Another U.S. Foray for NTT DoCoMo?

In a move that hints at expansion, Japan's cellular leader is creating a U.S. advisory board led by former FCC head Michael Powell

by Olga Kharif

Three years after a blistering loss on its last big U.S. investment, NTT DoCoMo may be ready for another foray across the Pacific. On the heels of its October appointment of a new president of DoCoMo USA, Japan's largest wireless provider is making its mark on CTIA, the wireless industry trade show in Orlando, with a big booth and a flurry of fancy new gadgets.

But in the biggest sign of a revived U.S. emphasis, DoCoMo (DCM) said on Mar. 27 that it's forming a U.S. advisory board to be headed by Michael Powell, former head of the Federal Communications Commission. "They are coming back alive again," says David Farber, the former FCC chief technologist who runs the influential technology newsletter Interesting-People and was a DoCoMo USA advisory board member from 2000 to 2004. "They are coming out of their shell." The previous board disbanded in August.

The company is mum on its U.S. ambitions, but industry veterans and analysts say the Japanese carrier could choose from a range of options—from offering mobile wallet and credit-card services through local carriers to taking equity stakes in companies such as troubled Sprint Nextel (S). "I expect a fair amount of activity in the coming months," says Andrew Cole, president of consultancy CSMG Adventis. "They are looking at a lot more than what they've done until now."

Financial Services

DoCoMo was one of the pioneers of technologies that enable consumers to use cell phones to make payments and carry out other transactions and it could try to export that knowhow to the U.S. Japanese subscribers to DoCoMo's Osaifu-Keitai e-wallet service can use their handsets to buy soda at vending machines, purchase airplane tickets, and manage bank accounts. Another offering, called iD, offers a secure way of storing credit-card information on mobile phones. You pay by swiping the phones across scanners. The charges are then added to wireless bills.

For DoCoMo, which in 2005 bought a stake in a Japanese credit-card company, financial services are a growth driver. DoCoMo predicts that the number of its e-wallet customers will rise to 20 million in March from 18.3 million in January. It's not hard to see why players in the cutthroat U.S. market may want in on that kind of growth. "Can the carriers just coast on music and mobile TV?" says Andrei Jezierki, a founder of New York venture consultancy i2 Partners. "Absolutely not. Electronic payments will be huge." AT&T (T), owner of the largest U.S. mobile-phone company, says it will introduce a mobile payments service later this year. Other U.S. providers have yet to announce such services.

Perhaps DoCoMo could partner with Deutsche Telekom's (DT) T-Mobile USA, which has lagged behind larger rivals in rolling out cool new data services, says Farber. DoCoMo could also help a U.S. partner devise new handsets that enable such services as payments as well as music and mobile TV services, he says.

Additional Possibilities

Some observers speculate DoCoMo also could use its wealth of wireless services and content to enter the U.S. market through a partnership with an existing carrier, creating what's known in industry parlance as a mobile virtual network operator, or MVNO. That kind of arrangement would let it market cool services to younger users, for example. DoCoMo could also team up with a carrier such as Clearwire (CLWR) that's betting on WiMAX, the technology that provides fast Internet connections over large tracts of land.