Another U.S. Foray for NTT DoCoMo?

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Finally, there's the possibility, however remote, that DoCoMo could make a major acquisition. Powell is chairman of investment consultancy MK Powell Group. He's also a senior adviser of Providence Equity Capital, the private equity fund that worked on the buyout of satellite operator PanAmSat and in the past has teamed with the Carlyle Group—itself a potential buyer of Sprint Nextel (see BusinessWeek.com, 3/23/07, "Why $80 Billion for Sprint May Make Sense").

Previous Attempts

DoCoMo has had its fingers burnt before in the U.S. "I doubt they are going to dive into acquisitions," Farber says. In 2001, DoCoMo acquired a $9.8 billion minority stake in AT&T Wireless with the idea of helping the American cellular company launch new data services already popular in Japan (see BusinessWeek.com, 1/12/01, "Next on DoCoMo's Calling Card: The U.S."). The services never got off the ground, and when Cingular acquired AT&T Wireless in 2004, DoCoMo sold back its equity stake at a loss of $3.3 billion.

Since then, DoCoMo has limited its U.S. activities to minor investments in open-source cell-phone software maker MontaVista Software and Telargo, which provides U.S. fleet management services. Its two offices in Manhattan and Washington, D.C., have also focused on serving Japanese speakers shuttling between U.S. and Japan. DoCoMo offers BlackBerry (RIMM) messaging in Japanese and Wi-Fi access cards for airports worldwide.

Whatever DoCoMo's U.S. plans, the grass may be greener anywhere but Japan, where the market is becoming increasingly competitive. Rivalries with KDDI and SoftBank have intensified especially since last fall, when Japanese consumers were allowed to keep their mobile numbers when switching carriers. DoCoMo's Japanese rivals are cutting prices and going abroad for content (see BusinessWeek.com, 11/1/06, "Amp'd to Tap Japan's Mobile Market"). DoCoMo's net income for the first nine months ended December, 2006, was down 22% year over year. Its revenues are flat. "When you have competition at home, you start looking outward," says Farber. "And having a pipeline into the U.S. is always useful."

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.