors' enthusiasm. At the close of the 1998 business year in March, operating profit of $21.7 billion jumped 15% from the year before on revenue of $26 billion, up nearly 20%. Investors are confident that DoCoMo's value will continue to rise with the growth of wireless devices in Japan. Market penetration for all types of mobile phones approaches 38% of all households, and in the years ahead, it is expected to surge to 60% or more. Out of Japan's 43 million cellular users, DoCoMo's share is an overwhelming 57%. ''DoCoMo will remain the market leader because of its dominance and its technological strengths,'' says Kate Lye, a telecom analyst with Warburg Dillon Read in Tokyo. Although NTT still owns 95% of DoCoMo, the company is moving much faster than its parent to forge alliances. In mid-June, DoCoMo and 3Com Corp. of the U.S. agreed to develop a personal digital assistant for the Japanese market. The carrier owes much of its success to its talented engineers and business planners, who set the country's standards for handsets and equipment. Aware of Japan's hunger for extra-light handsets, they developed the technology for the world's first palm-sized digital phone. It weighs a mere 100 grams--3.5 ounces. Today the company is developing third-generation wireless technology, with easy Internet connections and lightning-fast data transmission. Even before the so-called 3G services begin in Japan in 2001, DoCoMo is pioneering Net phones. In late February, it introduced its new i-mode handsets and service, which add about $17 to the average monthly cellular phone bill of about $75. A stiff price, but subscribers are buying the add-on service at a pace of 10,000 a day, with the number of users expected to reach 4 million by next March. ''Internet use via the computer never took off in Japan,'' points out Keiichi Enoki, who heads DoCoMo's Internet business division. ''But many Japanese own cell phones, so it's the perfect information tool.'' Thus DoCoMo users can directly reach more than 100 Web sites through the carrier's portal, where they can find everything from restaurant and travel guides to games and news headlines. ''Who says that Japanese aren't interested in the Net?'' asks Enoki. All they needed was DoCoMo to show them the way. By Irene M. Kunii in Tokyo _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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